This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h1531c.COM
DATE: 2/17/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HM 1531 Free Trade Agreement Between the United States and the United Kingdom
SPONSOR(S): Barnaby
TIED BILLS: IDEN./SIM. BILLS: CS/SM 174
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Tourism, Infrastructure & Energy Subcommittee 14 Y, 0 N Neuffer Keating
2) Commerce Committee 20 Y, 0 N Neuffer Hamon
SUMMARY ANALYSIS
The United Kingdom (UK) officially left the European Union (EU) Single Market and Customs Union on January
31, 2020.
Effective on its official departure from the EU, any EU trade agreements, including trade agreements with the
United States (US), no longer applied to the UK. Three separate trade agreements were reached between the
UK and EU prior to the UK’s official exit from the EU.
As the sixth-largest economy in the world and a major financial center, the UK maintains a vital role in assuring
economic stability across the globe. On December 31, 2020, the US and UK entered into the US-UK Trade
and Investment Working Group to ensure no disruption to trade for specific products resulted from Brexit.
Since its decision to leave the EU, the UK has conducted negotiations with the US in an effort to form new,
broader free trade agreements, but negotiations have not been completed.
The US-UK bilateral investment relationship is the largest in the world. In 2019, the US foreign direct
investment (FDI) in the UK was $851.4 billion, and the UK FDI in the US was $505.1 billion. More than 1.27
million Americans are employed by UK-owned firms based in the US. In 2019, US exports of goods and
services to the UK was worth $147.4 billion, and imports of goods and services from the UK was worth $125.6
billion. In 2018, 67,800 citizens of Florida were employed by UK subsidiaries. The UK ranked as the third
largest export market for Florida, with a total value of goods and services exports in 2019 of $5.4 billion.
The memorial urges the Congress of the United States to reenact Trade Promotion Authority laws to guide the
executive branch in pursuing trade agreements. Additionally, it urges the executive branch to complete a timely
and successful free trade negotiation with the UK for Congress to ratify.
Legislative memorials are not subject to the Governor’s veto power and are not presented to the Governor for
review. Memorials have no force of law, as they are mechanisms for formally petitioning the federal
government to act on a particular subject.
This memorial does not have a fiscal impact on state or local governments. STORAGE NAME: h1531c.COM PAGE: 2
DATE: 2/17/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Present Situation
Current Trade Situation
On June 23, 2016, the United Kingdom (UK) held a referendum on the issue of whether to leave the
European Union (EU), which received support from 51.89% of the voters.
1
This referendum would later
become known as Brexit.
2
The UK officially left the EU Single Market and Customs Union on January
31, 2020.
3
Effective on its official departure from the EU, any EU trade agreements, including trade agreements
with the US, no longer applied to the UK. Three separate trade agreements were reached between the
UK and EU prior to the UK’s official exit from the EU.
As the sixth-largest economy in the world and a major financial center, the UK maintains a vital role in
assuring economic stability across the globe. The instability caused by Brexit meant the UK sought to
reinforce its close ties with the United States (US).
4
On December 31, 2020, the US and UK entered
into the US-UK Trade and Investment Working Group to ensure Brexit did not disturb the trade of
specific products.
5
Since its decision to leave the EU, the UK has conducted negotiations with the US in
an effort to form new, broader, free trade agreements. As the US and UK entered trade agreement
negotiations, Congress expressed its awareness of the implications the UK’s withdrawal from the EU
will mean for the global economy, trade relations, and other political and security issues.
6
That
recognized, the US has expressed grave concern over the impact the 2020 Brexit treaty could have on
the Belfast Agreement, commonly known as the Good Friday Agreement.
The Belfast Agreement was signed on April 10, 1998. It led to the establishment of a system of
government in Northern Ireland and related institutions.
7
The agreement created a political framework
for Northern Ireland centered on power-sharing between competing groups.
8
Of importance was the
confirmation that Northern Ireland was part of the UK, but a stipulation set forth that Ireland could be
united only if supported by a vote in both Northern Ireland and the Republic of Ireland.
