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UK-US Trade and Investment Working Group

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Jeremy Corbyn (Leader of the Labour Party) recently presented a number of documents which cover six rounds of talks between U.S. Trade Representative (USTR) officials and UK officials from the Department of International Trade. These documents detail meetings which were held between July 2017 and July 2019. With all the rhetoric flying around, it’s useful to explore what’s actually been happening with regards to discussions about a future trading relationship with the USA.

The meetings were preparatory meetings ahead of formal trade talks.

The UK-US Trade and Investment Working Group was established in July 2017 by UK Secretary of State for International Trade Dr Liam Fox MP and United States Trade Representative (USTR) Robert Lighthizer.

Since its inception, the Working Group has been laying the groundwork for an ambitious and wide-ranging potential future free trade agreement once the UK has left the EU, as well as ensuring commercial continuity for UK and US businesses, workers, and consumers.

The Working Group delegations were led by officials from the UK Department for International Trade (DIT) and USTR. It also included representatives from a wide range of UK and U.S. Government departments and agencies.

Total trade between the two countries is already worth about £190 billion a year. We are each other’s largest source of foreign direct investment and, according to U.S. statistics, the UK and U.S. have around $1 trillion invested in each other’s economies. Every day around one million Americans go to work for UK firms, while around one million Britons go to work for American firms.

The documents presented by Jeremy Corbyn were posted on reddit around mid-october – it is unclear where the poster obtained them.

These meetings were held during Prime Minister Theresa May’s tenure and while Dr Liam Fox (MP) was Secretary of State for International Trade, running the Department for International Trade (DiT).

The meetings were mentioned in statements released by DiT, but other details do not appear to have been released to the public. The documents made available by Jeremy Corbyn, contain reports on the discussion and outcome of the meetings.

USTR Signs Mutual Recognition Agreements with the United Kingdom

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/february/ustr-signs-mutual-recognition

On February 14, 2019, Deputy U.S. Trade Representative C.J. Mahoney and Ambassador Kim Darroch, United Kingdom (UK) Ambassador to the United States, signed two mutual recognition agreements (MRAs) covering telecom equipment, electro-magnetic compatibility (EMC) for information and communications technology products, pharmaceutical good manufacturing practice (GMP) inspections, and marine equipment.

These MRAs with the UK replicate substantive provisions of existing MRAs between the United States and the European Union for these sectors and will ensure that U.S.-UK trade in these product sectors is not disrupted when the UK leaves the European Union. U.S. exports to the UK of products covered by these agreements exceeded $5 billion in 2018.

Agreement on Mutual Recognition Between the U.S.-UK

Agreement Between the U.S.-UK on the Mutual Recognition of Certificates of Conformity for Marine Equipment

U.S.-UK Agreement on Trade in Wine

USTR Signs Wine and Distilled Spirits Continuity Agreements with the UK

On January 31, 2019, Ambassador Gregg Doud, USTR Chief Agricultural Negotiator, and Ambassador Kim Darroch, United Kingdom (UK) Ambassador to the United States, signed two agreements covering wine and distilled spirits today to ensure there is no disruption in trade of these products between the United States and the UK when the UK leaves the European Union (EU). Currently the United States has agreements on wine and distilled spirits with the European Union which cover trade with the UK by virtue of its membership in the EU.

U.S.-UK Agreement on Trade in Wine

US-UK Agreement on Mutual Recognition of Certain Distilled Spirits/Spirits Drinks

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Other useful links

The UK is preparing for an independent trade policy to implement after EU Exit. This means the UK will have the opportunity to negotiate and enter into trade agreements with other countries.

https://www.gov.uk/government/consultations/trade-with-the-us

These agreements can:

  • enable increased trade and investment
  • secure access for UK exporters to the key markets of today and the future
  • give consumers access to a greater range of products at lower prices
  • make the UK more innovative, competitive and prosperous

The Department for International Trade is preparing for possible negotiations with the US after the UK leaves the EU on 29 March 2019. The UK government is consulting with members of the public, businesses, trade experts, and any other interested organisations to help inform this work.

This agreed consultation will help to inform our overall approach to our future trade relationship and trade negotiations with the US.

