United Kingdom–United States Free Trade Agreement Explained

UK-US FTA
Long Name:United Kingdom–United States Free Trade Agreement
Type:Free trade agreement
Context:Investment and Trade agreement between the United Kingdom and the United States
Negotiators:
Parties:
Language:English

The United Kingdom–United States Free Trade Agreement (UKUSFTA) is a proposed free trade agreement between the United Kingdom and the United States.[1]

The UK became legally able to independently negotiate trade agreements when it left the European Union from 1 January 2020 due to a transition period which lasted until the UK formally exited the EU.[2] Negotiations opened in May 2020, but have stagnated since 2021 under the Biden Administration which has focused on fixing its domestic economy.[3] [4]

History

UKUSFTA Round of Negotiations
Round Dates Location Ref.
1 5–15 May 2020 Virtual meeting [5]
2 15–26 June 2020 Virtual meeting [6]
3 27 July–7 August 2020 Virtual meeting [7]
4 8–18 September 2020 Virtual meeting [8]
5 19–30 October 2020 Virtual meeting [9]

Trump Administration

On 28 February 2019, the United States released its negotiating objectives.[10] The United Kingdom released its objectives on 1 March.[11] The United Kingdom and the United States began negotiations on 5 May 2020, and have had four rounds of negotiations as of September 2020.[12] [13]

In December 2020, the two countries signed an agreement on various goods, continuing trading terms from previous European Union–United States agreements.[14]

Biden Administration

The Biden Administration made it clear that the US would not further talks about a potential FTA, due to British threats against ratifying the Northern Ireland Protocol which would violate international law, with dangerous ramifications that could threaten the Good Friday Agreement.[15] [16] [17] [18] With the administration of President Joe Biden uninterested in further negotiations, the United Kingdom began negotiating economic agreements with individual U.S. states.[19] Regulation of international trade is a federal responsibility under the Commerce Clause of the U.S. Constitution, preventing state agreements from changing customs rules.[20] Therefore, the UK has aimed at signing Memorandum of Understanding (MoU) agreements with numerous states.[21] MoUs aim to remove market access barriers and increase trade and investment opportunities for UK and US companies.[22] Former British trade minister Penny Mordaunt claimed that US state-level deals would pave the way for a full UK-US FTA.[23]

UK–US State Memorandum of Understanding Agreements
No. Signed State Ref.
1 27 May 2022
2 20 July 2022 [24]
3 7 December 2022 [25]
4 18 April 2023 [26]
5 22 June 2023 [27]
6 25 September 2023 [28]
7 14 November 2023 [29] [30]
8 13 March 2024 [31] [32]

Trade negotiations ongoing:[33]

Following President Joe Biden and UK Prime Minister Rishi Sunak's meeting held in Northern Ireland on 12 April 2023, talks of a UK–US free trade agreement were postponed until at the very least 2025.[34]

In June 2023, Biden and Sunak announced the 'Atlantic Declaration' to strengthen economic ties between the UK and the US.[35] The agreement included a limited trade pact covering critical minerals needed for EV batteries, a new data protection deal, and easing other trade barriers.[36] [37] The declaration commits both nations to increase research collaboration in future technologies, such as AI, future 5G and 6G telecoms, quantum, semiconductors and engineering biology.[38] Further, these talks led to a commitment in principle to a new UK–US Data Bridge that facilitates the transfer of data by UK businesses to certified U.S. organizations.[39]

During the signing of the accession of the United Kingdom to CPTPP on the 16th of July 2023, Kemi Badenoch blamed the lack of progress on the UK-US FTA on the change of administration from Donald Trump to Joe Biden after the 2020 election.[40] Badenoch stated that “The US is not carrying out any free trade agreements with any country”.[41]

On 3 October 2023, Biden and Sunak were reported to be preparing a "foundational" trade agreement between the two countries which would be modeled off of the Indo-Pacific Economic Framework. However this agreement will not constitute as a free trade agreement under World Trade Organization rules as the proposals do not contain market access commitments.[42] The proposed partnership aims to cover subjects such as digital trade, labour protections and agriculture.[43] On the same day, Badenoch reiterated that there was "zero" chance of a free trade agreement under President Biden's administration, citing his attitude to such deals.[44] On 18 December 2023, it was announced that all talks for the "foundational trade partnership" had been abandoned.[45]

