The UK will be a champion of free trade and will seek Free Trade Agreements (FTAs) with like-minded democracies.
An FTA with the US represents significant opportunities throughout the economy, from agriculture to professional services. Potential benefits include better jobs, higher wages, more choice and lower prices for all parts of the UK. This document sets out the strategic approach for securing agreement with the US as well as the evidence that supports this approach.
UK-US total trade was valued at £220.9 billion in the last year, including 19.8% of all our exports. The Government’s analysis shows a UK-US FTA could increase trade between both countries by £15.3 billion in the long run, in comparison to 2018, and increase UK workers’ wages by £1.8 billion.
The US is a developed, high-wage economy with high standards and is our top source of investment and the top destination for UK investment. We already have over £700 billion invested in each other’s economies, and every day over a million Britons and over a million Americans work for companies from the other nation.
Removing trade barriers with the US could deliver huge gains, especially for the 30,000 Small and Medium-sized Enterprises (SMEs) across the UK already trading with the US and open opportunities to others. For example, the US currently levies £451 million in tariffs on UK exports each year.
The world-leading agreement the UK wants will also be geared towards maximising the UK’s reach in emerging fields like global data flows and Artificial Intelligence (AI). Professional services, food processing and car manufacturing are among the sectors that could also benefit.
The Government has been clear that when we are negotiating trade agreements, we will protect the National Health Service (NHS). Our objectives reinforce this. The NHS will not be on the table. The price the NHS pays for drugs will not be on the table. The services the NHS provides will not be on the table. The NHS is not, and never will be, for sale to the private sector, whether overseas or domestic.
Any agreement will ensure high standards and protections for consumers and workers, and will not compromise on our high environmental protection, animal welfare and food standards. The Outline Approach published in Chapter 2 sets out the UK’s overall objectives for these negotiations, enabling us to begin substantive discussions with the US.
These objectives are also informed by one of the biggest consultations ever undertaken with the UK public, businesses and civil society, covering trade with the US, Australia, New Zealand, and our potential accession to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP). Our response to the US part of this consultation can be found in Chapter 3.
The US is the world’s largest economy, our closest security and defence partner and one of our oldest friends. We are the biggest investors in each other’s economies. We have worked together, from the Bretton Woods Conference to the UN Security Council, to shape the world order since the Second World War. An FTA represents a strategic opportunity to augment and codify our strong trade, investment and economic relationships, bringing us closer to our largest bilateral trading partner and the world’s economic powerhouse.
This agreement should support the further development of a close defence industrial partnership between the UK and the US in the defence sector, recognising that we are already each other’s most important suppliers of imported defence equipment, and that this relationship both supports jobs and investment, and delivers world class capabilities to our armed forces as they fight together in defence of our national interests.
The agreement should reduce barriers to defence sales, in particular by encouraging deeper and faster sharing of technology, and encourage investment in each other’s industrial base.
UK_US_FTA_negotiationsTo view the full report, click here.