An information pack for the Consultation relating to a bilateral Free Trade Agreement between the United Kingdom and the United States

Information Pack UK-US FTA consultation( pdf)

Salzburg Summit – No Deal ?

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An informal meeting of EU leaders was held in Salzburg on 19-20 September 2018 to discuss internal security, migration and Brexit.

It was hosted by Sebastian Kurz, Chancellor of Austria, which currently holds the Presidency of the European Council. Donald Tusk, President of the European council chaired the meeting and together with Jean-Claude Juncker President of the European Commission represented the EU.

Prior to the meeting, Donald Tusk made the following statement on Brexit negotiations:

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The Brexit negotiations are entering their decisive phase. Various scenarios are still possible today, but I would like to stress that some of Prime Minister May’s proposals from Chequers indicate a positive evolution in the UK’s approach as well as a will to minimise the negative effects of Brexit. By this I mean, among other things, the readiness to cooperate closely in the area of security and foreign policy. On other issues, such as the Irish question, or the framework for economic cooperation, the UK’s proposals will need to be reworked and further negotiated. Today there is perhaps more hope, but there is surely less and less time. Therefore, every day that is left, we must use for talks. I would like to finalise them still this autumn. This is why, at tomorrow’s meeting of the twenty-seven, I will propose calling an additional summit around mid-November.
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During dinner on the 19 September, the Prime Minister was graciously allowed 10 minutes to present her plan, agreed by the cabinet and known as the Chequers Deal, to the other 27 EU Leaders. They will not engage directly in negotiations with the PM in order to preserve the role of Michel Barnier as their chief negotiator.

The meeting ended with a working lunch on the 20 September, in an EU27 format to discuss Brexit. This was an opportunity to review progress in the talks with the UK and to discuss the way forward.

Donald Tusk made a statement, at the end of the meeting, during which he included the following comment on Brexit negotiations:

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At our EU27 working lunch today we had a good discussion on Brexit, which once again reconfirmed our full unity. Let me highlight three points.

First, we reconfirmed that there will be no Withdrawal Agreement without a solid, operational and legally binding Irish backstop. And we continue to fully support Michel Barnier in his efforts to find such a model.

Second, we agreed to have a joint political declaration that provides as much clarity as possible on the future relations. Everybody shared the view that while there are positive elements in the Chequers proposal, the suggested framework for economic cooperation will not work. Not least because it risks undermining the Single Market.

Third, we also discussed the timetable for further negotiations. The moment of truth for Brexit negotiations will be the October European Council. In October we expect maximum progress and results in the Brexit talks. Then we will decide whether conditions are there to call an extraordinary summit in November to finalise and formalise the deal.
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Theresa May appealed directly to her European counterparts to drop unacceptable Brexit demands that she warned could rip Britain apart, urging the bloc to respond in kind to her serious and workable plan.

We both agree that there can be no withdrawal agreement with no legally operative backstop. But that backstop cannot divide the UK into two customs territories, and we will be bringing forward our own proposals shortly

So with the rejection by the EU of Theresa May’s Chequers Plan it is now looking more likely for the UK to leave the EU without any agreed plan for the future relationship between the UK and the EU. It would also mean any formal Withdrawal Agreement between the 2 sides which would also be abandoned.

The hardline approach being taken by the EU indicates the desire to punish the UK for leaving in an attempt to dissuade other members from following the same path.

Leader after leader lined up to reject the key elements of the Chequers plan and there appears to have been a coordinated “ambush” on Theresa May by fellow leaders to brief against her at the end of the conference. Donald Tusk even mocking Theresa May with a quip concerning “cherries and cake” on his instagram account.

Transitional Arrangements in the Withdrawal Agreement

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Another position paper issued by the EU on Transitional Arrangements in the Withdrawal Agreement to the EU27. This paper translates into legal terms the principles laid down in the European Council Guidelines of 29 April and 15 December 2017 and in the supplementary negotiating directives annexed the Council Decision of 29 January 2018.

This has been created for approval by the EU27 before it’s presented to the UK. It remans unclear whether this document is to be used as the basis for discussion with the UK or whether, as shown on past experience, it will be presented as a fait accompli

On this basis, this paper outlines in legal terms how such arrangements should be given effect in the Withdrawal Agreement.

