UK Trade Minister Outlines Post-Brexit Approach to WTO, US Economic Ties
The United Kingdom views “the future of global trade” as revolving particularly around digital economy, services, and development, according to Liam Fox, the country’s Secretary of State for International Trade.
The UK official specifically outlined to audiences in Geneva and Washington over the past week how his country may approach this “new chapter in its history” when it comes to the WTO and US trade ties, respectively, given the expected Brexit date of March 2019.
Speaking late last week at the Graduate Institute of International and Development Studies in Geneva, Switzerland, the UK trade official said that the country’s objectives regarding the WTO would focus on addressing current and future challenges, while “[advancing] the cause of free trade,” as part of its deep-seated commitment to the organisation.
“The UK has been a WTO member since the organisation’s inception and I am proud to stand here today and say that the UK remains, to its core, committed to multilateralism, and to the WTO,” he said.
Devoting much of his speech to the WTO, Fox said that the organisation “retains both a vital symbolic and practical significance,” referring to its achievements in areas ranging from new rules on trade facilitation to drawing in new members – while also suggesting that the WTO still “may be in need of some refurbishment.”
He also suggested that WTO members could gain from “another round of liberalisation,” without going into specific detail on that subject. However, he did specify areas where the UK is interested in seeing the WTO take a leading role, along with its hopes for the organisation’s next ministerial conference.
“At the [Eleventh] Ministerial Conference in Buenos Aires and beyond we should challenge ourselves to adopt similarly bold measures to refurbish those elements of the multilateral architecture that are perhaps showing their age the most, recommitting ourselves to the principle of a robust, rules-based trading system,” he said.
Trade ministers are due to convene in Buenos Aires, Argentina, this coming December for the above-mentioned ministerial, which is the WTO’s highest level meeting. Members are still examining what may form a potential set of outcomes for the Buenos Aires meeting, including a possible deal on fisheries subsidies and some deliverables relating to agriculture. (For more on the WTO, see related stories, this edition)
He also said that the organisation “has the potential to set the agenda” in topics that are, for his country, the shapers of “the future of global trade.” Fox specifically referred to the digital economy, including a “positive outcome” in Buenos Aires; pushing trade as “the main tool of development”; and advancing services liberalisation, later calling for plurilateral talks on a Trade in Services Agreement (TiSA) to resume.
Those TiSA talks, conducted among 23 WTO members that account for 70 percent in global services trade, have been on hold since late last year. (See Bridges Weekly, 24 November 2016)
Fox’s speech came just days after Indian Commerce and Industry Minister Nirmala Sitharaman gave her own remarks on the WTO and multilateralism at the same university, outlining her recommendations for a “multi-pronged approach” on these subjects and warning against “inward looking” policies in the current global geopolitical context. (See Bridges Weekly, 20 July 2017)
UK, US working group
The UK trade official later travelled to Washington for a meeting of the “UK-US Trade and Investment Working Group,” a panel set up to boost bilateral economic ties between the two countries.
The inaugural meeting of the working group took place on Monday 24 July, and was chaired by both Fox and his American counterpart, US Trade Representative Robert Lighthizer.
“We expect this working group to be a key mechanism to deepen our already strong bilateral trade and investment relationship, and to lay the groundwork for our future trade relationship once the UK has left the EU,” said Lighthizer after the meeting, according to a joint release published by his office.
The US official also referred to the “mutual goal of achieving free and fair trade and investment,” using terms that have become common parlance in the new administration’s trade rhetoric. He did not elaborate on what “free and fair trade and investment” would mean in the UK context.
Fox, for his part, elaborated that the working group’s initial efforts will be to smooth over any issues that might arise as the UK exits the European Union, along with paving the way for “potential negotiations” on a bilateral trade pact. That same day, Fox gave a speech at the American Enterprise Institute (AEI), a Washington-based policy think tank, which touched upon similar themes as his Geneva remarks – including on the future of the WTO.
It also looked specifically at the UK-US relationship going forward, with Fox referring more directly to the prospects of a future trade agreement, and highlighting the potential for economies “like the United States, or the UK,” to deepen their trade ties in areas such as services.
“As a priority, the working group will seek to provide stability, certainty, and confidence for businesses on both sides of the Atlantic. Indeed, the first discussions will focus on providing commercial continuity as the UK leaves the EU,” he said at AEI.
“But our ambitions are much wider. The working group is designed to provide a springboard, laying the groundwork for a comprehensive free trade agreement between our two nations post-Brexit – the start of a new and exciting chapter in our special relationship,” Fox added.
The UK government has since released a report, described by Fox at AEI on Monday, looking at the bilateral trading relationship through the lens of every single US district – which Fox said is specifically designed for the 435 members of the US House of Representatives, who represent those districts in Congress.
Trump on UK, EU trade
While the joint release from the working group referred to a UK-US trade agreement as a “possibility,” US President Donald Trump later claimed on social media site Twitter that the sides were working on an accord.
“Working on major Trade Deal with the United Kingdom,” said Trump, who also claimed that the European Union is “very protectionist” with the United States. Trump did not elaborate on his “protectionist” argument, though the US leader has previously blamed Germany for the US’ trade deficit in relation to that country. (See Bridges Weekly, 1 June 2017)
What Trump’s statement might mean for the prospects of reinvigorating an existing trade negotiation between the US and EU was also unclear.
The US and EU launched negotiations in 2013 for the Transatlantic Trade and Investment Partnership (TTIP), envisioning a comprehensive deal that would yield market access gains in goods, services, and public procurement, along with making progress in harmonising rules and regulations between the economic powerhouses.
While the talks have been on hold since late 2016, Lighthizer has said that the administration views TTIP as “an area where there are a lot of very positive reasons to go forward,” pending the completion of EU elections in some member states. Officials from the US and EU reportedly agreed in May to develop a “joint action plan” on trade. (See Bridges Weekly, 29 June 2017 and 1 June 2017, respectively)