Chapters

Areas covered in the FTA and contention points:[46]

See also

Notes and References

  1. Web site: Truss. Eizabeth. 5 May 2020. UK and US start trade negotiations. 25 April 2024. GOV.UK. https://web.archive.org/web/20200505065546/https://www.gov.uk/government/news/uk-and-us-start-trade-negotiations. 5 May 2020. live.
  2. Web site: Eiser . McEwen . Roy . David . Nicola . Graeme . 7 April 2021 . The Trade Policies of Brexit Britain: the Influence of and Impacts on the Devolved Nations . Brill Publishers. 20 February 2024. https://ifs.org.uk/uploads/publications/comms/r116.pdf. 14 April 2023. dead.
  3. Web site: Pickard. Jim. 3 May 2020. UK-US trade talks to begin on Tuesday. 25 April 2024. Financial Times. subscription. https://web.archive.org/web/20200504111115/https://www.ft.com/content/a5f8eeb1-2c49-4125-927d-1ff0762dfdb5. 4 May 2020. live.
  4. Web site: Giordano. Chiara. 21 January 2021. We'll fix US economy before signing trade deals, says Biden's Treasury pick Janet Yellen. The Independent. 26 November 2023. https://web.archive.org/web/20231126160926/https://www.the-independent.com/news/world/americas/us-politics/biden-brexit-us-uk-trade-deal-janet-yellen-b1791012.html. 26 November 2023. live.
  5. Web site: Truss. Elizabeth. 18 May 2020. Negotiations on the UK's future trading relationship with the US: Update. GOV.UK. 21 April 2024. https://web.archive.org/web/20200518084006/https://www.gov.uk/government/news/negotiations-on-the-uks-future-trading-relationship-with-the-us-update. 18 May 2020. live.
  6. Web site: Truss. Elizabeth. 30 June 2020. Negotiations on the UK's Future Trading Relationship with the US: Update. UK Parliament. 21 April 2024. https://web.archive.org/web/20201025075951/https://questions-statements.parliament.uk/written-statements/detail/2020-06-30/hcws324. 25 October 2020. live.
  7. Web site: Truss. Elizabeth. 20 August 2022. Negotiations on the UK's Future Trading Relationship with the US: Update. GOV.UK. 21 April 2024. https://web.archive.org/web/20200819105656/https://www.gov.uk/government/news/negotiations-on-the-uks-future-trading-relationship-with-the-us-update--2. 19 August 2020. live.
  8. Web site: Truss. Elizabeth. 22 September 2020. Negotiations on the UK's Future Trading Relationship with the US: Update. GOV.UK. 21 April 2024. https://web.archive.org/web/20200922084114/https://www.gov.uk/government/news/negotiations-on-the-uks-future-trading-relationship-with-the-us-update--3. 22 September 2020. live.
  9. Web site: Truss. Elizabeth. 2 November 2020. Negotiations on the UK's Future Trading Relationship with the US: Update. GOV.UK. 21 April 2024. https://web.archive.org/web/20201102132133/https://www.gov.uk/government/news/negotiations-on-the-uks-future-trading-relationship-with-the-us-update--4. 2 November 2020. live.
  10. Web site: 2 March 2020. UK publishes negotiating objectives for post-Brexit US trade deal. 25 April 2024. ITV News. https://web.archive.org/web/20200303041549/https://www.itv.com/news/2020-03-02/uk-publishes-negotiating-objectives-for-us-trade-deal/. 3 March 2020. live.
  11. Web site: 1 March 2019. U.S. Trade Representative Releases Summary of U.S.-UK Trade Agreement Negotiations. 25 April 2024. Thompson Hine. https://web.archive.org/web/20220625045646/https://www.thompsonhinesmartrade.com/2019/03/u-s-trade-representative-releases-summary-of-u-s-uk-trade-agreement-negotiations/. 25 June 2022. live.