Position paper “Transitional Arrangements in the Withdrawal Agreement”

The topics mentioned include:

  • There shall be a transition period, which shall start on the date of entry into force of this Agreement and end on 31 December 2020.
  • Unless otherwise provided in this Part, Union law shall be binding upon and applicable in the United Kingdom during the transition period
  • The United Kingdom shall not participate in any enhanced cooperation
  • During the transition period, the United Kingdom may not become bound by international agreements entered into in its own capacity in the areas of exclusive competence of the Union, unless authorised to do so by the Union
  • During the transition period, the institutions, bodies, offices and agencies of the Union shall have the powers conferred upon them by Union law also in relation to the United Kingdom and natural and legal persons residing or established in the United Kingdom. In particular, the Court of Justice of the European Union shall have jurisdiction as provided for in the Treaties.
  • etc.

Full details are available in the full document at

https://ec.europa.eu/commission/sites/beta-political/files/transition.pdf (pdf)

It is not clear whether the UK can accept not being allowed to sign any International Trade Agreements during this period.

Also, it is worth noting a footnote to the paragraph relating to the role of the European Court of Justice which states:

In addition, the Governance and Dispute Settlement Part of the Withdrawal Agreement should provide for a mechanism allowing the Union to suspend certain benefits deriving for the United Kingdom from participation in the internal market where it considers that referring the matter to the Court of Justice of the European Union would not bring in appropriate time the necessary remedies.

which effectively allows the EU to become Judge, Jury and executioner to matters which they themselves decide break terms of the Withdrawal Agreement.

President Tusk on Brexit

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Donald Tusk, President of the European Council, made the following comments on Brexit during a speech at the Plenary Session of the European Committee of the Regions held on 10 October – State of Union- the view of the regions:

We hear from London that the UK Government is preparing for a “no-deal” scenario.

I would like to say very clearly that the EU is not working on such a scenario.

We are negotiating in good faith and we still hope that the so-called “sufficient progress” will be possible by December.

However, if it turns out that the talks continue at a slow pace, and that sufficient progress hasn’t been reached, then together with our UK friends, we will have to think about where we are heading.

EU – Brexit Negotiation Documents

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The EU will publish all documents, related to negotiations with the UK, which are shared with EU member states.

The EU Commission tweeted on 22 May 2017:

We want full transparency. #Article50 negotiating documents will be released to the public & will be published here.

https://ec.europa.eu/commission/article-50-negotiations-united-kingdom/european-commissions-approach-transparency-article-50-negotiations-united-kingdom_en

https://twitter.com/EU_Commission

The Commission, as European Union negotiator, will ensure a maximum level of transparency during the whole negotiating process.

Commission negotiating documents which are shared with EU Member States, the European Council, the European Parliament, the Council, national parliaments, and the United Kingdom will be released to the public.

Documents wil be provided at

https://ec.europa.eu/commission/publications/article-50-negotiations-united-kingdom_en

Some of the initial documents available are:

Recommendation for a Council Decision authorising the Commission to open negotiations with the UK setting out arrangements for its withdrawal from the EU

https://ec.europa.eu/info/sites/info/files/recommendation-uk-eu-negotiations_3-may-2017_en.pdf

Annex to the Commission recommendation on negotiations with the UK

https://ec.europa.eu/info/sites/info/files/annex-recommendation-uk-eu-negotiations_3-may-2017_en.pdf

European Council (Art. 50) guidelines for Brexit negotiations

http://www.consilium.europa.eu/press-releases-pdf/2017/4/47244658130_en.pdf

Directives for the negotiation of an agreement with the United Kingdom of Great Britain and Northern Ireland setting out the arrangements for its withdrawal from the European Union

http://www.consilium.europa.eu/en/meetings/gac/2017/05/directives-for-the-negotiation-xt21016-ad01re02_en17_pdf/

European Commission receives mandate to begin negotiations with the UK

http://europa.eu/rapid/press-release_IP-17-1405_en.htm

Statement by Michel Barnier at the press conference following the General Affairs Council (Art. 50)

http://europa.eu/rapid/press-release_SPEECH-17-1422_en.htm

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