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4UK-US Trade & Investment
5Working Group
621-22 March 2018
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10Title of Meeting: Opening Plenary
11Date: 21 March 2018
12Time: 9:30 -11:00
13Participants
14Name Department/Directorate
15Oliver Griffiths DIT – UK-US Trade Team
16Katie Waring DIT – UK-US Trade Team
17Sophie Brice DIT – UK-US Trade Team
18Neil Feinson DIT – Goods
19Julian Farrell DIT - Regulatory Environment
20Ada Igboemeka DIT - IP, Procurement, and Sustainability
21Rebecca Fisher-Lamb DIT – Services
22Lola Fadina DIT – Investment
23Rhys Bowen DExEU
24Oliver Wyatt DExEU
25Jaya Choraria HMT Financial Services
26Ceri Morgan DEFRA
27Elizabeth Chatterjee BEIS
28Antony Phillipson HMTC for North America
29Dan Mullaney USTR
30Tim Wedding USTR
31Alexandra Whittaker USTR, Legal Counsel
32Report of Discussions and Outcome
33Dan Mullaney USTR (DM) opened the Plenary by thanking the UK side for their attendance and
34referring to the meeting between UK Secretary of State for International Trade, Liam Fox and US
35Trade Representative Ambassador Lighthizer the previous week. Both had acknowledged the
36good work being done and progress made by the TIWG. They had also agreed that the TIWG
37should continue to look for all opportunities to strengthen the UK-US trade and investment
38relationship now. A joint statement making reference to the TIWG and SME Dialogue had been
39issued following the meeting.
40DM then focussed on “Basket 4” of the TIWG: cooperation on global trade issues. The US looked
41forward to working with the UK on strategic trade issues, particularly as we develop our own
42independent trade policy. The US were especially keen to engage on China and what they see as
43unfair trade practices/ mercantilist behaviour (excess steel/aluminium capacity, non-market
44economy, “China 2025” strategy. On steel/ aluminium, the President’s proclamation imposing
45global tariffs had followed a S.232 investigation by Department for Commerce into the national
46security implications of imports into the US. There was a provision for exemptions for security
47partners as well as product exemptions. Leaders were in touch regarding an EU exemption. The 
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51challenge was a joint one and the US wanted to work with the EU and UK to find ways to address
52global overcapacity [NB: Postscript. On 22 March, the EU received a temporary exemption from
53steel and aluminium tariffs until 1 May]. Other area of concern for the US was IP theft and forced
54technology transfer by China. The report on USTR’s S.301 investigation into these issues would
55issue shortly. Again, the US wanted to work with UK on this joint challenge, but in meantime US
56couldn’t afford not to act unilaterally. Where the US saw issues of inconsistency with WTO rules,
57they would also look at WTO disputes [NB: Postscript. On 22 March, POTUS announced a
58package of measures under the S.301 investigation including, tariffs on $60bn worth of Chinese
59imports, restrictions on Chinese investment into the US and WTO disputes]. On NAFTA,
60negotiations were going full tilt and good progress had been made, including agreement on 3
61substantive chapters. No dates had been announced for future rounds, but there was a desire to
62complete negotiations as quickly as possible. As a final point, DM highlighted that this
63Administration was approaching FTAs differently from other Administrations. It would be good in
64TIWG for leads to discuss the potential differences of approach. The UK/US had a unique
65relationship, so might be able to go further than with others.
66Oliver Griffiths DIT (OG) also acknowledged the success of the TIWG talks so far – there were
67milestones on a journey and the journey was progressing well. The most recent successes were
68the SME Dialogue and the Audit Agreement. We needed to continue to look for ways to build on
69this. There was also lots of contact outside the formal TIWG and the more we could do to thicken
70these discussions the better. This week was a “very live” week for UK in terms of our future
71relationship with the EU, as the March European Council was taking place on Thursday and
72Friday. The UK was starting to think about what our future outside the EU looked like: the policy
73challenges in every sector were not to be under-estimated. OG also agreed on the importance of
74focusing on areas outside an FTA – there were some really high potential ideas on the “STO” list at
75the moment. OG then reiterated the UK position on steel and set out the case for an EU exemption
76– as SoS DIT had set out to Lighthizer the previous week.
77Rhys Bowen, DEXEU (RB) then gave an update on Brexit. The March European Council was a
78major milestone, there would hopefully be agreement on an Implementation Period (IP) and fire the
79starting gun on the UK’s future relationship with the EU. Earlier in the week, the UK’s Brexit
80Secretary, David Davis, and Michel Barnier had agreed to legal text on the terms of an IP, as part
81of wider withdrawal agreement (the whole draft had been published). We were therefore hopeful
82that the IP would be agreed by EU Leaders at MEC – this would provide crucial clarity and
83certainty for Business. In terms of the timing, the UK would leave the EU 29 March 2019. The IP
84would then last for 21 months and expire on 21 December 2020. During this period, the UK would
85continue to benefit from the same level of market access it currently enjoys and the full EU acquis
86would apply. Also during this period, the UK would be able to negotiate, sign and ratify 3rd country
87agreements, which could then come into effect at the end of the IP. The UK would be bound by
88EU law during IP, but this would apply on dynamic basis. There would be some provision for the
89UK to participate in bodies and mechanisms and the details of this were still being discussed (this
90would be on a case by case basis). We would not however attend European Councils.
91International Agreements (IA) were a complex issue. The UK had agreed an approach with the
92EU: IAs were seen as key part of the acquis: it was very difficult to separate the internal and
93external acquis. The UK and EU shared the aim that the UK should be treated as part of existing
94IAs during the IP. To facilitate, the EU would notify all 3rd countries that the UK would continue to
95be bound by IAs during the IP. The UK did however recognise the importance of reaching an
96understanding with all 3rd country partners to ensure they were comfortable with this approach. The
97Modalities of process may however vary by each country. We wanted to work with the US to
98understand whether this approach worked for them. We wanted to make progress quickly, so we
99could provide certainty. The UK and US had been making very good progress on new bilateral 
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103agreements in the TIWG and Economic Working Groups – we wanted to capitalise on that
104progress and we would in any case need to have new agreements in place at end of the IP.
105On the Future Relationship, the hope was that Leaders would sign off Withdrawal Agreement text
106at the European Council, as well as agreeing EU guidelines for negotiations on the next stage: the
107Economic and Security relationships. The draft guidelines were continuing to evolve, but should
108be adopted by the end of the week. The UK position was summarised in the PM’s Mansion House
109speech, where she set out some “hard truths” including, that the UK would not have the same
110market access as we have now and that as this would be a negotiation, we were unlikely to get
111everything we wanted. In terms of detail, the PM had set out the role of goods and services: on
112goods we wanted tariff and quota free deal and frictionless trade with a relatively small number of
113enforcement agencies. The EU guidelines were still high level and there was already some
114common ground, also quite ambitious - they provided a broad starting point for negotiations. On
115timing, the aim was to have political agreement on the future relationship by the October European
116Council: a broad political framework, not a detailed legal text. We would then likely move to the
117legal text agreement after formal departure. The principle on Northern Ireland was that there would
118be no hard border. There would be no agreed text on Northern Ireland at the end of the week. In
119one way, this had pushed the problem to the right, but this allowed the issue to be dealt with as
120part of wider talks on the future relationship (the UK had always seen the two as integral and
121linked). Extending the conversation on Northern Ireland into the next stage meant we were able to
122have those parallel and integrated conversations.
123OG updated the group on the Trade and Customs bills. Both had completed Committee stages in
124the House of Commons and should move to Report stages soon. Future FTAs were not in the
125Trade Bill and as yet, there hadn’t been much pressure around this in Parliament. Most of the
126tension had been on the new Trade Remedies Authority and a potential trade defence regime.
127DM updated the group on Trade Promotion Authority (TPA), which laid out the Administration’s
128objectives in any trade negotiation and detailed consultation mechanisms with Congress. Current
129TPA expired on July 1st 2018 and the President had now requested an extension. Unless subject
130to an extension disapproval by either House, TPA would be extended to July 2021. USTR would
131know by July 1st whether there had been a resolution of disapproval. DM judged TPA was likely to
132be extended on same terms, but that this was not guaranteed. 
