6th Report - The UK-US economic relationship: 250 years on

The government's response

What the committee recommended 17

1. 1
   US tariffs are now a structural feature of the trading environment and will persist. Conclusion
2. 2
   The UK Government has responded to US tariff policy as fast as a volatile environment... Conclusion
3. 3
   The Government should publish one consolidated, regularly updated “business-facing” guidance source for the EPD, the... Recommendation
4. 4
   The urgency of the Government’s responsible business conduct review has been underlined by the new... Recommendation
5. 5
   The Government should report to the Committee on the outcome of the DBT responsible business... Recommendation

See all 17 recommendations and conclusions

Sources

• 6th Report - The UK-US economic relationship: 250 years on ↗The committee's report, HC 127, parliament.uk

Recommendations and conclusions 17

1. 1
   US tariffs are now a structural feature of the trading environment and will persist. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

   US tariffs are now a structural feature of the trading environment and will persist. In our conversations with allies around the world, few expect tariffs to return to their prior levels after the next US Presidential election. The UK’s effective tariff rate is among the lowest in the G7, but this is only a comparative advantage in a worse environment. UK firms continue to report ongoing costs and frictions in navigating the US’s evolving regime and UK goods exports to the US have declined in tariff-exposed categories. The complexity of the regime falls disproportionately on smaller firms least able to absorb its impacts and complexities. (Conclusion, Paragraph 23)
2. 2
   The UK Government has responded to US tariff policy as fast as a volatile environment... Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

   The UK Government has responded to US tariff policy as fast as a volatile environment allows, and has brought welcome stability to some trade terms. However, the agreements remain frameworks with language open to divergent interpretation, and their durability subject to US foreign policy considerations. UK Government guidance has not kept pace with American policy volatility and now UK firms are struggling to lay hands on the information they need, when needed. (Conclusion, Paragraph 24)
3. 3
   The Government should publish one consolidated, regularly updated “business-facing” guidance source for the EPD, the... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   The Government should publish one consolidated, regularly updated “business-facing” guidance source for the EPD, the Technology Prosperity Deal and the Pharmaceutical Arrangement. This guidance should distinguish between the tariff and customs requirements currently in force and what remains under negotiation and should set out the exact steps businesses must take to comply with the rules. (Recommendation, Paragraph 25)
4. 4
   The urgency of the Government’s responsible business conduct review has been underlined by the new... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   The urgency of the Government’s responsible business conduct review has been underlined by the new US tariffs connected with forced labour. We reiterate our previous recommendation that the Government introduce mandatory human rights due diligence legislation and an import ban on goods produced with forced labour, building on the foundations of the Modern Slavery Act 2015. (Recommendation, Paragraph 26) 58
5. 5
   The Government should report to the Committee on the outcome of the DBT responsible business... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   The Government should report to the Committee on the outcome of the DBT responsible business conduct review in response to this Report. (Recommendation, Paragraph 27)
6. 6
   By implementing UK-US trade commitments through non-binding agreements and secondary legislation, the UK Government is... Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

   By implementing UK-US trade commitments through non-binding agreements and secondary legislation, the UK Government is conducting trade policy in a way that limits opportunities for parliamentary scrutiny. The Secretary of State suggested that Members would have the chance to scrutinise the EPD when presented to the House, but no date for this has been set. Furthermore, the use of secondary legislation has been rushed and lacked transparency. (Conclusion, Paragraph 31)
7. 7
   The Government should honour its commitments to the House and ensure the EPD and the... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   The Government should honour its commitments to the House and ensure the EPD and the recent UK-US agreements are presented properly to the House for scrutiny. If it cannot do this, the Government should explain how parliamentary scrutiny will be assured for each agreement as implementation proceeds through secondary legislation. (Recommendation, Paragraph 32)
8. 8
   The Government should publish impact assessments for the US agreements already concluded, including the Pharmaceutical... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

   The Government should publish impact assessments for the US agreements already concluded, including the Pharmaceutical Arrangement, without further delay. It should further ensure that all future economic agreements with the US are accompanied by a timely impact assessment. (Recommendation, Paragraph 33) Implementing the Economic Prosperity Deal
9. 9
   One year on, the Economic Prosperity Deal has delivered mixed results. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

