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Thursday, May 21, 2020

ANALYSIS/OPINION:

While most of the world is waylaid by the enormity of the pandemic, Britain and the United States have soldiered on with their planned trade negotiations this month. This resolve, even as both nations are figuring out how to resuscitate domestic economies and communities, is a testament to the value of the British-American alliance. Come what may, the Special Relationship is open for business.

Taking advantage of the travel ban, both governments launched the first of multiple-round negotiations earlier this month via video conference. U.K. Trade Secretary Liz Truss expressed enthusiasm to increase trade with “our largest trading partner … that can help our economies bounce back from the economic challenge posed by coronavirus.” 


But even with this kind of optimism, the constraints of COVID-19, including the dormancy of Congress and Parliament, have realistically diminished the scope and potential of the quick and robust deal that was hoped for by both sides. Moreover, notwithstanding that the agreement would enhance trade, economy and employment, congressional Democrats would sooner cut off a limb than give President Trump any assistance in passing the coveted free trade agreement, which would be a major pre-election victory. A more realistic scenario is a scaled-back “mini-deal” not requiring congressional assent.

But first, each party’s conditions must be addressed. For its part, the U.K.’s chief concerns include preventing attempts to privatize the National Health Service (though the Trump administration has reassured that this is not in the plan) as well as divergent policies on food and agricultural practices.  

So, too, the U.K.’s farming and agriculture sectors have expressed concerns, but Ms. Truss said Wednesday, “An agreement with the U.S. could remove tariffs of up to 26% on British beef — a market only recently opened and worth £66m to U.K. farmers.” She added the trade agreement could help farmers source better and cheaper production.  

On the U.S. side, unsurprisingly, China looms large, even in bilateral trade negotiations between the United States and the U.K. Indeed, there has been friction between both nations over the U.K.’s commitment, fully supported by Prime Minister Boris Johnson, to deploy a significant percentage of Chinese telecom Huawei’s equipment in the build-out of the U.K.’s 5G networks. But as the pandemic has rolled out many in Parliament are understandably calling for a more anti-China stance. Time will tell.

But, for the most part, there has been great enthusiasm for the bilateral trade initiative from both White House and congressional Republicans. A recent letter penned by Sen. Rob Portman urged quick action, as “it is in the interest of the United States to act before the European Union does. Prioritizing these negotiations will ensure American workers, farmers and service providers have the best possible chance at earning new access to U.K. markets” — a decidedly laudable objective in light pandemic-induced economic devastation.

The U.K. government analysis suggests, with the right deal, U.S.-U.K. trade could increase by £15.8bn, wages could get a long-term bounce worth £1.8bn, and that the deal could help maximize the UK’s digital, professional services, auto manufacturing and food processing potential. Furthermore, “about 62% of all goods exported from the U.S. to the U.K., and 42% of all U.K. goods exported to the U.S., are supply-chain components, so the lowering of tariffs will make production cheaper for all.” 

Unsurprisingly, the Special Relationship-hating New York Times forecasts failure. Instead of focusing on the potential for increasing bilateral trade that the tariff-reducing agreement could yield, The Times moaned, “a trade deal with the United States was always going to be far less important for Britain than its parallel talks with the European Union, given their greater trade and closer integration.” 

In actuality, even a scaled-back deal will not only be an economic boon for both nations, but it will also give both U.S. and Britain leverage in their respective trade negations with the EU.  

Churchill himself coined the phrase “Special Relationship” at a speech in Fulton, Missouri, in 1946 in which he described, “a relationship based upon “the great principles of freedom and the rights of man,” critical to maintaining world peace. A quality trade agreement will have many benefits for both the United States and Britain, and will bolster this partnership, critical to the prosperity and stability of the world.

• Lee Cohen, a fellow of the Danube Institute and a specialist on U.S-U.K. policy, for years advised the House Committee on Foreign Affairs and founded the Congressional United Kingdom Caucus.


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