Oral Testimony for USITC Public Hearing on U.S.-UK Trade Relations and the Probable Economic Effect of Providing Duty-Free Treatment for Currently Dutiable Imports
"The American Chemistry Council (ACC) appreciates the opportunity to testify today on the U.S. chemical industry’s priorities for potential trade negotiations between the United States and the United Kingdom (UK). Our testimony assumes that the UK will be able to negotiate its own trade agreements upon leaving the European Union (EU). It also assumes that the UK’s average tariff rate for chemicals is 3 percent, which is similar to the average tariff rate for chemicals for the EU. Trade in chemicals is a strong feature of the U.S.-UK trading relationship, totaling $5.7 billion in two-way trade in 2017. U.S. exports of chemicals to the UK account for approximately $2.8 billion, and U.S. imports of chemicals from the UK account for the other $2.9 billion. 54 percent of chemical imports from the UK, and 39 percent of chemical exports to the UK, are between related parties. The significant volume of trade between related parties is due to the highly integrated and efficient nature of the U.S. and UK chemical manufacturing supply chains. ACC and its members believe a U.S.-UK trade agreement would achieve concrete and tangible outcomes for chemicals manufacturers in both markets. To that end, we are pleased to share with you today an overview of our recommendations and objectives for a successful trade agreement with the United Kingdom.
1. Tariff Elimination and Market Access: ACC recommends that the U.S. and UK eliminate their respective chemicals tariffs under Harmonized System Chapters 28-40 without any transition periods or staging of tariff reductions. According to ACC analysis, a trade agreement that eliminates U.S. tariffs on chemical imports from the UK could save U.S. chemical manufacturers $88 million per year. Eliminating UK tariffs on chemical imports from the U.S. would reduce tariffs paid in the UK by $84 million. The cost savings from these tariff eliminations would help boost economic and job growth."