  12. Web site: Lawder. David. Shalal. Andrea. 5 May 2020. U.S., UK launch trade talks, pledge quick deal as virus ravages global economy. live. https://web.archive.org/web/20200505191813/https://mobile.reuters.com/article/amp/idUSKBN22H0E0. 5 May 2020. 25 April 2024. Reuters.
  13. Web site: Warrington. James. 22 September 2020. Liz Truss hails 'productive' fourth round of UK-US trade talks. live. https://web.archive.org/web/20200505191813/https://mobile.reuters.com/article/amp/idUSKBN22H0E0 . 5 May 2020. 25 April 2024. City A.M..
  14. Web site: U.S.-UK Trade Agreement Negotiations. Office of the United States Trade Representative. 25 April 2024. https://web.archive.org/web/20190327135536/https://ustr.gov/countries-regions/europe-middle-east/europe/united-kingdom/us-uk-trade-agreement-negotiations. 27 March 2019. live.
  15. Web site: Parker. George. Noonan. Laura. Williams. Aime. US fires warning shot at Johnson on Northern Ireland. 17 March 2021. 26 April 2024. Financial Times. subscription. en. 17 March 2021. https://web.archive.org/web/20210317040319/https://www.ft.com/content/2e11a5db-dec0-41df-a8c5-d8cbcb03c183. live.
  16. Web site: Darmanin. Jules. Pogatchnik. Shawn. Casalicchio. Emilio. US reprimands UK over Northern Ireland protocol row. 10 June 2021. 26 April 2024. Politico. en. 10 June 2021. https://web.archive.org/web/20210610094718/https://www.politico.eu/article/uk-brexit-northern-ireland-protocol-david-frost-united-states-reprimands/. live.
  17. Web site: Landow. Charles. McBride. James. Moving Past the Troubles: The Future of Northern Ireland Peace . 16 February 2024. 25 April 2024. Council on Foreign Relations. en. 24 April 2024. https://web.archive.org/web/20240424113527/https://www.cfr.org/backgrounder/moving-past-troubles-future-northern-ireland-peace. live.
  18. Web site: Bromund. Ted R.. Free Trade Between U.S., U.K. Is Step Closer . The Heritage Foundation. en. 26 April 2024. https://web.archive.org/web/20220628143430/https://www.heritage.org/trade/commentary/free-trade-between-us-uk-step-closer. 28 June 2022. live.
  19. Web site: Pickard. Jim. Williams. Aime. UK has no plans to strike US trade deal during Rishi Sunak visit to Washington. 30 May 2023. Financial Times. 26 April 2024. subscription. https://web.archive.org/web/20230530231734/https://www.ft.com/content/1fd173a6-8718-4798-b692-685801ec1604. 30 May 2023. live.
  20. Web site: ArtI.S8.C3.8.1 Overview of Foreign Commerce Clause. 26 April 2024. Constituion Annotated. en. 2 May 2023. https://web.archive.org/web/20230502220251/https://constitution.congress.gov/browse/essay/artI-S8-C3-8-1/ALDE_00001057/. live.
  21. Web site: Nevett. Joshua. Brexit: UK signs first US state-level trade agreement with Indiana. 10 June 2021. 26 April 2024. BBC News. en. 27 May 2022. https://web.archive.org/web/20220527102118/https://www.bbc.com/news/uk-politics-61604784. live.
  22. Web site: Shalal. Andrea. Britain Eyes Trade Agreements With California, Utah. 9 December 2022. 26 April 2024. US News. en. 10 December 2022. https://web.archive.org/web/20221210072121/https://www.usnews.com/news/top-news/articles/2022-12-09/britain-eyes-trade-agreements-with-california-utah. live.
  23. Web site: Harper. Jo. UK-US: What's happened to their free trade deal?. 7 July 2023. 26 April 2024. Deutsche Welle. https://web.archive.org/web/20230707163046/https://www.dw.com/en/uk-us-whats-happened-to-their-free-trade-deal/a-66122162. 7 July 2023. live.