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136Title of Meeting: Legal Group
137Date: 21 March 2018
138Time: 11:00 – 13:00 (EDT); 15:00 – 17:00 (GMT)
139Participants
140Name Department/Directorate
141Victoria Donaldson (via VTC) (VJD) DIT Legal
142Michael Bartling (via VTC) (MB) DIT Legal
143Cathy Adams (via VTC) (CA) DExEU Legal
144Colin McIntyre (via VTC) (CM) DExEU Legal
145Rhys Bowen (RB) DExEU
146Ada Igboemeka (AI) DIT – Sustainability (covering anti-corruption)
147Mark Prince (MP) DIT – IP
148Ben Rake (BR) DIT – Services
149Sophie Brice (SB) DIT - UK/US Trade Team
150Russell Stokes (RS) DEFRA Legal
151David Watson (via VTC) (DW) DEFRA Legal
152Gavin Bayliss (GB) BEIS
153Shirley Rhone (via VTC) (SR) HMT
154Jeremy Hill (via VTC) (JH) FCO Legal
155Tim Wedding USTR
156Alexandra Whittaker USTR
157Matthew Jaffe USTR
158Cathy Milton State Department
159Key Points to Note
160The following are the key points from the session:
161• US-concluded FTAs contain a number of common legal chapters and structures which
162negotiating partners should be aware of.
163• Anti-corruption is an aspect in particular where the US considers that they could work
164closely together with the UK.
165• It will be necessary to meet again to discuss further the issues which arise regarding
166Federal and State competence in negotiating and concluding FTAs, and for UK to provide
167sector specific questions to that effect for US colleagues to consider.
168• US colleagues may similarly have questions regarding devolution for UK colleagues to
169consider ahead of any further meeting.
170• Further thinking is necessary on the continuity of the multilateral agreements to which the
171UK will cease to be a party on leaving the EU.
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175Report of Discussions and Outcome
1761. Welcome and Introductions
177
178Introductions
1791.1 US and UK participants introduced themselves as per the participant list above.
180Itinerary
1811.2 The following itinerary was proposed:
1821.2.1 Legal chapters and structures in traditional US FTAs
1831.2.2 Anti-corruption provisions in US FTAs
1841.2.3 Federal and State powers in the context of FTAs
1851.2.4 UK presentation on continuity and implementation period
1861.2.5 US questions regarding devolution
1872. US presentation on US legal structures set up under FTAs
1882.1 There were a number of common chapters in US concluded FTAs:
189i. First chapter is preamble
190ii. Initial provisions and definitions – setting out the scope of the FTA and establishment of
191the free trade area, contains agreement-wide definitions.
192iii. Administrative and general provisions.
193iv. Dispute settlement – this serves one of the main negotiating objectives required under
194Trade Promotion Authority (TPA), namely, settlement of disputes.
195v. Exceptions – usually: 1. General exceptions; 2. National security; 3. Taxation
196vi. Final provisions – annexes, amendments, how other countries can accede to the
197agreement, termination, entry into force, authentic text language.
1982.2 VJD – asked for further elaboration on TPA objectives and how they relate to objectives in
199the preamble.
2002.3 AW – preamble traditionally doesn’t track negotiation objectives. It explains intention to
201accomplish an FTA. It’s not as prescriptive as TPA. Note, TPA objectives need to be sufficiently
202detailed to allow for the fact that a condition to getting up and down vote from congress is to
203negotiate in accordance with objectives.
2042.4 MB - What is it like negotiating an FTA where you don’t have TPA?
2052.5 AW – Do not have to have TP authority to negotiate – it just makes passing agreement in
206Congress easier if you do. You would ideally want TP authority if passing through congress.
207TTIP started negotiation without TP authority. You do not need it to conclude an FTA. TP
208authority prohibits amendments to implementing legislation regarding that FTA.
2092.6 VJD – If talks move beyond scope of TPA – this might not be an impediment but may hold
210up the approval process?
2112.7 AW - Yes
2122.8 VJD – When does Congress sign off adherence to TPA?
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2162.9 AW – USTR would present every stage to Congress – so Congress would be kept fully
217informed. At the end of the process they would make sure the objectives are met.
2182.10VJD – If there is a determination the TPA objectives are not met you do not get the
219expedited procedure?
2202.11AW - Yes
2212.12MB – UK has complex set of territories. What is in territorial scope in US FTAs?
2222.13MJ – Scope includes Puerto Rico and some territorial waters.
2232.14VJD – Elaborate on recent US practice of joint committees and the parameters assigned to
224them.
2252.15AW – Joint committee supervise and review implementation operation of agreement. USTR
226would co-chair with equivalent individual. This would oversee any other committees created to
227deal with particular chapters. Seek to resolve issues associated with agreement. It would act as
228an oversight committee to make sure agreement is working.
2292.16MB – Joint committees tend to have modification powers or powers to accelerate tariff
230elimination - what domestic process applies?
2312.17MJ – Joint committee consider amendments but cannot amend itself. This would need
232congressional oversight/approval. Sometimes there is leeway in the agreement in itself.
233Example given of an EU MRA from 1998, an annex was amended and concluded by the US as
234an executive agreement as authority already vested in the executive through the previous
235congressional authority.
2362.18VJD – Do joint committees typically have power to issue authoritative interpretations on
237provisions of agreement?
2382.19MJ – In context of resolving disputes – usually does arise regarding interpretation or
239application. But there will always be a separate dispute settlement chapter.
2402.20 VJD – Do you have some agreements where there is modulated dispute settlement i.e.
241designated chapters for specific types of state to state dispute resolution?
2422.21MJ – Areas such as labor and the environment would usually engage state to state dispute
243mechanism. Competition chapters are usually not subject to dispute settlement. Others may
244have either different standards of review or different types of dispute settlement, e.g.
245consultations.
2463. US presentation on anti-corruption provisions in US FTAs
247Given by Matthew Jaffe (US) (MJ)
2483.1 MJ – There is normally a dedicated anticorruption chapter in a US FTA. Usually falls on
249lawyers to negotiate this. Affirms aims to: eliminate corruption on matters affecting international
250trade and investment, and in the public sector, to protect individuals e.g. whistleblowers, to
251promote integrity of public officials, and to prevent and fight against corruption. 
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2553.2 UK seen by US as having a very extensive anticorruption programme. This would be a
256different discussion with the EU as there was a question of competence in the EU re.
257anticorruption.
2583.3 AI – Anticorruption a top priority for UK – still considering how can we best approach the
259issue. Asked the US to say a little more about commitments and provisions
2603.4 MJ – Follow OECD guidance – include references to: combatting and preventing public
261sector corruption, protecting whistleblowing, promoting integrity of public sector. Anti-corruption
262agreements are important in international trade – US has noticed other countries around world
263tend to ‘copycat’ US agreements, so if the FTA is clear on anticorruption then this can help set a
264global standard. Enforcement of anti-corruption has been excluded from state-to-state dispute
265settlement.
2663.5 AI – has exclusion of anti-corruption from dispute settlement made FTA negotiations
267easier?
2683.6 MJ – Hard to say – what is in a particular FTA depends on who partner on other side is. It’s
269been evolving. If it was going to be subject to dispute settlement, what kind of dispute
270settlement should it be subject to? Consultations?
2714. US presentation on Fed/state split on trade issues
272Given by MJ (US)
2734.1 Congress and the President work very closely together on FTAs. President has the powers
274to conduct foreign affairs but Congress has the power to regulate foreign commerce and
275interstate commerce, lay and collect taxes, duties and excises. The power is a legislative one
276vested in Congress which can then delegate powers to the President.
2774.2 Federal authority pre-empts state authority. Congress has the power to regulate commerce
278in the form of foreign commerce clauses. This can also apply as between states in inter-state
279commerce clauses. A dormant commerce clause is the constitutional authority that even when
280the Federal Government has not exercised its competence, by implication States cannot pass
281legislation that burdens or discriminates interstate commerce.
2824.3 Two other clauses on Congressional power – Supremacy clause: Federal law trumps state
283law where they share legislative jurisdiction. Necessary and proper clause: Congress has
284powers to make all laws necessary and proper; if ends are legitimate can use whatever means
285to get there.
