A new free trade agreement between the UK and the US will offer huge benefits to Liverpool city region SMEs, a senior Government trade official has said.
Addressing an audience of members of trade body Mersey Maritime in a webinar, Antony Phillipson, British Consul General in New York and Her Majesty’s Trade Commissioner for North America, said SMEs accounted for 80% of UK exports to the US.
Mr Phillipson said the UK Government remained committed to an “export-led recovery” post-COVID-19 and post-Brexit. He added: “We need to make sure a Free Trade Agreement (FTA) between the UK and the US works for SMEs.
“Small and medium-sized businesses are the lifeblood of our economy and of our export market. They account for 80% of our exports to the UK and we have to make sure the FTA benefits them. This will be a comprehensive deal.”
His comments were welcomed by Mersey Maritime chief executive, Chris Shirling-Rooke, who said: “This is really what we want to hear. SMEs make up the bulk of our membership and we know there is a hunger and desire among them to do more trade with the US.”
The webinar was the second in a series of three online events organised by Western Union Business Solutions in partnership with Mersey Maritime and Maritime UK. In the latest event, David Renta, global head of hedging and head of US corporate at Western Union, offered his view of the challenges and opportunities in the global economy.
Also addressing the webinar was Martin Beck, lead UK economist at Oxford Economics, who talked about the UK economies prospects of recovery from the COVID-19 crisis and the prospects of an FTA with the US.
In his role as the UK’s Trade Commissioner for North America, Mr Phillipson is at the heart of the negotiations with the US on the FTA. He admitted the process was “complicated” but remained optimistic that a deal benefiting both sides was achievable.
He said the services sector would play a major role in a future agreement, especially in terms of technology and financial services. But he emphasised that physical exports would be at the heart of any agreement. He explained: “We remain a trading and exporting nation. It is not like we are starting from a blank piece of paper. Around 20% of our exports have been going to the US for a long time. There is already a highly-engaged economic relationship between the two countries and we are going to add value to that.
“At the heart of all this is business engagement. It is businesses that create jobs and growth and it is businesses that will drive the recovery in the UK, the US and across the world. There is huge political will on both sides for getting a deal done.”
Mr Phillipson referred to a recent report which estimated that the UK could see an annual trade uplift of £15.3bn under a new FTA with the US. He acknowledged that some commentators thought this a modest amount but he added that the benefits of a new and stronger relationship would go way beyond a simple monetary figure.
“Strengthening bilateral ties with the US can only be good for the UK economy,” he explained. “We are setting our sights really high and we want to broaden our engagement at state level. The US is not a single market. Business mobility is also really important. We want to make it easier for people to move back and forth between the US and the UK.”
He added that the UK was also closely watching the difficult relations between the US and China, adding: “A trade war between the US and China would affect us all. We do not want to see a lurch back into protectionism.”
Liverpool city region’s £4.2bn maritime sector is eagerly awaiting an FTA with the US. With Liverpool as the UK’s main westward-facing port an agreement could herald a new era for the city acting as the main trading gateway to the US.
As a leading UK economist, Martin Beck has carried out his own analysis of the potential of the UK-US FTA. And he believes a successful agreement could offer a “decent bang for our buck”.
He said: “I think it is likely the UK will agree a new trade deal with the EU before the Brexit deadline at the end of the year. But I think it is likely to be a ‘bare’ bones agreement. This will be better than a no-deal but it will create new trade barriers.”
Turning to the prospects for a UK-US FTA, he added: “Our exports to the US have remained at around 20% for the past few years while over the same period our exports to the EU have fallen. UK-US trade links are pretty stable. There is a lot of scope for the UK to benefit from an FTA. We speak the same language and we share a lot of the same culture. Those kinds of links are particularly good for the services sector. Also, productivity in the US per worker is around 50% higher than it is in the EU. The dynamism of the US could be good news for UK businesses and there is scope for a big trade expansion between the two countries.”