  24. Web site: Mordaunt. Penny. UK signs second state-level agreement with North Carolina. 20 July 2022. GOV.UK. 26 April 2024. https://web.archive.org/web/20220720150152/https://www.gov.uk/government/news/uk-signs-second-state-level-agreement-with-north-carolina. 20 July 2022. live.
  25. Web site: Milligan. Ellen. UK Signs Third US State Trade Pact in Absence of a Broader Deal. 7 December 2022. Bloomberg. 26 April 2024. subscription.
  26. Web site: Lanktree. Graham. UK strikes state-level trade pact with Oklahoma. 18 April 2023. Politico. 26 April 2024. https://web.archive.org/web/20230418112452/https://www.politico.eu/article/uk-strikes-state-level-trade-pact-with-oklahoma/. 18 April 2023. live.
  27. Web site: Huddleston. Nigel. UK puts pen to paper on fifth trade pact with a US state. 20 July 2022. GOV.UK. 26 April 2024. https://web.archive.org/web/20230622084904/https://www.gov.uk/government/news/uk-puts-pen-to-paper-on-fifth-trade-pact-with-a-us-state. 22 June 2023. live.
  28. Web site: Ghani. Nasrat. UK signs sixth US state deal with Washington State. 25 September 2023. GOV.UK. https://web.archive.org/web/20230925214330/https://www.gov.uk/government/news/uk-signs-sixth-us-state-deal-with-washington-state. 25 September 2023. live.
  29. Web site: Badenoch. Kemi. UK and Florida sign pact to boost trade. 15 November 2023. GOV.UK. 15 November 2023. 14 November 2023. https://web.archive.org/web/20231114173527/https://www.gov.uk/government/news/uk-and-florida-sign-pact-to-boost-trade. live.
  30. Web site: Shalal. Andrea. Smout. Alistair. UK minister sees 'huge opportunities' from trade pact with Florida. 14 November 2023. Reuters. 15 November 2023. https://web.archive.org/web/20231114182850/https://www.reuters.com/world/uk-minister-sign-trade-pact-with-florida-governor-desantis-2023-11-14/. 14 November 2023. live.
  31. Web site: UK signs trade pact with second biggest US state – Texas. 13 March 2024. GOV.UK. 13 March 2024. https://web.archive.org/web/20240313091532/https://www.gov.uk/government/news/uk-signs-trade-pact-with-second-biggest-us-state-texas. 13 March 2024. live.
  32. Web site: White. Lucy. UK Signs Trade Pact With Texas in Effort to Boost Green Industry. 13 March 2024. Bloomberg. 13 March 2024. subscription. https://web.archive.org/web/20240313113044/https://www.bloomberg.com/news/articles/2024-03-13/uk-signs-trade-pact-with-texas-in-effort-to-boost-green-industry. 13 March 2024. live.
  33. Web site: UK minister to sign trade pact with Florida Governor DeSantis. 8 November 2023. The Straits Times. 20 November 2023. https://web.archive.org/web/20231115020505/https://www.straitstimes.com/world/europe/uk-minister-to-sign-trade-pact-with-florida-governor-desantis. 15 November 2023. live.
  34. News: Riley-Smith . Ben . 12 April 2023. Exclusive: US trade deal talks won't start until 2025 at the earliest . en-GB . The Telegraph. 28 June 2023. 0307-1235. https://web.archive.org/web/20230412110742/https://www.telegraph.co.uk/politics/2023/04/12/us-trade-deal-talks-2025-biden-sunak/. 12 April 2023. live.
  35. Web site: Hunnicutt. Trevor. Smout. Alistair. Ravikumar. Sachin. US and UK back new 'Atlantic Declaration' for economic cooperation. 8 June 2023. Reuters. 26 April 2024. 8 June 2023. https://web.archive.org/web/20230608210446/https://www.reuters.com/world/us-uk-back-new-atlantic-declaration-economic-cooperation-2023-06-08/. live.