2864.4 Contrast US and EU system. Not a good analogy to compare them. EU does not hold itself
287out as a federal state. Member states are all self-governing nations. Very different from US and
288the constitutional mechanism. The fifty states do not have a direct or indirect role in US FTA
289negotiation – might consult but no real role in treaty negotiations or approval of FTAs.
2904.5 VJD – States having no formal role in negotiations: 1. Is there an informal mechanism to
291ensure State involvement? 2. States do have competence on regulatory issues that FTAs touch
292on – what other areas of US FTAs are areas of state competence?
2934.6 MJ – We have an inter-governmental affairs office and they keep states up to date. In the
294formal process States are not involved. States have powers and it depends to what extent that
295power extends to specific items in the agreement. Government procurement and the services 
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299sector…. this is often a federal power which has been returned to the states. There was
300recently an accountants’ agreement between the sector representative covering all states and
301Scotland.
3024.7 SB – Regarding product regulation e.g. telecoms – where States might have different
303regulations, how does that effect FTAs?
3044.8 MJ – State regulatory authority is one given to state by congress. Where there is federal
305pre-emption, Congress can still create exceptions. It would be helpful to bring specific areas to
306US attention as any talks develop.
3075. UK presentation (DExEU) on implementation period.
308Led by Cathy Adams (UK) (CA)
3095.1 Main aim of the transition period is maintaining status quo. For period from March 2019 to
310December 2020 the UK remains bound by EU law subject to not participating in institutional
311affairs of EU.
3125.2 Article 6 Withdrawal Agreement – provides for UK to be treated as a member state subject
313to derogations regarding institutions. EU law applies in transitional period even though we won’t
314be a member state. Therefore for the purpose of external agreements, the joint aim of the EU
315and UK is that 3rd country agreements continue to apply. EU and UK accept and agree that as
316between ourselves we cannot determine that they continue to apply as a matter of law as the
3173rd country has a role to play.
3185.3 Continuity mechanism – Article 124(1) – there’s an asterisked footnote providing that a
319notification by EU to 3rd countries that UK is to be treated as a member state for purpose of the
320agreements. Aim is to get 3rd country to acquiesce or to agree that agreements remain in force.
321Agreement was reached with the EU that the basis could be an exchange of notes with 3rd
322country to establish subsequent agreement that existing agreement continues to apply to UK.
3235.4 Article 124(4) – Confirms that the EU has no objections to UK negotiating, signing and
324ratifying bilateral treaties to take effect post-transition.
3255.5 US – Is the intention that the EU will send one letter to each 3rd country? Or will it be
326individual letters? Does the UK expect to send the letter or will it only come from the EU?
3275.6 CA – Finer detail is still to be discussed but expecting it to be one letter from the EU for
328each 3rd country relating to all the agreements that apply between the EU and the 3rd country.
3295.7 US – Is the intention for the trade partner to respond agreeing that they will continue to
330apply to UK?
3315.8 US – EU preference is so far as possible using VCLT principles. This could be through an
332exchange notes or by virtue of practice, for the EU this means that there need not necessarily
333be a response to the notification. It will be a matter for the 3rd country as to whether it will
334respond. UK would favour a response as it gives greater degree of legal certainty.
3355.9 AW – The current agreement includes end date for transition period. Can it be extended?
3365.10CA – There is nothing in the current text on that.
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3405.11MJ – Territorial application – most agreements say they shall apply to territory to which
341TEU applies. Given this, how would current agreements continue to apply to UK?
3425.12CA – Article 6 provides for this – there is a conduit going between TFEU and TEU via the
343Withdrawal Agreement and into UK law. Article 3 – territorial scope. Reason treaties use this
344common clause regarding the TFEU is that certain bits of treaties don’t apply to all territories of
345member states, so 3rd country agreements apply to the same extent as EU law applies to UK
346territories.
3475.13MJ – Signatory process from EU perspective – who has competence?
3485.14CA – EU side have made clear that this agreement does not require ratification from
349member states because of the special status of article 50. Legal reason is that art 50 is unique –
350it’s about leaving EU and competence has been delegated to EU by member states.
3515.15MJ – Useful for US to have some insurance on where the progress is at. US is concerned
352about member state role and European parliament role in holding this up.
3535.16CA – There is a constant dialogue with the EU27 – the commission reports back to them. It
354has been made clear to the EU27 that this is an EU only agreement.
3555.17AW – Discussion so far has been on bilateral approach. Do we envisage this approach
356going covering multilateral agreements too and if so how?
3575.18CA – Important to distinguish from those multilaterals where UK is already a party – which
358is most agreements. There is a small number of multilaterals (c.20) where they fall in EU
359exclusive competence e.g. GPA. Discussion with the EU is still ongoing. At some point the UK
360will have to become party in its own right. The legal exam question is: how do we transfer the
361UK’s current obligations as a part of the EU to apply to us as an independent party to the
362agreements?
3635.19 AW – Would be helpful to know if the EU, on behalf of the UK, plans to send a continuity
364type letter. We’d want to discuss further.
3655.20 CA – The letter would have to be different to the bilateral letter, it’d have to be adapted. It
366would be useful to have a sense of your perspective on this as it’s a live issue.
3675.21Cathy Milton (US) – Withdrawal Agreement – is it anticipated notification would come with
368list of agreements that apply or generalised “all agreements”.
3695.22CA – Not yet agreed. We are likely to prefer list approach, helpful for US view on which
370they would prefer. JH – it may very from one country to another. What would work best in the
3713rd country legal system?
3725.23MJ – What are the next steps on the agreement now?
3735.24CA – There will be a ratification process – the text in green in WA is settled, and that is
374around 75%. Expect further negotiations between now and June. Ideally looking to settle the
375text by then. If not, negotiations continue, the backstop date for settling is the October meeting
376of the European Council. Once signed it goes to European Parliament for consent to ratify. Has
377to be ratified in the UK as well. Fairly light touch approach to treaties in UK normally but will
378need to legislate to give effect to it. Drafting of legislation has already started. Timetable is quite 
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382tight but achievable. JH – We hope notification to 3rd countries can be issued much earlier.
383Hope to take that forward quite quickly.
3845.25MJ – What is the legal effect of notification prior to ratification of the WA?
3855.26CA – Treaties cannot continue in force if there is no interim period. We see no major
386obstacle to going through the notification procedure on contingent basis. It would have no legal
387effect if Withdrawal Agreement doesn’t come into force but the advantage to completing this
388process at a reasonably early date is to provide legal certainty.
3895.27US – What chances that the UK Parliament could make a substantive change to the WA
390following signature?
3915.28CA –the Withdrawal Agreement is accepted or rejected – there is no power to change.
3925.29 AW – The Withdrawal Agreement provides in Article 121(4) that the UK can negotiate etc.
393Do the guidelines include consultation requirements on the UK or is it an exercise that the UK
394can do independently?
3955.30 CA – Independently. Article 121(4) recognises that it’s about the future and the UK’s
396obligations after it’s fully detached from the EU so there’s no legal need in EU law for the UK to
397submit any agreements to the Commission. The safeguard in that Article is about the date of
398entry into force.
3996. Concluding remarks
4006.1 All agreed – Next steps are to prepare, pool and exchange any further questions –
401particularly on state/federal split and issues of devolution in the UK. Potential for setting up legal
402working groups ahead of next meeting.
403Action Items
404• UK to prepare more detailed questions, in particular regarding the division of competence
405between federal/state levels and its relevance in FTAs in specific areas.
406• US may provide additional questions regarding the devolved administrations and their role
407in WA negotiations and in Bills currently before Parliament.
408• Questions to be exchanged prior to the next meeting.
409FOR UK INTERNAL DISTRIBUTION ONLY
410Lead Negotiator Analysis/Comments
411The meeting was useful and conducted in a cooperative spirit. The US nevertheless seemed keen
412to keep the discussions relating to their presentations at a general level. This manifested itself in
413the following ways:
414• In response to probing questions from the UK regarding the legal structure of US FTAs, MJ
415mused that this “seemed like negotiations”
416• In presenting the division of federal/state competence as regards trade, MJ kept the
417presentation at a highly general level, and engaged in extensive diversionary commentary,
418for example regarding American history and constitutional law. 
