U.K. seeks to trade with US states with broader deal on hold

The U.K. is moving forward on trade engagement with individual American states, and stands ready to resume talks with Washington on a broader federal deal, Secretary of State for International Trade Anne-Marie Trevelyan said.

“One of my ministers, Penny Mordaunt, is presently in California, having exactly those conversations, and she’ll be also visiting Georgia and Tennessee, South Carolina, and Oklahoma,” Trevelyan said Monday in an interview with Romaine Bostick, Sonali Basak and Taylor Riggs on Bloomberg Television.

Trevelyan said she understands why the Biden administration is focused on its domestic agenda rather than pushing forward trade talks begun under the Trump administration, adding that “we stand ready to pick up and continue those negotiations with the team as and when there’s the capacity to do so.”

The frozen talks over a free-trade deal are a headache for Prime Minister Boris Johnson, who has long touted a U.S. deal as one of the great prizes of the Brexit campaign he spearheaded. Proponents of leaving the European Union argued it would allow the U.K. to negotiate more favorable trade terms tailored to its own economy.

As foreign secretary in 2017, Johnson boasted that the U.K. was now “first in line to do a great free-trade deal with the United States.” Four years later, talks on an all-encompassing deal have stalled, and discussions over steel tariffs suggest the U.K. now has a weaker hand post-Brexit. 

The Trump administration imposed a 25% steel tariff, along with a 10% duty on aluminum imports, in March 2018 on a range of nations, using a national-security provision in a 1962 trade law.

The EU in October brokered a deal with the U.S. to ease those tariffs, which had been imposed while the U.K. was still a member of the bloc. With Britain having since completed the divorce, the tariffs remain in place for the U.K. It’s an issue Trevelyan plans to raise with Commerce Secretary Gina Raimondo when they meet later this week, their first in-person interaction.

The U.S. was “clear in October that they want to pick up and have that conversation now,” Trevelyan said, adding that it was natural to have resolved the dispute with the EU first, because the bloc is a larger exporter of steel to the U.S. than is Britain.

“The EU steel was a much bigger impact for the U.S., so if I was the U.S., I’d be having that conversation too,” she said.

Trevelyan said Mordaunt’s discussions with state officials will include issues such as easing barriers around the recognition of professional qualifications in order to boost the trade in services, and also how to gain more access for U.K. businesses to state-level procurement. By building relations at state level, she said, the U.K. will also help ease the approval  process for any eventual federal-level free trade agreement.

“When we get to that point and the U.S. is asking for approval of the FTA that we finalize, it will require the support and the voice of all those states,” Trevelyan said. “So we can do a lot of the work now and build those relationships and make sure that businesses are really pushing from your side on the U.S. side to make sure that we see the package that we want.”