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Further Congressional Calls For US FTA With UK

by Mike Godfrey, Tax-News.com, Washington

05 July 2016


Following the Brexit vote, House of Representatives Speaker Paul Ryan (R – Wisconsin) has called on the US Administration to pursue a free trade agreement (FTA) with the United Kingdom, while a bill has been introduced into the Senate with the same purpose.

Before the Brexit vote, President Barack Obama had said that the UK would be at the "back of the queue" for an FTA, while the US Trade Representative, Michael Froman, has since reiterated that the Administration is not currently considering negotiating a separate FTA with the UK in the near future, stressing that the focus for now is on completing the proposed Transatlantic Trade and Investment Partnership (TTIP) negotiations with the EU.

However, Ryan commented in media interviews in Wisconsin that "we need to emphasize that [the UK is] our indispensable ally, we have a special relationship, and I think that does mean we should have a trade agreement. That is something on which we should begin discussions."

"We would probably want to put together our own trade agreement with [the UK], which would be easier to do actually," he added. "We're in talks with Europe, but I think we should do a parallel track of a UK trade agreement while we talk with Europe about TTIP. Trade with [the UK] is very big between our two countries and very beneficial. I think we should make sure that our trading relationship is stable, so that our respective economies are not affected but actually improved."

In addition, US Senators Mike Lee (R – Utah) and Tom Cotton (R – Arkansas) have introduced the United Kingdom Trade Continuity Act, which would obligate the US President to initiate negotiations for new bilateral agreements with the UK within 30 days after the bill is enacted. Those negotiations would have the goal of reaching a final comprehensive FTA in one year.

The Administration would also have to continue all existing commercial agreements with the UK after Brexit, as if the UK were still part of the EU. In particular, the market access provided to financial institutions based in the US and the UK through passporting rights should be supported by equivalent forms of market access before the UK exits the EU.

"Our nation's special relationship with the UK has promoted economic prosperity and security in both countries for over a hundred years," Lee said. "This relationship can and should be preserved." Cotton added that "the UK has stood with us at the front lines of battle, and it should therefore be at the front of the line for an FTA that benefits both our nations."

According to US official statistics, total trade between the United States and the UK totaled USD114.1bn in 2015, with a USD1.8bn surplus in favor of the former. In comparison, total trade between the United States and the EU totaled almost US700bn last year, but with a USD155bn surplus in favor of the EU. At over 20 percent of the total, the UK is the largest importer of US goods in the EU.

TAGS: tax | free trade agreement (FTA) | law | trade treaty | United Kingdom | agreements | legislation | United States | trade | European Union (EU) | Europe

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