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422• The US questioned Cathy Adams extensively on her presentation, even though some of the
423later questions essentially repeated those already asked and answered. This resulted in
424very little time being available at the end of the session for the UK to ask its questions
425regarding the division of federal/state competence in trade issues, which appeared to be a
426deliberate tactic.
427The session provided useful information regarding recent US practice on anti-corruption and on the
428legal structure of FTAs. Looking forward, the UK will want to obtain further information on the
429federal/state division of competence and, to the extent possible, on how this division plays out in
430trade negotiations and on the input and influence that states have, even informally, in such
431negotiations. Given US reluctance to elaborate in a meaningful way on these subjects, the UK will
432need to formulate very specific and targeted questions to elicit useful information. The UK will also
433need to be prepared to answer US questions regarding the roles and powers of the devolved
434administrations. 
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43713
438Title of Meeting: Small Medium Enterprise Session
439Date: 21 March 2018
440Time: 11:00-14:00 (EDT)
441Participants
442Name Department/Directorate
443Julian Farrel DIT – Regulatory Environment
444Kate Maxwell DIT – Regulatory Environment
445Andrei Murariu BEIS
446Angelina Cannizzaro BEIS
447Lizzie Chatterjee BEIS
448Rebecca Fisher-Lamb DIT - Services
449Christina Sevilla USTR
450Ray Pavlovskis USTR
451Sarah Bonner US – SBA
452Tricia van Orden US – Department of Commerce (DoC)
453Lori Cooper--phone US – DoC
454Patrick Kirwan US – DoC
455Barrett Haga US – DoC
456Major Clark US - Office of Advocacy
457Ian Sherridan US - DOS
458Key Points to Note
459The meeting began with agenda discussion from Julian and Christina. Christina welcomed the
460group and began to introduce the attendees around the table. Christina set the agenda order and
461turned the floor over to Barrett.
4621) Barrett presented on two agenda points in one slideshow. American Competitiveness
463Exchange on Innovation and Entrepreneurship program and the Clusters Cooperation with
464Clusters MOU key points below:
465a) Barrett said part of the goal of his presentation was to get everyone on same page because
466the US model has changed from building things into building systems. He explained that
467alternative definitions are a large barrier to trade agreements. He said pinpointing how the
468US and UK define jobs and other terms is critical for supply chain information sharing. He
469envisioned bringing the EU and UK into the Clusters program via cooperation agreement. A
470portion of the presentation touched on developing all economic actors, meaning that
471clusters succeeding would lift struggling clusters. The US government has changed focus
472to expansion of capacity potential.
473b) The old US way of thinking was open to business, “big game hunting”, “next big thing” and
474“if you build it they will come.” 
475OFFICIAL – SENSITIVE (UK eyes only)
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478i) The open to business idea was that trade can be driven by mutual tax cuts. He
479mentioned race to the bottom and said the data shows cutting taxes or regulation does
480no create significant or sustainable growth.
481ii) Barrett explained that a model that seeks out giant multinational corporations and
482transnational corporations like Amazon and Google has drawbacks. They employ many
483people and bring economic development, but often at costs that pit cities against each
484other to offer the best subsides or tax breaks. Ultimately the “big game” received
485subsidies and concessions that reduce the positive impact.
486iii) The “next big thing” was the concept that every country wants to have the next Silicon
487Valley. He countered by saying there are few places in the world with the intellectual
488capacity to develop an environment like Silicon Valley (London was one of the locations
489with the intellectual potential).
490iv) “If you build it, they will come,” meant that big infrastructure development means
491economic development. He said the data does not support infrastructure spurring
492economic growth.
4932) The new economic model was called the Florida State model. Barrett based this name off of a
494US college football program. The new model develops systems of excellence by using data
495analysis to connect the economy.
496a) The goal was for incremental value changes to occur through small revenue increases. The
497system of excellence is created through leverage points where there is strategic advantage.
498b) The main points are to
499i) identify where strategic advantage is
500ii) deploy human capital in job pools
501iii) develop prescriptive infrastructure
502iv) increase efficiency
503v) Create public institutions.
504c) Barrett used Google as an example of how profits should be sought, mainly that high
505margin areas should be the focus.
5063) The cluster program is a collaborative decision making model (five year economic plans to
507mitigate politics)
508a) In the plan the US government certifies local/state/regional process to develop greater
509metropolitan regions. The US government wants to share the clusters model with the UK.
510b) The clusters are regional concentrations of related sectors. The Florida coast was an
511example of a developed cluster. The aerospace tech sector has congregated in Florida and
512now provide top tech for aerospace. The US government wants other countries to map their
513clusters in order to identify areas of mutual development.
514c) A further example was given where a university with a developed movie production school
515used its expertise to develop its medical schools’ imaging program. Barrett envisioned
516similar sectors of a regional economy helping each other. He said the US government is
517also conducting research on technology development trends for the next ten to fifteen years
518to support cluster growth.
519d) Clusters emerge where competition is at a national level, but growth is not limited by the
520local market. Barrett commented that much of the small business focus on the government
521side is supporting patents and innovation within clusters.
5224) The US government plan is to share strategies (CEDS) with other counties (they want the UK
523to adopt some)
524a) Canada, Mexico, India, Argentina have programs
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528b) At a high level clusters are a detailed SWOT analysis focused on “What is a country good
529at and where to invest”. Clusters allow for quick identification of capacities across regions
530and countries.
531c) The US has a MOU on the CEDS strategies with South Korea. The pilot program uses US
532firms in Korea and could serve as a model for future programs.
533d) The larger strategy aims to develop nodes in order to connect clusters.
5345) America Competitive Exchange on Innovation and Entrepreneurship
535a) Program ranging the hemisphere to increase overall competitiveness
536b) A forum of connected individuals convenes in a different region for ACE exchange
537c) The engagement tour seeks to share and coordinate best practices
538d) High profile attendees are invited
539e) The US is willing to offer the UK 2 spots of the 50 in the Central California tour for ACE 10
540f) Anyone who attends must be able to provide something. “Move the needle or you don’t get
541to come back”
542That ended the formal presentation from Barrett. Some questions drove cross talk discussion.
543Julian asked what moving the needle meant for UK participation. Barrett said anything starting with
544a low point of access to laboratories as an example. Another example was a North Carolina textile
545facility sharing technology with Mexico and starting a school knowledge sharing agreement. The
546outcome was development of a shared textile created for Milan fashion week
547Christina noted Germany was attending and asked about the level of seniority of the participant.
548Barrett explained that a Deputy Director General was attending, and that Israel had also sent a
549Deputy Director. The UK consensus was that for the UK this could mean representation by a junior
550minister or a senior official.
551The US asked Angie about the UK industrial strategy. Angie laid out the areas of the BEIS
552strategy: ideas and innovation, infrastructure, place-based development (devolution to national
553governments), business environment for sector specific deals, and skills.
554Barrett suggested the next step could be to look at clustering in UK. He emphasized the
555importance of defining sectors to avoid duplicating efforts. Pat suggested looking at the actual
556clustering tool in order to pinpoint where sectors are growing and where patents are growing.
557Julian asked about how developed clusters stimulate lagging sectors. Barrett explained that US
558government is able to provide less money for more impact given the cluster interconnectivity in
559order to stimulate lagging sectors.
560Julian said the UK action should be to identify a senior official in BEIS or DIT for the ACE 10
561conference in California. On timelines, Barrett’s explained that June 1st is when courtesy
562applications open to UK via email. Public applications open on 23rd June. The deadline for
563responses via portal application in August. The meeting is October 21st
564-28th. As a formality the
565committee must vote on applicants, however the US is confident the UK will be confirmed easily.
566Christina recapped outcomes of Barrett’s presentation: the ACE invitation, clusters mapping,
567strategy sharing, and technological assistance.
568Barrett also added that an ACE member in good standing gets to attend the America
569Competitiveness Forum which is 3000 high profile and high access members. Communities that
570host the event gets 5 invitation spots.
