The United Kingdom and the United States are finally positioned with the rare opportunity to deepen their special relationship and reach their full potential with a robust free trade agreement. As the United Kingdom progresses with its departure from the European Union, the UK’s recent decision on Huawei and many more changes ahead will serve as indicators that we are committed to make the relationship between the US and the UK one of the strongest in the world.
The key hurdle to developing this deeply rooted partnership is the negotiation of a comprehensive free trade agreement between the United States and the United Kingdom. U.S. Secretary of State Mike Pompeo publicly stated his aim to realize the full potential of the deal and surpass the current value of the trade relationship, which is over 300 billion dollars annually.
We are encouraged by the reports that our two lead negotiators – Bob Lighthizer, the US trade representative and the UK’s Trade Secretary Liz Truss – are working closely and collegially to hammer out a deal by the end of the year.
Our greatest concern, however, is one issue that should be resolved expeditiously, separate and apart from the FTA discussions. Due to the US-EU trade dispute on civil aircraft (Boeing/Airbus) subsidies, retaliatory tariffs were imposed by both the United States and the EU. Since then, exports of UK products such as scotch whiskey have fallen by 30 percent and U.S. whiskey distillers’ exports have fallen by a third. As a result, the industry in both countries is experiencing loss of jobs and business. At a time when a pandemic is severely hurting economies and individuals all around the world, this trade dispute is doing the same.
The COVID-19 pandemic is causing economic hardship and suffering across the globe. Thanks to this trade dispute, small areas like Moray, Scotland, are facing additional hardship that is particularly unfair. The main industry that provides this locality the bulk of its livelihood is the production of scotch whisky, shortbread, and cashmere, all of which are presently subject to retaliatory tariffs.
As the heat of the EU and U.S. trade dispute increases, U.S. and UK spirits manufacturers are getting caught in the crossfire. The retaliatory tariffs from the U.S. are intended to put pressure on the EU amidst the ongoing aircraft dispute, and bureaucrats in Brussels have made it clear that they have no interest in protecting the spirit industry. This has resulted in excessive burdens during an already difficult time and putting the U.S.-UK trade agreement in jeopardy.
The United States has far more to gain from a future free trade agreement with the UK than it does maintaining tariffs on spirits, especially with the UK’s departure from the EU only five months away. We urge Ambassador Lighthizer and Secretary Truss to bilaterally negotiate on the very important Boeing/Airbus dispute and the retaliatory tariffs on spirits.
The uniquely special US/UK relationship provides the perfect trade environment and as we fight the COVID-19 pandemic, the need to protect and create jobs in both the United States and the United Kingdom demands an agreement.
Ambassador Lighthizer and his USTR team are due to publish an updated review on tariffs on Aug. 12. This could be the next step in making the Washington-London relationship more special as the United Kingdom readies itself for life beyond the EU. There are fears and rumours that tariffs on spirits could be increased to 100 percent and extended to blended whisky, gin, and vodka. To build confidence as we deal with the challenges of the FTA, discussion of such high tariffs should be abandoned. This will only hurt both U.S. and UK business and do nothing to address the EU for their illegal subsidies of Airbus or systemically change their behavior. Brussels will not act in favor of jobs in Scotland as the UK leaves the EU.
As the UK’s recent decision on Huawei confirmed, the U.S.-UK relationship is truly unmatched. We will need this trust and confidence in one another as we progress in our FTA negotiations. At times, it is only natural that these discussions will be difficult and even contentious. It is why we urge Ambassador Lighthizer and Secretary Truss to work with one another, resolve these matters bilaterally, continue an unfettered march to a quickly negotiated and historic free trade agreement that will boost American and UK jobs when they are needed the most.
Rep. George Holding represents North Carolina’s 2nd District and Douglas Ross, MP, who represents Moray, is leader of the Scottish Conservatives.