US trade deal warning: Critic reveals red lines – warning to Boris as Trump drags heels

Ted Bromund, a senior research fellow in Anglo-American relations at the Heritage Foundation, a conservative think-tank in Washington, revealed America’s main focuses to secure a free trade agreement. He said: “There are lots of areas – digital trade, visa liberalisation, financial services – but if you can’t agree to essentially get rid of tariffs on visible trade, I’m not sure it’s a free trade agreement.”

Mr Bromund said one area ripe for tariff reduction was in the automotive trade, Britain’s largest export sector to the US.

US passenger car tariffs are 2.5 percent, with pickup truck tariffs at 25 percent, while Britain maintain a 10 percent car tariff.

The US and Britain launched trade negotiations by videoconference on Tuesday, vowing to work quickly to seal a deal that could counter the massive drag of the coronavirus pandemic on trade flows and the two allies’ economies.

The talks, to be conducted virtually, will involve over 300 US and UK staff and officials in nearly 30 negotiating groups.

In a joint statement and UK trade minister Liz Truss and US Trade Representative Robert Lighthizer: “We will undertake negotiations at an accelerated pace and have committed the resources necessary to progress at a fast pace.

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“A Free Trade Agreement would contribute to the long-term health of our economies, which is vitally important as we recover from the challenges posed by COVID-19.

British Ambassador Karen Pierce said it “a very good sign of confidence in economic recovery” that the two countries were moving ahead with the talks.

Mr Lighthizer, who has named the UK trade talks one of his top priorities for 2020, published objectives more than a year ago that sought full access for US agricultural products and reduced tariffs for American manufactured goods.

Stung by shortages of medical equipment and drugs during the pandemic, both countries are seeking to shift some supply chains away from China.

Mr Lighthizer said in remarks released later that the pandemic “has shown that depending purely on cheap imports for strategic products can make us vulnerable in times of crisis” and that the US needs a healthy manufacturing base and thriving farmers.

But the nations are at odds over tariffs, including steel and aluminium duties imposed by Washington in 2018.

Asked about President Donald Trump’s threat to impose more tariffs on China over its handling of the outbreak, Ms Pierce said: “In general terms, tariffs are not particularly conducive to free trade, and we the Brits believe very much in free trade.

“It’s in our history, it’s in our DNA. The dispute between the US and China is for them to resolve.”

Britain is also pushing the US and the EU to resolve a dispute over aircraft subsidies that has resulted in tit-for-tat tariffs, including on Scotch whiskey.

Republican US Senator Chuck Grassley of Iowa, another big critic of tariffs, said he hopes a strong agreement with the UK lays the groundwork for an improved trade deal with the EU, which has so far resisted American demands for increased agriculture access.

He said: “If we get a good deal with the UK on agriculture, it’s going to embarrass Europe.”

Mr Grassley said he thought the talks will be more difficult via videoconference, adding: “It seems to me it’s not quite as good as sitting across the table from them.”

Agriculture is expected to be among the thorniest issues in the talks, given strong British opposition to US genetically modified crops and antibacterial treatments for poultry.

Prime Minister Boris Johnson has vowed to drive a “hard bargain” and Ms Truss has said that Britain would not diminish its food safety standards.

The UK official warned Britain also will not change its approach to drug pricing or Britain’s NHS.

Trade in goods between the US and UK was valued at $127.1 billion in 2018, with the two sides roughly in balance, while the services trade topped $134.8 billion.

Britain is the seventh-largest US goods trading partner, after South Korea, according to the US Census Bureau.

Tuesday’s opening of talks will be followed by virtual meetings from May 6 to 15.

The UK official said while it was unusual to negotiate on all areas at once, the two sides were keen to move forward quickly.

Further rounds will take place approximately every six weeks and will be carried out remotely until it is safe to travel, the UK embassy said.

There is no specific deadline for completing the talks.

The UK is also working towards a trade agreement with the EU following its exit from the bloc in January.

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