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574Julian asked if the ACE invite could be an outcome of the working group. Christina and Barrett
575agreed that the invitation from the US government for the UK to join ACE network should be a
576TIWG outcome.
577Julian asked about the distinction between US unilateral work and the OAS. Barret said the
578Organization of America States is a forum for the US message to be multiplied to a larger audience
579and capture interest from audience members less willing to work with the US bilaterally.
580In response to Julian’s question on the US experience with clusters, Barrett said that the US is
581starting to see countries as a whole adopt the cluster model, and best practice sharing. The US
582wants to define the location quotient for nodes of connectivity. Christina suggested the clusters
583model could be a good for point for a future US UK MOU
584SME Cooperation Arrangements—Lori Cooper (Deptment of Commerce)
585Lori spoke briefly about SME cooperation. She said Commerce is developing an enterprise
586network to do more work in US states specifically with SMEs. Primarily that has been best practice
587sharing as well as coordination at trade shows.
588The department of Commerce has a co-operation agreement with the EU to match make US and
589EU businesses. One hundred US entities participated and half of all the participants were SMEs.
590The difficulty now is determining the results of the four hundred plus peer to peer meetings. Part of
591the cooperation agreement with the EU is to confer with EU counterparts and others to identify who
592from around the world would worth meeting. A similar conferral process would be good from a UK
593cooperation agreement. Lori suggested a specific call on clusters.
594Lori wanted trade show cooperation in smart cities for the US and UK. High interest from the US in
595Barcelona business to business meetings. She said the majority of the past year has been “on
596pause” waiting for instruction from the administration. There is high visibility for Commerce to show
597successful programs in order for similar programs and agreements to be renewed past 2019.
598Lori offered an example of SME cooperation. Ecobio is a clean chemical company, Janet at Ecobio
599raised interest in a peer to peer meetings on UK and US green tech development. Janet is
600currently pulling together 5-10 US and UK SMEs in green tech to talk about issues and ways to
601enhance opportunism in green chemistry. If that pilot goes well it can be expanded to more
602sectors. Janet and the US side were looking for UK government suggestions for green tech
603companies. On a larger scale the US was looking to replicate EU US programs with higher
604intensity and coordination.
605Christina raised the point that at the SME dialogue she heard interest in peer to peer connections.
606SME cooperation to date has been primarily government to government. Much of what Commerce
607does is cross cutting across member state and EU competencies causing some difficulties. EU US
608cooperation at trade shows does not have metrics on sales, but it was a good process for the US
609and UK governments as well as business network cooperation in general.
610The rest of the session focused on questions between the delegations:
611Julian noted that other colleagues in DIT worked on business engagement (ITI formerly UKTI).
612Rebecca said her team works closely with ITI colleagues on partnerships with businesses. 
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616Kate said that DIT officers are posted throughout the US for sector specific and cross cutting
617campaigns. She added that DIT sent a big delegation to Consumer Electronics Show (CES).
618Christina said Commerce also works a lot with CES. Christina asked if the delegation would go
619again and if the delegation could be a deliverable. She posed language that the UK and US are
620exploring trade promotion/collaboration at CES. Kate said the potential delegation should also add
621business to business element.
622Pat explained that Commerce currently brings buyers and recruits delegations to take to CES
623which gives the US a large space at CES. The US is willing to share the large central space with a
624UK delegation. He asked if the UK takes a delegation to CES to visit or buy or something different.
625Sarah said that the Small Business Association is also at CES with a large presence. The SBA
626gives advice for identifying trade missions to the UK and sometimes organises these. The
627programs are aimed at state trade expansion by giving US states access to resources in order to
628internationalise businesses.
629Pat said STEP Programs and Trade Shows certified through the SBA are highly regarded. He
630suggested that Commerce could make similar recommendations where foreign buyers and UK
631companies would find it useful to attend. Sarah asked for SBA certified trade shows to be included
632in those recommended by UK government in order to expand clusters
633Future SME WG Cooperation and 2nd Us UK SME dialogue in UK – brainstorm ideas for topics e.g.
634digital trade and SME, other ideas; and SME Chapter in Trade Agreements—Christina Sevilla
635USTR
636Christina set out what the US has done previously and what the US is seeking with other countries
637currently. The current administration remains committed to SMEs and SME development. The
638SME chapter was the first one agreed in the NAFTA renegotiations. The language is very similar to
639the TTIP language with some elements from TPP and beyond. The SME workshops were housed
640under technology chapters of the FTAs and the idea with the US UK FTA would be to
641institutionalise the SME workshop (the dialogue) under the SME chapter. The new NAFTA SME
642text contains language for a trilateral SME roundtable and the US UK text would build on it to
643capture current cooperation already underway. Christina explained that the whole NAFTA text
644would be available online once the principles are agreed.
645Information sharing was a big obstacle in TTIP. Christina wanted to be clear that time needs to be
646spent on developing the content, not on how it’s presented to the home audiences. (She stressed
647TTIP negotiations spent too much time debating the platform). She said that online information
648sharing is very important but specific form was less important. Export.gov houses finance and
649exporting information because many US government departments touch on business and
650exporting.
651Christina envisioned including a high customs de minims - a top demand of SMEs. Coverage for
652returns and sellers was also offered as something to be included. She noted that US would want
653SME definitions to be defined internally, meaning the US national standards of an SME and UK
654standards could be different. Christina said that the SME chapter would not have special and
655differential treatment for SMEs. The rules of origin would apply to all business.
656The UK asked which other chapters are SME related in the standard US model and which chapters
657the range of government departments are involved in negotiating. Christina answered that there is
658an SME working group across the departments that is highly involved with the FTA including the
659SME chapter. Commerce is consulted on every chapter, USTR leads the chapter conversations
660and maintains high control on digital chapters. The SME chapter is a guide and will have cross 
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664references to other clauses in the FTA. A continual government dialogue will be in the SME
665chapter in order to ensure SMEs are receiving continual benefits. The idea is to allow stakeholders
666a mechanism with which they can engage within the text of the FTA.
667The UK asked if the NAFTA chapter includes a lot of detail on information sharing. Christina
668confirmed that it is not overly prescriptive. Julian asked about appetite for embedding SME
669provisions across chapters and commented that there is a job to do, to sell benefits across
670chapters that will benefit SMEs. US delegates agreed and cited digital trade chapter example of
671where that is a clear example.
672Christina said that both sides should create fact sheets for SME benefits after the text is agreed.
673She added that the chapter is not subject to dispute settlement. Portions of the SME chapter that
674are references to other chapters can be subject to dispute settlement. Digital trade and intellectual
675property are important clauses located outside of the chapter, but referenced in the SME chapter.
676The US asked about the role of the Devolved Administrations in FTA negotiations. DIT explained
677that most issues on SME are not regulated at a subnational level. The US added that they will not
678“take a heavy hand on subnational level with national governments.”
679Christina stated in conclusion “Work being done in this committee is laying a lot of groundwork for
680SME cooperation section.”
68120 March SME Dialogue—Discussion of SME dialogue feedback
682Julian commented that there was good discussion and he supported additional dialogues involving
683sector specific conversations. He made the point that the more content driven discussion the
684better understanding of how to make this FTA work, “This is how we find out the obstacles.” There
685were some UK follow up ideas based on the previous day, but no definitive plan yet for the next
686dialogue.
687Angie offered reflections on the dialogue. She said the messages fit the BEIS engagement plan.
688The dialogue was quite reassuring. Her aim was to see if the messages from the dialogue can be
689successfully captured in order to inform an FTA. Information sharing was a high demand message
690that could be considered for the next dialogue as well as banking. She commented that the
691questions and answers at the dialogue were similar from UK local conversations.
692Christina said she was looking for policy recommendations based on the dialogue. She was
693looking at information sharing mechanisms and noted the importance of the SME reception to the
694US side. She said it was important for the business to also have a networking opportunity if they
695are giving up a day of work to engage with the government and their peers. In general she said the
696US policy toward SMEs was “do no harm.” The de minimis value, SME chapter, data sharing
697(including cross border) and protecting IP were all areas she heard and was focused on translating
698to policy recommendations. Christina said she was surprised to hear from some SME’s that they
699could benefit from basic information like what an LLC is, export bank information, and general
700exporting information. She said exploring investment incentives and sharing new regulations would
701also be useful to SME’s for the next dialogue.