  36. Web site: Rigby. Beth. Sunak and Biden agree 'Atlantic Declaration' to boost economic security. 8 June 2023. Sky News. 26 April 2024. https://web.archive.org/web/20230608182044/https://news.sky.com/story/uk-and-us-agree-new-partnership-to-boost-economic-security-as-sunak-and-biden-meet-at-white-house-12899035. 8 June 2023. live.
  37. Web site: Mason. Chris. What Sunak's Atlantic Declaration is – and isn't. 9 June 2023. BBC News. 26 April 2024. https://web.archive.org/web/20230609054153/https://www.bbc.co.uk/news/uk-politics-65852054. 9 June 2023. live.
  38. Web site: Sunak. Rishi. UK and US launch first-of-its kind economic partnership. 8 June 2023. GOV.UK. 26 April 2024. https://web.archive.org/web/20230608184358/https://www.gov.uk/government/news/uk-and-us-launch-first-of-its-kind-economic-partnership. 8 June 2023. live.
  39. Web site: Parker. George. Schwartz. Felicia. Politi. James. Pickard. Jim. Joe Biden and Rishi Sunak unveil 'Atlantic declaration' to strengthen economic ties. 8 June 2023. Financial Times. 26 April 2024. subscription. https://web.archive.org/web/20230608195845/https://www.ft.com/content/8f1667f8-f17b-4a56-82af-97fd812c4fe6. 8 June 2023. live.
  40. Web site: Crerar. Pippa. Kemi Badenoch signs treaty for UK to join Indo-Pacific trade bloc. 16 July 2023. The Guardian. 26 April 2024. https://web.archive.org/web/20230716121921/https://www.theguardian.com/politics/2023/jul/16/kemi-badenoch-signs-treaty-for-uk-to-join-indo-pacific-trade-bloc-cptpp-uk-economy. 16 July 2023. live.
  41. Web site: Reynolds. Isabel. Zhou. Wei. UK Joins Pacific Trade Deal, Sees 'Very Low' Chance of US Pact. 16 July 2023. Bloomberg. 26 April 2024. subscription. https://web.archive.org/web/20230716091520/https://www.bloomberg.com/news/articles/2023-07-16/uk-signs-pact-to-join-pacific-trade-deal-focus-turns-to-china. 16 July 2023. live.
  42. Web site: Lanktree. Graham. Bade. Gavin. Revealed: Joe Biden and Rishi Sunak seek UK/US trade pact before 2024 elections. 3 October 2023. 3 October 2023. Politico. https://web.archive.org/web/20231003175721/https://www.politico.eu/article/revealed-joe-biden-rishi-sunak-seek-uk-us-trade-pact-before-2024-elections/. 3 October 2023. live.
  43. Web site: Stacey. Kiran. US wants UK to open up its agriculture markets as part of new trade deal. 3 October 2023. 3 October 2023. The Guardian. 4 October 2023. https://web.archive.org/web/20231004071352/https://www.theguardian.com/business/2023/oct/03/us-wants-uk-to-open-up-its-agriculture-markets-as-part-of-new-trade-deal. live.
  44. Web site: Smout. Alistair. UK minister says "zero" chance of free trade deal with Biden. 3 October 2023. 3 October 2023. Reuters. https://web.archive.org/web/20231003193411/https://www.reuters.com/world/uk/uk-minister-says-zero-chance-free-trade-deal-with-biden-2023-10-03/. 3 October 2023. live.
  45. Web site: Stacey. Kiran. Joe Biden signals he has no interest in signing US-UK trade agreement. 18 December 2023. 18 December 2023. The Guardian. https://web.archive.org/web/20231218155129/https://www.theguardian.com/politics/2023/dec/18/joe-biden-signals-he-has-no-interest-in-signing-us-uk-trade-agreement. 18 December 2023. live.
  46. Web site: Powney. Mark. 20 May 2020. UK-US Free Trade Agreement Negotiations Progress. 26 April 2024. Business News Wales. https://web.archive.org/web/20200611114808/https://businessnewswales.com/uk-us-free-trade-agreement-negotiations-progress/. 11 June 2020. live.

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