Articles

Transatlantic Business Leaders Welcome Prime Minister Theresa May’s Commitment to a Period of Implementation After Brexit

LONDON, Friday 22 September
BritishAmerican Business (BAB) welcomes Prime Minister Theresa May’s speech in Florence, stating, however, that on Brexit there is still a long way to go for businesses to feel the clarity they need.

Speaking on the Prime Minister’s remarks, Wendy Mendenhall, BAB Global Executive in Charge, said:
“The transatlantic business community welcomed today’s speech by the UK Prime Minister in Florence, Italy, which emphasized the UK’s commitment to address global challenges and its willingness to build on the foundations the UK laid within a successful EU”.

“In particular, our business community welcomes the announcement that the UK will seek to establish a period of implementation after Brexit. Minimizing disruption to business through an agreed transition period, therefore avoiding a ‘cliff-edge’ scenario, was and continues to be crucial to our community, which includes major American investors and leading British firms”.

“Our community will continue to advocate for an outcome that best serves both the UK, US, and the EU economies, its citizens and our businesses; many who operate daily across borders”.

“As businesses continue to assess the impact of Brexit to the UK’s attractiveness as a destination for business and investment, it is crucial that both parties continue to engage in a constructive and on-going dialogue with the business community and deliver the best possible Brexit outcome available.

BABA Policy Statement on UK Position Paper on Customs Arrangements

The British-American Business Association welcomes the UK Government’s proposals for a future customs relationship with the EU as well as its aim to explore a model for an interim period that offers frictionless trade across the borders and helps avoid a “cliff edge scenario”.

Minimizing any disruption to business through an agreed transition period and providing clarity on the future trading relationship with the EU as early as possible have been a key ask by the transatlantic business community, which includes major American investors and leading British firms.

Both options presented, however, are still likely to increase the burden for businesses who trade between the UK and the EU. We therefore continue to advocate for a model that is as close as possible to existing arrangements. This will be essential in maintaining the United Kingdom’s status as a desired trade and investment partner.

Our businesses are looking forward to continuing its strong engagement with the UK Government on achieving this aim.

New Trade Report Highlights UK Trade Links with All 435 US Congressional Districts

WASHINGTON, DC - On Tuesday 25 July, alongside Members of Congress and the business community, the UK’s Secretary of State for International Trade, the Right Honourable Liam Fox MP launched the UK Trade and Investment Highlights in the 435 US Congressional Districts report.

The report released today outlines the economic benefits of trade and investment between the United Kingdom and each of the 435 US Congressional Districts.

Please find a link to the report here.

UK’s Secretary of State for International Trade and President of the Board of Trade, The Right Honourable Dr Liam Fox MP, said:

“It’s fantastic to be back in Washington for the first meeting of the UK-US working group with Ambassador Robert Lighthizer and launch this new report which highlights the strong trading and investment relationship between the United Kingdom and each of the 435 Congressional Districts in the United States.

“The group will work to provide certainty for businesses as the UK leaves the EU and look to expand future trading links with the US. The EU itself estimates that 90 per cent of global growth in the next decade will come from outside Europe, and I believe as the head of an international economic department that this is an exciting opportunity for the UK to work even more closely with our largest single trading partner - the US.”

The report highlights that in the US 707,100 jobs were supported by exports to the UK in 2015, growing prosperity on both sides of the pond. This report complements a previous study that showed the strong trading relationship between each state and the UK, available here.

Top Figures from the report include:

  • The UK is the top export market for 15 US Congressional Districts
  • The UK is among the top 3 export markets for 129 US Congressional Districts (30 percent)
  • The UK is among the top 5 export markets for 302 of the US Congressional Districts (69 percent)

Goods or Services Export Values:

  • 168 US Congressional Districts exported $100 million or more in goods to the UK in 2015, including 4 Districts that exported over $1 billion (39 percent)
  • 201 US Congressional Districts exported $100 million or more in services to the UK in 2015, including 4 Districts that exported over $1 billion (46 percent)

Supporting Jobs:

  • At least 1,000 jobs were supported by exports to the UK from 291 US Congressional Districts in 2015 (67 percent), with 5,000 or more jobs supported by exports to the UK from 13 US Congressional Districts

Trade between the UK and US is already worth more than $200 billion a year.  The US is the single biggest source of inward investment into the UK, and together we invest $1 trillion in each other’s economies.