702The US suggested group specific cooperation dialogues with the audiences primarily being service
703providers, veterans, and women owned business groups. The UK said we would explore.
704The US suggested the next SME dialogue deal with Brexit. Christina said there was high interest
705on the US side, and it could be useful doing a session on business before and after March 2019. 
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709Discussion turned to the timing of the next TIWG – potentially in July. Kate said the European
710Council calendar needed to be consulted and digital trade and e-commerce could be good session
711for the next dialogue and working group. Christina said a dedicated e-commerce training session at
712the next dialogue with valuable resources could be a good transition to a session later in the date
713on digital trade.
714Rebecca commented on services broadly, saying how important they are for SME engagement.
715She said that the UK is internally pinpointing their policy positions. She suggested the next
716dialogue have time devoted to services.
717Andrei suggested conversation on innovation at the next dialogue and working group including a
718BEIS presentation similar to the competitiveness exchange presentation by Commerce.
719Discussion turned to the format of the dialogue. Julian set out that regardless of topic, the next
720dialogue needs to be advertised more clearly as either a dialogue with lots of conversations and
721round table discussion or as a government presentation so UK audiences know what to expect.
722Christina explained that in the US-EU SME workshop the initiative started as a half-day session
723and moved into a full day. She was open to more time and different formats in the next dialogue.
724Angie suggested that a combination of presentations and interactive portions could make for a
725successful second dialogue. Julian said that in the next dialogue he would want more SME
726participation and less government presentation. Rebeca suggested a joint session at the next
727working group meeting to plan the second dialogue.
728Christina summarised the discussion and noted that the next working group will take BEIS
729presentation on innovation. Julian requested a presentation on the NAFTA chapters in the next
730TIWG meetings. Major said he would send additional ideas to send to Christina.
731Lizzie asked about stakeholder evaluation following the dialogue. Christina wanted US and UK
732feedback to be sought separately. She suggested that as a general plan the next SME dialogue
733could occur later in 2018.
734Julian asked that new agreements in the SME session not be included in USTR’s formal statement
735(published Friday 23 March). He suggested the previous statement agreed to by London and
736Washington be maintained as it had been approved considering sensitivities around the European
737Council. Christina and Julian agreed keep the previous statement and have a secondary
738conversation about a statement specific to the SME session. 
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742Title of Meeting: Services (MRPQs/Professional Business Services)
743Date: 21 March 2018
744Time: 14:00
745Participants
746(Please list both UK and US participants, even if joining via VTC or conference call)
747Name Department/Directorate
748Rebecca Fisher-Lamb DIT
749Ben Rake DIT
750Matt Ashworth DIT
751Gavin Bayliss BEIS
752Lizzie Chatterjee BEIS
753Katie Waring DIT
754Rhys Bowen DExEU
755Oliver Griffiths DIT
756Meghan Ormerod British Embassy Washington
757Tom Fine USTR
758David Weiner USTR
759Ryan Barnes Department of Commerce
760Rebecca Nolan State Department
761Jessica Simonoff State Department
762Chris Mckinney US Mission to the EU
763Greg Burns US Embassy Washington
764Matthew Jaffe USTR
765Tim Wedding USTR
766Silvia Savich USTR
767Report of Discussions and Outcome
768ICAS/AICPA/NASBA Agreement
7691. Tom Fine (TF) opened the discussion for USTR, outlining the Mutual Recognition
770Agreement signed recently between the Institute of Chartered Accountants of Scotland
771(ICAS) and the American Institute of CPAs (AICPA), and the National Association of State
772Boards of Accountancy (NASBA) representing US state level regulators. He described
773auditors as being in a unique space in which there could be quick movement on bilateral
774work. TF said that USTR would like to go through some of the issues that this agreement
775had raised that would likely come up in the future. 
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7792. Rebecca Fisher-Lamb (RFL) agreed that this was a good example of positive bilateral work
780that we should look to build on. HMG was keen to build on the potential for auditors and
781then have a broader discussion on other service professions. This could include regulators.
782The UK is keen to learn from the US experience with other countries to see what we can
783learn and use in a UK-US context. RFL noted that it was important to get started and get
784planning on MRPQs given the large amount of coordination needed and time this is likely to
785require.
7863. TF explained that NASBA is an umbrella group for state level regulators. The state level
787regulators work very closely with their umbrella organisation. Auditors are a very
788concentrated industry in which there are not a lot of players (a few big firms) they tend to
789face the same issues again and again. In practice, the states licence professionals in a
790uniform way. It is very easy for US licensed individuals to move from one state to another.
7914. The agreement will not come into force in a state until that individual state has taken action
792to recognise it. NASBA does not have legal authority to bind a particular state, but they do
793have a lot of experience in signing this type of MRA. They know what they can persuade a
794state to do. As a result, they can sign this type of agreement, with a high degree of
795confidence that the majority of states will recognise it. However, in all MRAs signed
796negotiating partners take a risk in this space. The “rubber doesn’t hit the road”; the benefit
797is not provided until the states take the agreement into their law. Following the signing of
798the agreement the process now turns over to the states to begin to start implementing this
799through their legislation or regulation.
8005. RFL asked how long this usually takes. TF explained that it varied, but that in the case of
801another MRA in the architecture profession an MRA was signed last July and by December
80230 states had signed up. The state level legislative process can happen much more quickly
803than at the federal level, and there is often the option of implementation through regulation
804rather than legislative action. Past auditing agreements have previously always enjoyed a
805high take up rate – almost always 49 of the 50 states have signed up. TF commented that
806auditing is the profession with the highest number of MRAs. TF reiterated that this is
807because auditors are very engaged; there are a very small number of very large firms.
808Firms have a very high interest in moving personnel from market to market very quickly to
809serve the needs of their clients so there is a high appetite for MRAs. Many other
810professions in the US have firms spread out across the states, but auditing is one of the
811exceptions. TF commented that this was just his “pop psychology” of the industry. Ben
812Rake (BR) noted that key personnel could also have influenced this and that Ken Bishop at
813NASBA had made a big push on it.
8146. RFL asked if USTR has a role in arranging the MRAs, or if they leave this to the state and
815professional bodies to arrange. TF explained that USTR does not play an active role but is
816occasionally asked in to brief on the overall trade picture and some parts of the federal
817government might be asked specific questions on which they will provide advice to those
818negotiating the agreements.
8197. TF explained the dynamic between the states and the federal government. The states’
820interest in maintaining their authority is paramount. They would not willingly invite the
821federal government in. They view MRAs as solely an interstate matter. As trade officials we
822think of MRAs as a type of trade agreement but this is not how the states see it. They
823consider an MRA to be both sides doing something unilateral but taking parallel action and
824making their own decisions. TF said that it’s widely understood that this is something of a
825charade – in the Scottish agreement clearly the states only agree to sign up to it because 
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829Scotland is doing something similar. RFL said she wanted to work out how we can support
830professions in seeking this type of agreement for the whole of the UK. During the TTIP
831negotiations the US seemed to have a good balance between federal government
832involvement and recognising state and business’/professions’ autonomy. RFL explained
833that this should be seen as a real opportunity: in TTIP the US repeatedly said that they
834would like to recognise the UK’s professions but they could not trust standards in all EU
835countries.
8368. TF agreed. The IQOP had already expressed to TF that they are beginning work with other
837institutes in the UK. They expressed a high degree of interest and optimism that within
8382018 they would have more agreements of this nature. TF explained that this would vary
839from institute to institute and that each negotiation would raise different issues, but that they
840seemed optimistic.
8419. BR explained that DIT hoped that it would be possible to agree something more widely than
842with Scotland and that DIT is working close with the relevant bodies to see what will be
843possible. From conversations with UK regulators he was reasonably optimistic, and it was
844good that TF was hearing similar messages. In the UK the Financial Reporting Council
845would have to sign off on any deal done, but there is no reason to believe that it can’t be
846done.
