U.S. working closely with UK on trade challenges -USTR’s Tai

By Andrea Shalal

WASHINGTON (Reuters) -U.S. Trade Representative Katherine Tai said negotiations about a free-trade agreement with Britain launched by her predecessor had been paused, but the two allies continue to work “very closely” on challenges such as non-market economic pressures and the global COVID-19 pandemic.

Tai told an event hosted by the U.S. Chamber of Commerce that the two allies had “a lot of accomplishments to claim over the course of this year” including joint work on supply chain issues and digital principles, and ensuring enforcement of bans on the use of forced labor.

“We will continue to build on this relationship,” she said.

Tai and Commerce Secretary Gina Raimondo met this week with British trade minister Anne-Marie Trevelyan, who has raised the prospect of new retaliatory measures unless progress is made on removing U.S. tariffs on steel and aluminum.

Britain, which exited the European Union on Jan. 31, 2020, is keen to join a U.S.-EU pact struck in October that allows duty-free entry for “limited volumes” of EU-produced metals into the United States, while retaining U.S. “Section 232” tariffs of 25% on steel and 10% on aluminum more broadly.

UK officials say British firms will face increased pressure from Jan. 1, when tariffs on EU goods drop as a result of the US-EU deal. The EU dropped retaliatory tariffs against the United States after the EU deal with Washington.

Tai told the Chamber event said Washington was still recalibrating ties with Britain after its split from the EU, but the allies shared valued, systems and language.

“You know, maybe we all have this experience in life. When you have friends who are couples and they split up right? You have to realign your relationships a little bit,” she said.

She added that she wanted to respect the “highly specific” dynamics around Brexit.

Tai said U.S.-EU agreements on aircraft subsidies and steel and aluminum over the past year had removed or averted the imposition of over $20 billion in tariffs.

“We have taken significant steps to transform the nature of the tone of our relationship with Europe,” she said, adding, “And … we’ve done it without stepping back or being soft on defending our economic rights.”

Tai said there was more work to do on support for the two blocs’ respective aircraft industries and protecting their markets from unfair trade, but the new framework would allow them to better manage issues going forward.

(Reporting by Andrea Shalal; editing by Diane Craft)