US, UK initiate trade talks and promise quick work as the virus ravages the global economy

The United States and Britain entered formal free trade agreement negotiations on Tuesday, and pledge to work swiftly to close a deal that could address the massive obstruction of the coronavirus pandemic to the trade flows and economies of the two allies.

The talks, which will be conducted virtually, will involve more than 300 US and UK employees and officials in nearly 30 negotiating groups, said US trade representative Robert Lighthizer and British Secretary of Commerce, Liz Truss, in a joint statement.

“We will conduct negotiations at an accelerated pace and have committed the resources needed to make rapid progress,” they said. “A free trade agreement would contribute to the long-term health of our economies, which is crucial if we are to recover from the challenges of Covid-19, the disease caused by the new coronavirus.

The first round of conversations began when new US data showed a record decline in US exports and a contraction in the massive US services sector for the first time in over a decade.

It is Washington’s first major new trade negotiation in 2020. London has also worked out trade terms with the European Union after leaving the block in January.

London’s goal was to quickly complete both negotiations and there could be a positive dynamic between the two, even though they are led by several leading negotiators, a British official told journalists in a background briefing.

British Ambassador Karen Pierce told reporters that it was “a very good sign of confidence in the economic recovery” that the two countries continue talks.

Over the past year, Lighthizer, who listed trade talks in the UK as one of its top priorities for 2020, published targets seeking full access for US agricultural products and reduced rates for US-produced goods.

Influenced by shortages of medical equipment and medicines during the pandemic, both countries are trying to move some supply chains away from China.

Lighthizer said in later comments that the pandemic “has shown that simply relying on cheap imports of strategic products can make us vulnerable in times of crisis” and that the United States needs a healthy production base and thriving farmers.

But they are at odds with rates, including steel and aluminum taxes imposed by Washington in 2018.

When asked about President Donald Trump’s threat to impose more tariffs on China to deal with the outbreak, Pierce said: “Overall, tariffs are not particularly conducive to free trade, and we British strongly believe in free trade. It is in our history is in our DNA. The dispute between the US and China is up to them to resolve. “

Britain is also urging the United States and the EU to resolve an aircraft subsidy dispute that has led to tit-for-tat tariffs, including on Scotch whiskey.

Republican US Senator Chuck Grassley of Iowa, another major critic of tariffs, told reporters he hopes that a strong trade deal with agriculture will lay the foundations for a better deal with the EU.

Agriculture is expected to be one of the toughest issues in the talks, given strong UK opposition to GM crops and antibacterial treatments for poultry. Prime Minister Boris Johnson has vowed to make a “hard deal” and Truss has said Britain would not lower its food safety standards.

Britain will also not change its approach to drug prices or the UK National Health Service, the British official said.

Trade in goods between the United States and the United Kingdom was estimated at $ 127.1 billion in 2018, with the two sides being roughly balanced while trade in services was at $ 134.8 billion. Britain is the seventh largest trading partner of the US after South Korea, according to South Korea, according to the US Census Bureau.

Ted Bromund, a senior research fellow at the Heritage Foundation, a conservative think tank in Washington, said that an area ripe for tariff reduction is auto trade, Britain’s largest export sector to the United States. The rates for American passenger cars are 2.5%, the rates for pick-ups 25%, while Great Britain has a car rate of 10%.

Tuesday’s plenary opening will be followed by virtual meetings from May 6-15. The British official said it was unusual to negotiate in all areas at once, but the two sides wanted to make rapid progress.

Further rounds take place approximately every six weeks and are conducted remotely until it is safe to travel, the British Embassy said. There was no specific deadline for the completion of the talks, the official said.

Grassley said he thought the videoconference conversations would be more difficult.

“I don’t think it’s as good as sitting across the table from them,” he said.

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