84710. In response to a question from TF BR set out the system of regulation in the UK. ICAS is a
848private sector body. There are four audit professional bodies in the UK overseen by the
849Financial Reporting Council which is quasi independent from government. The Financial
850Reporting Council would have to sign off on any agreement done by one of the regulators –
851e.g. by ICEAW. In the case of the Scottish agreement ICAS pursued the agreement
852independently but had to get sign off from the Financial Reporting Council.
85311. TF asked if people who obtained their qualifications through ICAS could only practice in
854Scotland. BR didn’t think so, but took an action to check this.
85512. RFL commented that the Scottish agreement had made others think enthusiastically about
856the options available in this space and the potential for other agreements. TF said that the
857Scottish agreement was one that might appear to have been done very quickly but that
858actually took ten years; the parties had been working on it for a long time. BR agreed, the
859equivalent bodies for England and Wales said they had been talking about a similar
860agreement for 25 years.
86113. TF said that the main focus from the US side in the immediate future was likely to be on
862ICEAW. The umbrella body in the US will maintain an open mind and treat all institutes
863evenly but equality of opportunity does not mean equality of outcome. TF noted that he was
864speaking frankly in saying that the US body did not see all institutes as being equivalent to
865one another. Some institutes are a much closer match to the US in the requirements they
866seek. BR noted that equality of opportunity was important and that the UK would want to
867see all audit bodies treated with an even hand.
86814. RFL noted that there is a lot of interest now in the discussion and that the focus should be
869on how any agreements of this kind will be implemented. TF commented that the UK
870should expect to see rapid implementation. He said that he would put a word into his
871contacts and ask to see progress reports. BR said that he would do the same on the UK
872side. 
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87615. On implementation both sides noted that that the agreement would be operationalised on a
877reciprocal basis: e.g. Scotland will recognised NY qualifications when NY recognises those
878obtained through the Scottish body. TF noted that some agreements only take effect when
879a certain number of states have signed up. Architecture agreements are often designed in
880this way.
881EU Audit Directive
88216. TF noted that the US has some specific questions in relation to the Scottish agreement.
883The EU Directive requires that in order to get auditing rights you must have certain number
884years of experience and that experience must have taken place in the EU. ICAS has
885undertaken to seek a view on whether they can recognise years of experience in the US
886State of the MRA. TF described the rule as “pure, rank protectionism” and set out that in his
887view there is no relation between the location of audit and validity of experience. TF said
888that the US had a high degree of interest in seeing the UK step away from the Directive as
889soon as the UK is able to do so.
89017. BR explained that the UK is still currently party to EU Directives and that the UK is still
891working on what the situation will look like post-Brexit. BR asked TF to explain some of their
892concerns in further detail.
89318. TF explained that their main concern was US persons who wanted to perform audit in the
894UK. Currently very senior partners had to have their “homework” signed off by more junior
895colleagues, simply because the Directive does not recognise their years of practice in the
896US.
89719. BR said that his understanding is that the UK and US systems of regulation have a degree
898of complementarity. TF said that the EU had taken wide reservations on auditing rights, but
899they understood that this was not driven by the UK. TF set out that the US is not pushing
900for people who are unqualified to be able to practice or sign off work, but they take issue
901with the Directive not recognising years of experience in the US because it is outside of the
902EU.
903Potential Architecture MRA
90420. RFL asked TF to explain why it is more difficult within the Architecture profession to get all
905states to sign up to agreements. TF said that this is still the second most active profession,
906but that it is structured differently. TF knew of agreements with Canada, Mexico, Australia,
907New Zealand and potentially one other country.
90821. Australia and New Zealand agreements were signed last summer. There was a period
909when the architecture profession was not sure if it wanted to continue to sign agreements of
910this kind. The Architecture regulators took the question to their board of directors and there
911had been lots of internal debate. The regulators had finally decided that they do want to
912continue to move forward on MRAs last summer.
91322. There is an active US-Canada architecture MRA. Mexico is less active, and TF suggested
914this is largely down to different operating languages. Architecture agreements tend to be
915more complicated in that the regulators take a “very hard look” at the partner with whom
916they are negotiating and take a decision about whether there needs to be a top-up
917qualification or exam before recognising their qualifications. For the Mexico agreement you
918can only access it when you have had 5-10 years’ experience, so it is not designed for 
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922young architects. Similar judgements are made in all agreements of this kind – for example
923in the Scottish agreement individuals on both sides must have 2 years minimum experience
924in order to qualify. BR asked why the US pursued an agreement with Mexico when the
925demand/take up was so low. TF explained – he suspected it was mostly politically
926motivated.
92723. Gavin Bayliss (GB) asked if there was an examination requirement as well as an
928experience requirement. TF explained that there is. Regulators take into account the
929examination individuals in a country are required to do. If they think the examination is good
930there is usually still a secondary examination, there is also a portfolio review which many
931think is quite burdensome.
93224. TF explained that in the TTIP context architects were leaping ahead of even the auditors.
933There had been lots of conversations, but it was always unclear to the US whether the
934Architects Council of Europe represented industry or the regulators. The problem in TTIP
935had been that notwithstanding the fact that there is a Professional Qualifications Directive
936that allows architects to move from one MS to another, US regulators/industry found huge
937differences between Member States. Some MS produced high quality architects with years
938of exams, apprenticeships and experience others did not.
93925. TF explained that the US’ initial approach in TTIP had been to offer three options: 1) Every
940architect in the EU would be treated in the same way, regardless of the member state. This
941resulted in a proposal on a fairly burdensome track that assumed the lowest common
942denominator; 2) Distinguish between MS. Those with higher education requirements
943treated slightly better than MS with lower requirements. USTR had assumed this would be
944attractive to the Cion as it would give them leverage over those MS with lower standards,
945and present a way to get MS to lift their standards. The Cion did not support this approach;
9463) Forget MS and look at individual architects. If an individual architect has attended a
947challenging educational establishment, has long experience and taken a high degree of
948challenging coursework they should be given extra credit. The Cion opposed this, arguing
949that it was a backdoor to distinguishing between MS.
95026. RFL asked why different states took a different approach to signing up to this type of
951agreement. TF explained that some regulators simply are not interested. All states begin
952from the position that they have a reasonable pathway open to everyone in the world. If an
953individual wants to practice in that state all they need to do is (for example) take steps 1-6
954and obtain their licence. The regulators argue that this is what individuals from other US
955states have to do, so people from other countries should be required to do the same.
95627. TF explained that that occasionally USTR stumbles upon a law covering a profession (e.g.
957undertaking or hairdressing) that requires citizenship for qualification (not the big four
958professions). When they are found they tend to be overthrown. TF explained that this tends
959to be the direction of US law – people don’t have to be a certain citizenship to obtain
960licences for professions.
96128. TF summarised saying that to the extent that States are not interested in the architecture
962MRAs it’s because they have an existing route to licensing. This only accounted for a
963minority of states. New York is one of them. TF said that NY doesn’t care about MRAs –
964their approach was that if you want to build in New York there is a pathway to follow for
965everyone. RFL commented that the industry is very focused on New York. It was difficult
966that there is a different expectation on both sides – states expected access to the whole of
967the UK whereas MRAs only offer the UK state-by-state access in the US. TF recognised 
968OFFICIAL – SENSITIVE (UK eyes only)
969
97025
971this, but said that ultimately, the states were just cutting their own people off from access to
972the UK too – no one was able to free ride on an agreement.
97329. BR noted that NY had opted out of the national agreement and then made their own MRA
974with Canada. TF explained that he wasn’t sure why this was, but could reach out to
975contacts to ask.
976Engineering
97730. TF explained that engineering offered a good illustration of how states view MRAs: as
978nothing to do with international trade. Texas needs lots of engineers and as a result has
979lots of MRAs. It’s all based around demand.
98031. TF set out that the US reported to the OECD on its MRAs a couple of years ago and
981agreed to share the report with RFL.
98232. RFL said that the UK and US needed to be practical and pragmatic on this issue. Where
983there are states that have an interest we should take the opportunity – even if it is just a few
984states.