As of April this year, corporation tax has fallen to 19%, the lowest rate in the G20. In April of 2019, it will fall again to 18%, before a further reduction to 17% in 2020. A Price Waterhouse Coopers report, published in February, states that Britain will have the fastest growing economy out of the G7 nations until 2050 and the UK economy is expected to outstrip Germany, France and Italy for the next 33 years - notching up annual average growth of 1.9%. The UK is a great place to do business, learn more from the Department for International Trade.

Notes to Editor:

The UK Trade and Investment Highlights in the 435 US Congressional Districts report outlines the following topics and more: 

  • The number of US jobs supported by each District’s exports to the UK
  • The goods exported to the UK by each District
  • The services exported to the UK by each District
  • The estimated number of UK subsidiaries in each District
  • The top five goods and services exported to the UK and UK-affiliated companies located in each District

Methodology

This report provides a breakdown of each state’s goods and services exports to the United Kingdom, estimated U.S. jobs tied to those exports, and information on foreign direct investment (FDI) in each state based on data supplied by The Trade Partnership, an economic research firm in Washington, DC.

State export data come from The Trade Partnership’s CDxports database.  The Trade Partnership derives goods exports based primarily on data from the U.S. Census Bureau, the U.S. Department of Agriculture (USDA), and Moody’s Analytics. Goods exports are classified according to the U.S. government’s North American Industry Classification (NAICS) system. The Trade Partnership derives services exports primarily from data from the U.S. Bureau of Economic Analysis (BEA) and Moody’s Analytics. Services exports are classified according to the BEA categories. Jobs tied to exports are based on the above sources along with data from the U.S. Department of Labor. A detailed methodology for the CDxports database is available at http://tradepartnership.com/data/cdxports-and-cdxjobs/.

FDI-related information comes from the Uniworld Online database and the U.S. Bureau of Economic Analysis (BEA). Data on the number of subsidiaries of U.K.-based firms, along with examples of specific companies operating in the state, are derived from the Uniworld database. Estimates of employment by UK subsidiaries come from the BEA. 

BABA Welcomes Joint Release of Investment Working Group

British-American Business Association, Washington, DC, welcomed the joint release by the Secretary of State, The Rt Hon Dr Liam Fox MP, and the US Trade Representative, Robert Lighthizer, at the culmination of the first plenary session of the UK-US Trade and Investment Working Group which took place in Washington DC this week.

BABA, Washington, as part of the wider BABC network, fully supports the Working Group’s objective to explore options of future economic integration between the UK and US. As the UK prepares to leave the EU, making it a priority to give certainty and confidence to business and minimising disruption through a focus on providing commercial continuity for US and UK businesses is highly welcome by our membership.

We as a transatlantic business community stand ready to support US and UK Governments in this important process to a mutual benefit of our great nations.

Enhancing US-UK Trade and Economic Prosperity in a Time of Change

Founded three decades ago in Washington, DC, the British-American Business Association (BABA) is the premier business forum for British and American companies, organizations and business professionals in the mid-Atlantic region. Drawing from their transatlantic experience, BABA members share valuable insights around business in the US and UK, and pursue mutual policy interests. From airlines, aerospace and technology firms, to banks and hotels, BABA's membership reflects a full range of British and American businesses.

Therefore, BABA is committed to strengthening the US-UK economic relationship and is encouraged by President Trump and Prime Minister May’s support for bilateral trade discussions. Since the signing of the US-Great Britain “Friendship, Commerce and Navigation Treaty” following the War of 1812, the US and UK have enjoyed an enduring economic partnership. Today, our nations share the pole position in cutting-edge industries like automotive, finance, pharmaceuticals and information technology. Building on the strength of our existing partnership and our shared political and cultural heritage, deeper trade ties would underscore and encourage US and UK leadership in innovative industries and open the door for world-leading, rules-based trade relations that are purpose-built for the 21st Century.

While we fully recognize that the UK cannot sign or complete a new bilateral US-UK trade Agreement until it has exited the EU, we see the following areas as potential priorities for appropriate ongoing discussions and exploratory talks to work towards that goal and to bolster US-UK trade. As Britain seeks to redefine its relationship with Europe, the transatlantic relationship is more vital than ever.

1. Investment
The US and UK are the world’s largest foreign direct investment partners, with an investment relationship valued at over $1 trillion. We support a bilateral commitment to promote open, inclusive and competitive markets as a basis for prosperity between our two countries. As part of this commitment, the UK and the US should develop a new, state-of-the-art investment dispute resolution mechanism addressing, in particular, concerns around transparency and accountability. This should be coupled with efforts to explore incentive schemes for bilateral investment and capital flows, particularly around public-private partnerships and with respect to government procurement opportunities.

