LONDON, ENGLAND - JANUARY 01: Fireworks light up the London skyline and Big Ben just after midnight ... [+]
Barely 16 months before the next election, the White House has only recently held the first meeting of the President’s Export Council. With little time, lofty goals, and stiff political headwinds, what can this national advisory body on international trade achieve?
There is something tangible and attainable: a free trade agreement with the United Kingdom.
Such an agreement would help the council achieve their goals, as I explain below. Given the U.K.’s Brexit divorce from the European Union, then-Prime Minister Boris Johnson’s government was practically begging for closer U.S. trade relations in the waning months of the Trump administration. But the job was left unfinished by Biden’s predecessor. The current White House should take advantage of this low-risk, high-reward opportunity.
The President’s Export Council serves as the principal national advisory committee on international trade. It was created by executive order in 1973 and has 28 private sector members, all appointed by the president. Today’s council members include business leaders from advanced manufacturing, construction, finance and accounting, banking, airlines, and entertainment and media, among others. Included are a former mayor and the current president of Carnegie Mellon University. They report to the president through Secretary of Commerce Gina Raimondo.
The council’s agenda is digital trade, innovation, and trade facilitation. A US-UK FTA could move all three forward.
The digital economy represented 10.3% of U.S. GDP in 2021, according to the Bureau of Economic Analysis. This sector is broadly made up of software, hardware, e-commerce, and digital services. (10.3% is pretty big; to put this in context, manufacturing was 10.7% in 2021.) Digital trade is outpacing goods trade, especially to countries that have open and competitive services markets, and a U.S.-U.K. FTA would likely boost U.S. services exports.
Innovation is largely a domestic policy affair, but international trade can help. Increasing access abroad for U.S. firms means growing markets, and that growth can spur innovation. Standards, rules and regulations can also make a difference. When our key trading partners share our standards, or at least recognize them, market opportunities for American products grow.
A U.S.-U.K. FTA that helps lock in good standards to the trans-Atlantic economy would open the door for more trade and investment. For example, innovation in advanced manufacturing, agriculture and agricultural biotechnology, digital services, and government contracting areas can be boosted by broadly shared good standards or stifled by the lack thereof. Therefore, mutually recognized standards, rules and regulations should pave the way for more innovation in these areas.
Trade facilitation can mean anything from customs agencies sharing information about goods at the port (which the United States and U.K. already do) to reciprocity for certifications, qualifications and degrees for architects. The mutual benefits are so great that some U.S. states are already moving forward with memorandums of understanding and mutual recognition agreements between U.K. and U.S. architect regulators. A U.S.-U.K. FTA would give all U.S. states the opportunity to take advantage of these export opportunities.
Labor and environment rules that vary significantly across borders are often roadblocks for U.S. trade negotiators. But those roadblocks would be passable with a U.S.-U.K. FTA, because the two nations already share similar labor and environmental rules and goals.
Given the U.K.’s enthusiasm for digging out of their sluggish economic performance and forging new trade ties, U.S. negotiators would have expanded leverage in areas important to the White House and Congress, such as climate goals, other environmental issues, and agriculture.
The U.S. embassy in the U.K. states quite clearly and unapologetically: “The United States has no closer ally than the United Kingdom.”
Councilmembers are chosen for their considerable talent pools and political influence. A U.S.-U.K. FTA may not be at the top of each individual member’s agenda, but together as a group, it is something they could achieve. If each member were to focus on what it would take to get these negotiations underway in their particular area and secure congressional support, an agreement could well be within reach. It would be a memorable accomplishment for the council and the administration.
As Raimondo has said, “It’s on us to show that trade is a good thing and essential thing.” A trade agreement with the United Kingdom is a chance to do just that.