9
When the UK
voted to leave the EU, the border between Northern Ireland and the Republic of Ireland caused
concern. Since the Belfast Agreement, the border between these two countries, which was once
heavily militarized, has become almost invisible. Following Brexit, an agreement was reached between
1
See Government of the Netherlands, Questions and Answers on Brexit,
https://www.government.nl/topics/brexit/question-and-answer/what-is-brexit (last visited January 28, 2022).
2
See Id. (explaining the term is a combination of ‘Britain’ and ‘exit’).
3
See Alasdair Sanford, Post-Brexit Guide: Where Are We Now – And How Did We Get Here?, Euronews (January 17,
2022), https://www.euronews.com/2021/06/23/brexit-draft-deal-first-of-many-hurdles-to-a-smooth-exit (last visited January
28, 2022).
4
Congressional Research Service, The United Kingdom: Background, Brexit, and Relations with the United States
(updated April 1, 2021).
5
See Office of the United States Trade Representative, U.S.-UK Trade Agreement Negotiations,
https://ustr.gov/countries-regions/europe-middle-east/europe/united-kingdom/us-uk-trade-agreement-negotiations (last
visited January 28, 2022).
6
Id.
7
See Citizens Information, The Good Friday Agreement, March 31, 2021,
https://www.citizensinformation.ie/en/government_in_ireland/ireland_and_the_uk/good_friday_agreement.html (last visited
January 25, 2022).
8
See Charles Landow and James McBride, Moving Past the Troubles: The Future of Northern Ireland Peace, Council on
Foreign Relations, April 23, 2021, https://www.cfr.org/backgrounder/moving-past-troubles-future-northern-ireland-peace
(last visited January 25, 2022).
9
Id. STORAGE NAME: h1531c.COM PAGE: 3
DATE: 2/17/2022
the EU and UK to avoid the reappearance of a hard border.
10
Stipulated in the agreement, there would
be no new check on goods crossing the border between Northern Ireland and the Republic of Ireland.
11
The current US administration has made clear that a trade deal with the UK will only be considered if
Brexit does not undermine the Belfast Agreement.
12
Additional sticking points of the trade agreement
negotiations include the tariffs on steel and aluminum imposed during the previous US administration,
as well as the UK’s regulations on chicken washed in chlorine.
13
US Trade Relations with the UK
The US-UK bilateral investment relationship is one of the largest in the world. In 2019, US foreign direct
investment (FDI) in the UK was $851.4 billion
14
, and UK FDI in the US was $505.1 billion.
15
More than
1.27 million Americans are employed by UK-owned firms based in the US.
16
In 2019, US exports of
goods and services to the UK was worth $147.4 billion
17
, and imports of goods and services from the
UK was worth $125.6 billion.
18
In 2018, 67,800 citizens of Florida were employed by UK subsidiaries.
19
The UK ranked as the third
largest export market for Florida, with a total value of exports of goods and services in 2019 reaching
$5.4 billion.
20
Trade Promotion Authority
The President of the US has the authority to negotiate treaties with foreign countries, but Congress has
the sole authority to regulate international trade.
21
Trade Promotion Authority (TPA) is a time-limited
authority that Congress may use to establish trade negotiating objectives, notification and consultation
requirements, and procedures to consider when implementing legislation for certain reciprocal trade
agreements.
22
TPA does not provide new power to the executive branch, but is a legislative procedure
written by Congress, though which it defines US negotiating objectives and sets forth a detailed
oversight and consultation process to be followed during trade negotiations.
23
TPA acts as a fast-track
process made available by Congress to the President for limited periods to enable legislation to
approve and implement certain international trade agreements to be considered under expedited
10
Nidirect, EU Exit and the Northern Ireland Protocol, nidirect government services,
https://www.nidirect.gov.uk/articles/eu-exit-and-northern-ireland-protocol (last visited January 25, 2020).
11
Id.
