US, UK launch trade talks as virus ravages global economy

A handout photo from 10 Downing Street showing British international trade secretary Liz Truss during a video conference call with US Trade Representative Robert Lighthizer, in the Foreign Office in London on Tuesday. The formal negotiations on a fre
A handout photo from 10 Downing Street showing British international trade secretary Liz Truss during a video conference call with US Trade Representative Robert Lighthizer, in the Foreign Office in London on Tuesday. The formal negotiations on a free trade agreement, launched on Tuesday, will be conducted online.PHOTO: AGENCE FRANCE-PRESSE

WASHINGTON • The United States and Britain launched formal negotiations on a free trade agreement on Tuesday, vowing to work quickly to seal a deal that could counter the massive drag of the coronavirus pandemic on trade flows and their economies.

The talks, to be conducted online, will involve more than 300 US and British staff and officials in nearly 30 negotiating groups, US Trade Representative Robert Lighthizer and British international trade secretary Liz Truss said in a joint statement.

"We will undertake negotiations at an accelerated pace and have committed the resources necessary to progress at a fast pace," they said. "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."

The first round of talks began as new data showed a record drop in US exports and a contraction in the vast US service sector for the first time in more than a decade.

It is the US' first major new trade negotiation this year. The United Kingdom has also been working out trade terms with the European Union following its exit from the bloc in January.

London's goal was to expeditiously complete both sets of talks and there could be a positive dynamic between them though they are being headed by different lead negotiators, a British official told journalists in a briefing.

British ambassador Karen Pierce said it was "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 British trade talks as 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 US 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 the pandemic "has shown that depending purely on cheap imports for strategic products can make us vulnerable in times of crisis".

But the allies are at odds over tariffs. Asked about US 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."

Republican US Senator Chuck Grassley, another big critic of tariffs, said he hopes a strong agreement with Britain would lay the groundwork for an improved trade deal with the EU, which has so far resisted US demands for increased agricultural access.

"If we get a good deal with the UK on agriculture, it's going to embarrass Europe," Mr Grassley said.

Agriculture will likely be among the thorniest issues, given strong British opposition to US genetically modified crops and antibacterial treatments for poultry.

Trade in goods between the two countries was valued at US$127.1 billion (S$180 billion) in 2018. Britain is the seventh-largest US goods trading partner, according to the US Census Bureau.

Tuesday's opening plenary will be followed by virtual meetings until May 15. Further rounds will take place approximately every six weeks, the British embassy said. There was no specific deadline for completing the talks.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 07, 2020, with the headline 'US, UK launch trade talks as virus ravages global economy'. Print Edition | Subscribe