'Ambitious' UK-US trade talks get underway

With critics arguing that any trade deal with the US would involve a loosening of regulations, the UK government vows to protect the NHS, and consumer and environmental health standards. How do business groups feel about the potential of a US/UK trade deal?

David Sapsted

5 May 2020

The UK and US formally triggered negotiations over a post-Brexit trade deal on Tuesday when Trade Secretary Liz Truss held videolink discussions with US Trade Representative Robert Lighthizer.The initial conversation will be followed by about two weeks of negotiations involving around 100 negotiators on each side, with further rounds of talk scheduled to take place every six weeks. Only when coronavirus travel restrictions are lifted will face-to-face talks take place.

UK government vows to protect NHS, and consumer and environmental health standards in the event of a US/UK trade deal

Prime Minister Boris Johnson has consistently argued that a free trade deal with US would be one of the major benefits of Brexit, although critics have argued such a deal would mean the UK having to loosen its standards in a host of areas, including on food hygiene and animal welfare.But in a 180-page UK mandate for the talks, published earlier this year, the government vowed to maintain consumer and environmental health standards and protect the National Health Service, with a promise that drug pricing and the provision of health services would not be “on the table”.Ms Truss said, "The US is our largest trading partner and increasing transatlantic trade can help our economies bounce back from the economic challenge posed by coronavirus."We want to strike an ambitious deal that opens up new opportunities for our businesses, brings in more investment and creates better jobs for people across the whole of the country."The prime minister has been clear that we champion free trade and this deal will make it even easier to do business with our friends across the pond."As we sit down at the negotiating table today be assured that we will we will drive a hard bargain to secure a deal that benefits individuals and businesses in every region and nation of the UK."

UK opposition parties: UK should focus on trade agreement with the EU

However, opposition political parties in the UK retain serious concerns over how much the country will have to give up to reach a deal with Washington and say Britain should be concentrating on reaching a trade agreement with the EU, which, as a whole, is by far the nation's biggest trading partner.

UK business groups are broadly supportive of a US/UK trade deal

But businesses in the UK are keen to see a transatlantic agreement. Josh Hardie, deputy director-general of the Confederation of British Industry (CBI), said the talks with the US offered a “sign of hope” to firms hard-hit by the pandemic.“While the attention of most businesses right now is to get through the Covid-19 crisis, it’s vital that we keep one eye to the future and how we can plan for an economic recovery,” he said.“The US and UK already share the world’s largest bilateral investment relationship and an ambitious deal should offer opportunities for all regions and nations of the UK.”Mike Cherry, chairman of the Federation of Small Businesses, said the US represented the “number one single market of choice” for smaller importers and exporters.“Exporting will be crucial for many small businesses to support their recovery from the pandemic and that is why it’s crucial to see a reduction in tariff and non-tariff barriers,” he said.“With our economy likely to be suppressed for some time, we are going to need small businesses that trade to lead the way. The prospects of a trade-led recovery would be lifted by progress in trade negotiations with the EU as our nearest trading bloc, the US as the largest global economy, as well as other nations already bouncing back after Covid-19 such as China.“Our own findings suggest that the US is the most important individual country market for small firms hoping to export over the next three years, with 46% selecting the country.”Meanwhile, trade talks between the UK and EU are continuing, although there have been increasing demands that the government extend the December 31 deadline for the transition period to enable more time for a deal to be reached in these pandemic-affected times. So far, however, the government has expressed no willingness to do so.