2. Regulation
Building on the strength of our cultural and commercial ties, the US and UK should explore areas for further alignment of regulatory processes. This alignment should include norms that ensure balance and proportion between risk and precaution, while supporting innovation-led approaches to deliver better outcomes in, for example, healthcare, consumer safety, food safety, environmental management and emerging technologies.

3. Research and Innovation
The US and UK have world-leading research and innovation institutions that deliver enormous benefits to our economies and citizens. To encourage further cooperation in this area, we recommend the negotiation of a bilateral agreement that builds on the existing Horizon 2020 EU-US Agreement and enables collaboration in science and research. The US and UK should expand cooperation in higher education to amplify the leadership roles of our renowned universities and take full advantage of their great economic potential.

4. Finance
The US and UK are world leaders in financial services: our companies offer deep pools of liquidity and agile product and service structures that share many common features, including an overriding commitment to prudence. Bilateral discussions should commit to enhancing the UK-US financial services relationship – through regulatory cooperation – to improve resilience, augment our strengths and promote economic growth.

5. Talent Mobility
Our shared histories of immigration are directly linked to our nations’ economic success. The ability to attract and employ highly-skilled workers from an international pool of talented professionals is imperative to developing and maintaining strong and competitive industries, especially those facing labor shortages. The US and UK should therefore explore new bilateral visa arrangements to foster the movement of talent and enhance opportunities to live, study and work on either side of the Atlantic.

6. Data
The free flow of data is an essential input to 21st Century economic dynamism. Data is essential in every industry, and especially in the high-value services sectors that support the broader economy and global value chains. Data is increasingly the lifeblood of the manufacturing sector, as the advanced manufacturing processes of the 21st Century will rely on ever-more data to perform complex tasks and produce complicated products. Even the agricultural sector is being transformed by data. Building on progress being made with the EU-US “Privacy Shield” data transfer mechanism, the US and UK should drive pragmatic new solutions that protect citizens’ privacy while allowing for the free flow of data. Given that global cross-border data flows now generate more economic value than traditional trade in goods, we should blaze an internationally compelling trail for the responsible and sustainable deployment of data-driven technologies.

7. Services
Our economies are world leaders in services and net services exporters. The US and UK should explore ways of enhancing trade in services, particularly in business services such as accountancy and law which, as described above, are crucial inputs for global value chains and support the vitality of other domestic industries. Given the growing importance of data to our economic prosperity we should, in particular, explore ways to further increase competition and encourage growth in the market for ICT services.

8. A Rules-Based System for Trade
In the latter half of the 20th Century, the US and UK led the creation of a sustainable, rules-based system for trade. Rather than pivot away from global leadership, we should reflect on challenges to this order in the 21st Century and explore beneficial, productive means of advancing a positive agenda. The strength of the US and UK’s economic partnership presents an ideal platform for those discussions. In updating our bilateral legal framework for trade, we should also recommend forward-looking priorities for the multilateral agenda, particularly with respect to the World Trade Organization. A first step might be to signal strong mutual support for the Trade in Services Agreement plurilateral negotiations.

9. A New Trade Policy
Over the past year, the public has demonstrated anger and distress around the perceived role that trade has played in increasing economic inequality and stagnating growth. While both of our countries are dependent on trade for our economic success, it is widely accepted that trade generates winners and losers. To address citizens’ legitimate concerns, the US and UK should lead the way in developing socially responsible and growth-enhancing means of dealing with economic dislocation, including dislocation that results from technological transformation. This should be addressed in trade conversations via mutual commitments to strengthening job re-skilling and adjustment assistance programs.

10. Trade Outreach and Consultation
Along with concerns about the impact of trade on the broader economy, critics often highlight concerns around transparency and the closed-door nature of trade negotiations. We acknowledge that trade negotiations rightly take place in strictly intergovernmental settings. However, we also recognize that the mechanisms by which negotiating priorities are established should include the broadest possible set of stakeholders, including key large and small businesses within BABA’s membership. Governments should see consultations not only as a means of receiving input, but also as a forum for educating citizens about the value of trade and the substance of trade commitments.

July 10th 2017
NOTE: This policy paper was developed in conjunction with British American Business – https://www.babinc.org/.