Much has changed since the United States first launched trade agreement negotiations with the United Kingdom in 2019. Current geopolitical realities push the United States and the United Kingdom to rely less on China as an export market or as a source of imports, including inputs for manufacturing. In this new environment, bringing sluggish U.S.-UK trade agreement negotiations to a successful conclusion should be an immediate priority of the Biden administration.
The potential economic and strategic benefits offered by a U.S.-UK trade agreement are compelling. Due to the unique compatibility of the two economies, they can further be pursued as the foundation for implementing the lengthening list of aspirational multinational initiatives recently announced by the Biden administration, including the U.S.-EU Trade and Technology Council, the Indo-Pacific Economic Framework, the Americas Partnership for Economic Prosperity, the U.S.-Kenya Strategic Trade and Investment Partnership, and the U.S.-Taiwan Initiative for 21st Century Trade. As C.S. Lewis once said, “Put first things first and we get second things thrown in.”
The regional objectives listed above are expensive, but in a dangerous world they are much more elusive and challenging than tying down the crucial U.S.-UK trade partnership. Recently, in the aftermath of Brexit, the United Kingdom has pushed further on trade agreements than the United States: successfully concluding the UK-EU Trade and Cooperation Agreement to exit the European Union, followed by full bilateral trade agreements with Australia, New Zealand, and others. The United Kingdom has recently been accepted to negotiate membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), even as it has to look on as the U.S.-EU Trade and Technology Council considers a broad range of trade issues.
The new global environment provides an opportunity for the United States to capitalize on its overall strategic negotiating advantage as the most sought-after and attractive market with which to strike a trade agreement. The United Kingdom and many other countries remain eager to move forward with the United States on market opening trade agreements, and because of their interest, the United States enjoys a strategic advantage—one that is now being ignored at significant economic cost. As other economies (such as China) grow and develop naturally over time, the value of this strategic advantage will decline, so moving ahead immediately positions the United States to best achieve its key commercial, job-creating negotiating objectives. This paper attempts to summarize the major potential economic benefits.
While the U.S. Trade Representative (USTR) declines to participate in substantive market access negotiations, many countries around the globe are dashing ahead to conclude trade agreements that open markets to their exports. As a practical matter, due to new trade agreements among other countries, the United States’ approach to regulating sensitive commercial matters is becoming less globally relevant. To rejuvenate its global influence in commerce, international trade, and regulation, the United States needs to move forward now with the United Kingdom.
Resetting and reinvigorating its close relationship with the United Kingdom should improve the United States’ ability to work bilaterally to develop constructive plurilateral responses to strategic challenges posed by China, based on coalitions of the willing, which could be precursors to multilateral solutions. Collaboration with the United Kingdom will improve the United States’ vantage point and influence when combatting the China challenge, which includes: repression in Hong Kong; genocide in Xinjiang; coercion aimed at Taiwan, Australia, and other allies; unfair government subsidies; and widespread theft of cutting-edge Western intellectual property. The United Kingdom will be a valuable partner for the United States on a common and positive free market agenda for the global economy, while simultaneously mitigating the effects of rising bilateral tensions with China. Working together, with a shared commitment to the principles of the World Trade Organization (WTO), the United States and the United Kingdom may be able to reset the global rules of trade and regulation with a new advanced template, so that the system of global commerce functions better for workers and businesses alike.
