LONDON—With the U.S. and the United Kingdom entering formal trade negotiations on May 5, chemical industries of the two countries have called for the "full and immediate" elimination of tariffs on chemicals.
As a starting point for negotiations, the WTO Chemical Tariff Harmonization Agreement forms the foundation for trade in chemicals and plastics. The CTHA harmonizes the tariff rates of its participating members at levels ranging from 0 to 6.5 percent.
In a joint statement issued May 11, the U.K. Chemical Industries Association and the American Chemistry Council said they backed "full, immediate tariff elimination for chapters 28-39 of the harmonized system ... without staging of tariff reductions or transition periods."
The chemicals trade between the two countries totaled $5.3 billion in 2019. The U.K. imported $2.8 billion worth of chemicals from the U.S., while the U.S. imports of chemicals from the U.K. stood at $2.5 billion last year.
According to the statement, a trade agreement that eliminates tariffs could save up to $76 million per year for U.S. importers and $84 million for U.K. importers.
The two trade bodies also voiced their support for rules of origin that are "clear, simple, and transparent." This, the statement added, will reduce transaction times and costs to the lowest possible levels.
In addition, the two associations called for regulatory cooperation which would prevent barriers to trade, align regulatory procedures, and create efficiency gains for the supply chain.
A U.K.-U.S. trade agreement, the statement added, will keep existing regulatory regimes concerning chemical substances in place, while opening new avenues for cooperation between regulators.
"A trade agreement between the U.K. and the U.S. will help ensure both countries maintain critical market access during this unprecedented and challenging time," said CIA Chief Executive Steve Elliott.
Also commenting on the agreement, ACC president and CEO Chris Jahn said free trade deals open new markets and maximize speed and efficiency.
"A U.S.-U.K. trade agreement presents an opportunity to leverage the highly integrated and efficient nature of our chemical manufacturing supply chains," Jahn said.