It looks increasingly unlikely that American and British negotiators will finalize a U.S.-U.K. trade agreement this year. When asked whether a deal could be struck by the end of 2020, one U.K. official recently responded, "Basically, no."
No one likes to wait. But if holding out for another year leads to a better deal, then that's certainly the right approach. Our two countries have the potential to strike a top-notch agreement that sets the standard for future international trade pacts and puts the rest of the world on notice. Negotiators would be wise to use this extra time to secure state-of-the-art intellectual property and market access protections for American innovators.
The United States and the United Kingdom are two of the largest economies in the world, and the lifeblood of the international trade ecosystem. In 2019, the United States traded nearly $6 trillion U.S. dollar (USD) worth of goods and services with foreign nations, while the U.K. exchanged more than $1.8 trillion USD worth of the same wares. Given their dominance on the global economic stage, they can deliver the most ambitious bilateral trade deal in modern history.
The robust trade relationship between the United States and the United Kingdom certainly reinforces the prospect of that. In 2018, the latest year for which data is available, U.S. goods and services trade with the U.K. eclipsed $261 billion. America is the single largest investor in the U.K. And fittingly, our British allies are also the largest investor in the United States.
American workers, businesses, and consumers benefit tremendously from U.S.-U.K. trade. Consider that British companies operating in the United States employ over 1.25 million Americans in high-paying sectors like manufacturing, technology, pharmaceuticals and more. And U.S. goods and services exports to the U.K. support more than 665,000 American jobs.
Still, this relationship has room to grow—especially when it comes to intellectual property protections.
Take the U.S. biopharmaceutical sector, which employs over four million Americans. Our innovation ecosystem produces more than half of the entire world's new medicines, helping people across the globe live longer and healthier lives.
But it's no simple feat. Bringing just one new drug through the development pipeline to patients typically costs billions of dollars and takes more than a decade. Even when biopharmaceutical companies commit to this investment, less than 12 percent of the medicines that enter clinical trials secure FDA approval.
The United Kingdom unfairly punishes U.S. drug companies with price controls on these expensive, cutting-edge medicines. This makes it even harder for American innovators to recoup R&D costs, which discourages them from future drug investments.
Especially now, in the new reality ushered in by the coronavirus, we cannot afford any disincentives against biomedical innovation. That's why U.S. trade negotiators must do all they can to ensure that the U.S.-U.K. trade deal prioritizes American scientists and medicine manufacturers.
The new U.S.-U.K. deal must also include 21st-century protections for America's creative industries. Rampant online piracy in the United Kingdom robs American recording artists, producers and film and television creators of hard-earned compensation.
In 2018 alone, the United Kingdom saw nearly six billion visits to pirated websites. And just this spring—during the coronavirus-induced quarantine—traffic to pirated film sites increased by nearly 60 percent compared to visits earlier in the winter. A robust U.S.-U.K. trade deal must include provisions that address this blatant disregard for American innovation.
Consider also America's software industry. This sector, which supports more than 10 million jobs across all U.S. states, relies on cross-border data transfers—the digital transfer of information between servers in different countries.
Since the majority of the world's population lives outside the United States, our national competitiveness will depend on strong safeguards for cross-border data transfers. It's imperative for the United States and the U.K. to put robust protections in place to remove costly barriers for digital businesses overseas.
Amid the coronavirus pandemic, a U.S.-U.K. agreement replete with strong intellectual property protections would provide our nation some much-needed economic security.
Forty-five million Americans' livelihoods depend on IP-intensive sectors—from tech to manufacturing, music to movies and even agriculture to chemical production. In total, America's IP is worth at least $6.6 trillion.
It's disappointing that the U.S. and U.K. officials have yet to reach a comprehensive trade agreement. But if we have to wait, let's use that time to hammer out the best deal possible—one that serves as a gold standard for all future trade agreements.
Erik Paulsen represented Minnesota in the U.S. House of Representatives from 2009 to 2019.
The views expressed in this article are the writer's own.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
