Why BAB is Supporting the Trade Negotiations
CEO Update – July 2020
Chief Executive Officer
If you believe, like we do here at BAB, that reducing financial and technical barriers to trade and investment is a fundamental driver of growth (and the historic evidence for this is overwhelming) then you will be rooting for a successful outcome for the negotiations going on now between the U.S. and the UK. There is a short, three question survey here which we would love you to complete.
Two rounds of negotiations, all conducted virtually, have been completed so far, building on the preparatory work that was done by the Trade and Investment Working Group while the UK remained under the constraints of its EU membership, and a third round is likely to be scheduled towards the end of July. Reports that we have had directly from the principals in the negotiation suggest that there has been good progress across a range of issues and as our analysis back in March predicted, there is a lot of common ground. Inevitably though, there are going to be areas where agreement is going to be difficult and a handful where the outcome is likely to be binary with limited shades of grey.
To get a good sense of the U.S. approach you should read this thoughtful essay in Foreign Affairs by Ambassador Robert E. Lighthizer who leads the United States Trade Representative (USTR), which negotiates trade issues on behalf of the U.S. Administration. His ‘middle ground’ approach between completely unfettered free trade and the highly protectionist practices of the past won’t satisfy purists on either side of the argument but does make it clear where the administration stands. It is also a good reminder that the U.S. throughout history has been wary of supra-national organizations, especially when they are seen to encroach on judicial sovereignty. Much of the argument in the piece focuses on the impact of trade agreements on domestic workforces whose jobs are outsourced to lower wage economies. This is an issue that the UK is as familiar with as the U.S. and should not be a point of conflict between the two (other than in the context of rules of origin).
It is hard to judge whether an agreement will be reached; setting aside those hard, binary questions around market access for agrifood, regulatory standards and data protection, there is a U.S. election coming and a possible change in administration. As Amb. Lighthizer made clear a week or so ago, the chances of getting an agreement in place before then are remote.
At BAB we will continue to support the negotiations in any way that we can. Over the last month we have held a series of five round table discussions with UK Minister for Trade Policy, Greg Hands, focused on different regions of the U.S. in partnership with the local chapters of the BritishAmerican Business Network. We have also had regular detailed read-out sessions for our Policy Group members from both the U.S. and UK negotiating teams. Wherever we can, we will provide constructive input into the big questions of substance and continue to remind the business and wider community why this matters; our paper, Building on a Solid Foundation, shows real world examples of trade and investment in action and impact in terms of jobs created and livelihoods secured that are the result.
To many companies it may feel that the existing rules around the world’s most valuable economic corridor are already open enough and that any improvements will only be marginal. After all, trade and investment between the U.S and UK is world-beating. In some cases, this may well be true, but a trade agreement will codify and enshrine these freedoms in a treaty which will give even more certainty to the business community. But in other areas, digital and services trade, regulatory coherence and mutual recognition, customs facilitation and labor mobility, there is much that can be done to turbo-charge this economic relationship… and we will need this to recover the ground lost in the health and economic crisis that has hit us.
Aside from the focus on trade, our work bringing people together to talk about the issues of the day has not missed a beat. In the past month we have covered the latest advice on re-opening offices with Cushman and Wakefield, employers legal risk during the COVID Crisis with Pillsbury, how Purpose is becoming the defining cultural identifier for companies with BrandPie, the latest immigration and mobility advice with Fragomen and a dissection of U.S. and UK economic policy with Bloomberg.
And finally, a huge thank you to all of our members for your ongoing support; we know that these are challenging times and we will strive to ensure your commitment to us is recognized with a high quality program of events for you and colleagues to engage with. All feedback welcome!