12
Megan Boyanton, How the Post-Brexit U.S.-U.K. Trade Deal Lost Momentum, The Washington Post, October 14, 2021,
https://www.washingtonpost.com/business/how-thepost-brexit-us-uk-trade-deal-lost-momentum/2021/10/14/8216a67c-
2cc5-11ec-b17d-985c186de338_story.html (last visited January 25, 2022).
13
Id.
14
Office of the United States Trade Representative, United Kingdom, United States Government,
https://ustr.gov/countries-regions/europe-middle-east/europe/united-kingdom (last visited January 28, 2022).
15
Id.
16
United States Department of State, U.S. Relations with United Kingdom, United States Government (February 6, 2020),
https://www.state.gov/u-s-relations-with-united-kingdom/ (last visited January 28, 2022).
17
Office of the United States Trade Representative, supra note 18.
18
Id.
19
Enterprise Florida, United Kingdom, https://www.enterpriseflorida.com/for-international-companies/international-
offices/uk/#:~:text=Florida%2DUK%20Bilateral%20Merchandise%20Trade,-
Both%20the%20United&text=A%20Vital%20Trade%20Relationship%3A%20The,in%202019%20reaching%20%243.5%2
0billion (last visited January 28, 2022).
20
Gov.uk, UK-Florida Trade and Investment Highlights, Government Digital Service (updated June 25, 2021),
https://www.gov.uk/government/publications/uk-florida-trade-and-investment-highlights/uk-florida-trade-and-investment-
highlights (last visited January 28, 2022).
21
U.S. Const. art. 1, § 8.
22
Congressional Research Service, Trade Promotion Authority (TPA), December 14, 2020.
23
Office of the United States Trade Representative, Trade Promotion Authority, United States Government,
https://ustr.gov/trade-topics/trade-promotion-authority (last visited January 28, 2022). STORAGE NAME: h1531c.COM PAGE: 4
DATE: 2/17/2022
legislative procedures.
24
Under TPA, Congress retains the authority to review and decide whether any
proposed US trade agreement will be implemented.
25
The most recent TPA was authorized through July 1, 2021, by the Bipartisan Congressional Trade
Priories Act of 2015.
26
Free Trade Agreements
A Free Trade Agreement (FTA) is an agreement between two or more countries where the signed
parties agree on certain trade obligations for the purpose of reducing barriers to trade.
27
As a result of
reduced barriers, a more stable and transparent trading environment is created for business actors.
The US currently has FTAs with 20 countries, of which the EU and UK are not included.
28
In 2013, the
US and EU attempted negotiations for the Transatlantic Trade and Investment Partnership (TTIP) but
ended in 2016 without conclusion.
29
Effect of the Memorial
The memorial urges:
The Congress of the United States to reenact Trade Promotion Authority laws to guide the
executive branch in pursuing trade agreements
The executive branch to complete a timely and successful free trade negotiation with the UK
The Congress of the United States to ratify the agreement
Copies of the memorial will be sent to the President of the United States, the President of the United
States Senate, the Speaker of the United States House of Representatives, and each member of the
Florida delegation to the United States Congress.
Legislative memorials are not subject to the Governor’s veto power and are not presented to the
Governor for review. Memorials have no force of law, as they are mechanisms for formally petitioning
the federal government to act on a particular subject.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
24
Congressional Research Center, Trade Promotion Authority (TPA): Frequently Asked Questions (updated June 21,
2019).
25
Id.
26
Id.
27
International Trade Administration, Free Trade Agreement Overview, United States Department of Commerce,
https://www.trade.gov/free-trade-agreement-overview (last visited January 28, 2022).
28
Id.
29
European Commission, United States (updated September 6, 2021), https://ec.europa.eu/trade/policy/countries-and-
regions/countries/united-states/#:~:text=Despite%20the%20US%20being%20the,at%20the%20end%20of%202016 . (last
visited January 28, 2022). STORAGE NAME: h1531c.COM PAGE: 5
DATE: 2/17/2022
None.
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
None.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
This memorial does not require or authorize rulemaking.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
Not applicable.