Notes from the CEO – January 2021
Chief Executive Officer
Phew! I don’t know about you, but I am more pleased than usual to be able to wish members and friends of BritishAmerican Business a happy new year, largely of course because 2021 won’t be 2020! Early January always feels like a new start but this year, that sense of a fresh chapter is stronger than usual; a new administration will arrive in Washington and the 5-year arm wrestle over Brexit has been settled (sort of), and despite the ongoing horrors of the health crisis there is just the beginning of a sense of optimism in the air…it may still be over the horizon, but it is coming.
Starting with the last, the first task in the US and UK is to focus on the health issues. The extraordinary efforts of researchers and private enterprise have produced multiple vaccines which give us a chance of getting the disease under control. Getting the necessary level of coverage is a task of mind-boggling proportions but it is what needs to be done. From what feels like the direst of situations that we are in now, the chance for a return to something like normality by the summer is a real possibility.
Once ordinary people feel comfortable in proximity to others many parts of the economy which have been hit so hard will bounce back…there is talk of a new ‘roaring twenties’ economic expansion…frankly, I’d be happy with modest and steady growth!
Predictably, the UK-EU negotiations took all the available time and the drama continued to the end. That this Trade and Co-operation Agreement (TCA) was reached is a victory for pragmatic sense on both sides and the business community is undoubtedly relieved. The widespread commentary on the agreement has acknowledged its successes: tariff and quota free trade in goods; multiple mutual commitments to review and co-operation; satisfying the UK’s political need to demonstrate sovereignty; preserving the EU single market; and its less positive consequences: nothing on services; an increase in customs paperwork for traders; the theoretical ease of cancellation. Overall, we see this as a pretty good outcome given the intense political pressure but it should be seen as only the start of a much deeper set of agreements. We will get a sense of the EU mindset over the next few months as it completes its adequacy assessments of the UK’s data and financial regulatory framework…anything less than a positive finding would be a mistake and a setback.
When it comes to the future trade relationship between the UK and the USA, our analysis of the TCA suggests there is nothing in this agreement that makes a UK-US FTA more problematic. As followers of this process will know, there are already plenty of reasons why the chances of such an agreement are finely balanced. A huge amount of progress was made by the UK and US negotiating teams last year, but some challenging issues remain un-resolved; a new US Trade Representative will need to be approved and assess her priorities and the Biden team will need to decide how much they want to push this before the Trade Promotion Authority they are given by Congress expires. There has been some commentary about the new Biden team deliberately focusing on a new EU agreement as retribution for the perceived closeness between Johnson and Trump although it is hard to see what that this is based on. We would love to see a liberalized trade agreement between the US and the EU but anyone who thinks that would be easier than a deal with the UK hasn’t been paying attention!
BAB will be doing everything that we can to push for a UK -US FTA but if that isn’t possible for whatever reason, we will support the many things that can be done to reduce friction by regulators, professional bodies and other agencies.
Elsewhere, you will continue to see us active in policy areas that effect our members; we will be a champion for trade across the UK-US corridor and remind both governments of the huge mutual benefit that this brings. We will use our convening power to put members in touch with each other through a packed program of events and, as soon as we can, a good proportion of these will be in person. Our programming will reflect the issues that Boards, CEOs and business owners are grappling with at a time of real change and our line up for the first quarter already looks great.
Finally, a huge thank you to everyone who supported BAB during 2020; we are here because trade and investment between the US and UK matters…economically, politically, culturally…it is one of the most significant aspects of this most important partnership between nations and we are here to protect it.