   One year on, the Economic Prosperity Deal has delivered mixed results. Sector specific tariff mitigations in aerospace, automotive, beef, lumber and timber, pharmaceuticals and whisky show that negotiated outcomes are achievable even in a challenging US trade policy environment. However, progress on three cross cutting issues - non-tariff barriers, digital trade, and economic security - remain aspirational. As a non-binding framework, the Deal has also not delivered durable protection against shape-shifting future US tariffs. (Conclusion, Paragraph 50)
10. 10
    The Government should build on the existing achievements in the EPD and pursue four priorities:... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    The Government should build on the existing achievements in the EPD and pursue four priorities: • cut the baseline tariff, using our recommended forced-labour legislation as grounds to argue the UK’s rate down; • secure, as a minimum, an operational most favoured nation rate steel quota, including derivative products, that is stable, transparent, and commercially usable; 59 • prioritise further work where the UK and US have common interests in economic security, mutual recognition agreements, and digital trade facilitation (such as paperless and pre-arrival processing), while protecting the UK’s regulatory freedom; and • improve predictability by converting opaque non-binding commitments into operational arrangements with published progress and UK policy objectives. Where the Government cannot yet set out clear operational arrangements for UK-US trade, it should set out in response to this Report what is preventing it, and when this will change. (Recommendation, Paragraph 51) Technology Prosperity Deal
11. 11
    The TPD is a framework for deepening bilateral cooperation in strategic technologies. Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    The TPD is a framework for deepening bilateral cooperation in strategic technologies. It played a useful role in signalling political commitment, but it was suspended before it could produce substantive outcomes. (Conclusion, Paragraph 60)
12. 12
    The investments announced during the State Visit were correlated to the Technology Prosperity Deal, not... Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    The investments announced during the State Visit were correlated to the Technology Prosperity Deal, not caused by it. Investors were clear that their decisions rested on the UK’s fundamentals: strong underlying demand for AI infrastructure, the UK’s strong rule of law tradition, and deep capital markets. (Conclusion, Paragraph 67)
13. 13
    To improve investment into the UK, the Government should focus on the factor conditions rather... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    To improve investment into the UK, the Government should focus on the factor conditions rather than government-to-government deals. These are competitive energy costs, faster grid connections, expeditious planning processes, and governance simplicity for investors. We reiterate the recommendations in our recent report on Investing in the UK economy. (Recommendation, Paragraph 68)
14. 14
    The Government must preserve the UK’s freedom to regulate AI, digital services taxes, and online... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    The Government must preserve the UK’s freedom to regulate AI, digital services taxes, and online safety in the national interest. The UK should not trade away these regulatory freedoms in pursuit of resuming the TPD. (Recommendation, Paragraph 69) Arrangement on Pharmaceutical Pricing
15. 15
    The Pharmaceutical Arrangement was a necessary response to an acute tariff threat to £4 billion... Conclusion · addressed to Department for Business and Trade Conclusion (the committee's words)

    The Pharmaceutical Arrangement was a necessary response to an acute tariff threat to £4 billion of UK exports. However, the cost to the NHS is material, contested, and opaque. Whether increased NHS spending translates into increased UK R&D investment, remains the critical unresolved question. (Conclusion, Paragraph 80) 60
16. 16
    The Government should publish a roadmap for the Pharmaceutical Arrangement and evaluate outcomes of this... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    The Government should publish a roadmap for the Pharmaceutical Arrangement and evaluate outcomes of this agreement against metrics in real time. Further spending should be dependent upon evidence of increased access to medicines, improved health outcomes and greater R&D investment in the UK. (Recommendation, Paragraph 81)
17. 17
    If the Government cannot publish the Impact Assessment for the Pharmaceutical Arrangement, it should publish... Recommendation · addressed to Department for Business and Trade Recommendation (the committee's words)

    If the Government cannot publish the Impact Assessment for the Pharmaceutical Arrangement, it should publish its evidence that accelerating spend on innovative medicines will increase investment in the UK. (Recommendation, Paragraph 82) 61