985Cross-Cutting
98633. TF agreed. He explained that the US had filed a paper in 2013 during the TTIP
987negotiations. The view expressed there was that where regulators want to sign an
988agreement the government should let them – where they don’t there should not be pressure
989from government to do so. This approach shocked the EU. TF explained that this facilitative
990approach meant that the US has two dozen MRAs whereas at the time the EU had none.
991This approach means that regulators don’t have any fear that the federal government is
992trying to step on their toes and as a result they had been very successful.
99334. BR asked if the US had prioritised different sectors/professions in their “cheerleading”
994approach. TF explained that their approach was just the more the merrier.
99535. TF said the only role they actively take is to call the regulators in fields where there is a big
996interest from industry or the negotiating partner and ask if they are considering an MRA or
997talking to their counterparts.
99836. RFL asked how USTR stays hands off but engaged. HMG wants to support, enable and
999encourage but without stepping over the line to interference and appearing to take control
1000away.
100137. TF explained that USTR meets with industry and professional bodies constantly, but not
1002always through formalised processes. USTR lets the professions know that they are
1003available, and attends their regular meetings. There is interest from the professions in what
1004is going on with the US’ trading relationships, what is going on with Brexit for example. This
1005gives them the appetite to engage with the US government. The states and industry are
1006involved in the trade agreements and negotiations. They have a role in the formalised
1007review system. There is a role for cleared advisers and for representatives of every state.
1008All know that there is a way for information to be exchanged. 
1009OFFICIAL – SENSITIVE (UK eyes only)
1010
101126
101238. TF explained that the relationship between the states and the federal government means
1013that if USTR said it was their intention to issue federal licences for architects they “wouldn’t
1014survive a day”, the states take their autonomy in this area very seriously and there would be
1015“uproar”. RFL said that she understood this point, and recognised that this needs to be
1016about creating the right forums for the UK to engage with states and to facilitate the
1017engagement of the right professional bodies.
101839. TF said that the “fortunate thing” is that states largely did want to cooperate with trading
1019partners. In auditing the professional body sets out every year which their priority countries
1020are, and which countries they want to do deals with.
102140. Lizzie Chatterjee (LC) asked if USTR sees a trajectory towards reducing barriers to stateto-state movement within the professions. TF thought there was. In auditing it used to be
1022more difficult than it was now, there had been movement on this over the last few years.
1023Within the legal profession they saw more states developing tools to allow attorneys from
1024one state to act in another state. There had been a strong show in the nursing profession
1025where there were recently established compacts between 20 states. TF thought this might
1026be because there was more mobility now than there had been fifty years ago. He could not
1027think of anywhere where there were retrograde steps towards less movement between
1028states. TF said that as states were doing this they were also thinking at the same time
1029about individuals who had qualified in different countries.
103041. BR asked if the states worked together on other issues relating to the professions, whether
1031if an auditor is struck off in one state and tries to move to another is there a notification
1032requirement. TF said that states cooperate very closely on questions of professional
1033responsibility – there are computerised databases within some professionals (e.g. legal
1034profession).
1035Next Steps
103642. RFL asked how the UK and US should take this conversation forward and what might be
1037possible in an FTA context.
103843. TF said that both sides should bring their auditors into the conversation, particularly if there
1039are specific areas where the UK wants to move forward. He outlined that in the TTIP
1040process the US took their architecture auditors over to Brussels to sit down with the Cion
1041and EU regulators and encourage them to pursue an MRA. USTR said they were open to
1042doing similar but that all they could do is ask.
104344. TF suggested that there would need to be a conversation at some point about Market
1044Access and National Treatment. There would need to be a conversation in each sector and
1045they would focus very closely on what the UK’s plans are post-Brexit in the professional
1046services area. TF said that the US had “bumped into some unfortunate areas” in the EU as
1047a whole in this area. The US would be interested in whether the UK is planning to adopt the
1048EU approach in the future and this conversation would need to take place in the process of
1049preparations for an FTA.
105045. TF said that there is much in TISA that the US had brought across from TTIP. TF
1051suggested there is a lot in TISA that could be brought into a UK-US agreement. TF said
1052that the UK should take a look at Part II of the TISA Professional Services annex. This talks
1053about setting up a process for negotiating future MRAs and co-operation on mutual
1054recognition. TF said that this is the type of language the US would look for in a future FTA. 
1055OFFICIAL – SENSITIVE (UK eyes only)
1056
105727
1058The language “has a softness to it” because of the challenges the US has in enforcing trade
1059rules on its states.
106046. BR said that CETA could also be a guide. This sets up a model that professional bodies
1061can follow while still being relatively “soft”. TF said that the US’ general attitude towards
1062CETA is that it was too detailed for the US. This wasn’t inherently a problem, but they don’t
1063think that 14 pages of rules are necessary. This is something that can be discussed further
1064in April 2019.
106547. RFL asked how the NAFTA negotiations are progressing in this area. TF said that if DIT
1066looks at TPP and TISA it will have a good idea of what is in NAFTA. The US is moving as
1067quickly as it can on NAFTA. There are lots of MRAs already in place between the US and
1068Canada so it’s not highly controversial. TF said that the US always treats MRAs as part of
1069the cross-border services chapter rather than breaking it out into its own chapter. Pushed
1070on this TF said that the US would want to stick with its own structure and to have this
1071included as part of a cross-border chapter.
107248. RFL noted that the Australian model has a standalone chapter for this and that doing so
1073could be helpful in explaining to people how it works, giving people just one place to go in
1074an agreement rather than requiring a lot of cross-referencing. TF was reluctant arguing that
1075this had never been an issue for the US. The argument for doing so seemed based on
1076rhetoric rather than logic. RFL said DIT was looking into this.
107749. RFL asked if USTR undertakes communications work to explain how an FTA will benefit
1078professional services bodies. TF said this had never been a major concern.
107950. RFL asked if there is action in APEC on this issue. TD said this was less of a priority. A
1080number of APEC countries would not qualify any time soon as MRAs tend to focus on
1081developed countries. The US approach of leaving regulators largely to their own devices
1082meant that generally they wanted to agree MRAs with regulators they already know.
108351. TF said he wanted to flag legal services – there were not currently any MRAs in the legal
1084profession. BR said that DIT hears a lot from the UK profession of the complexity of
1085operating across different states. They experienced many different levels of permission to
1086act. There was interest in looking at what could be done in this area but awareness of how
1087difficult this would likely be. TF agreed that this is a complicated area. DC has a very liberal
1088fly in fly out rule, some states have very different rules – for example California is much
1089more closed. However, TF had been struck that the legal profession keeps approaching
1090him to say they want to ’do something’.
109152. BR suggested that this might be an area for both sides to take away to consider further. TF
1092agreed and said that at an appropriate point it might make sense for HMG and USG to sit
1093down with the professions on both sides to tease out exactly what they want the
1094governments to do. RFL commented that the UK legal profession has a very long list of
1095things they would like the parties to do and that she supports TF’s suggestion of bringing
1096them together as part of a future working group. She agreed that the legal sector would be
1097one of the most challenging areas, but the issues show it is worth looking at and it’s good to
1098hear there maybe interest on the US side. TF said that even if the parties do not come up
1099with something binding, devising a set of recommendations for good practice for facilitating
1100transnational practices could be a positive outcome. The state of Georgia had previously
1101published an international best practice toolkit that could be an interesting starting point. 
1102OFFICIAL – SENSITIVE (UK eyes only)
1103
110428
1105RFL said that the UK would not want to limit the level of ambition to this, but that it would be
1106good to get the professions round the table to set out their list of wants.
1107Trade in Services Agreement (TISA)
110853. RFL noted that TF mentioned TISA at a couple of points during the discussion and asked if
1109US thinking had developed since the US paused the discussions after the election. TF said
1110that the US remained focused on NAFTA in the first instance, especially on goods and the
1111problem with the trade imbalance on the goods side. The Administration had never been
1112hostile towards TISA and Congress remained enthusiastic about it, asking at every
1113opportunity. The Coalition of Services Industries continued to push the Administration
1114forward on this, but had been strategic in recent months raising in the right way. Lighthizer
1115was interested in studying it more and was very interested in ecommerce and digital issues.
1116TF noted that this was one area of progress in Buenos Aires at MC11 and that Lighthizer
1117was aware this was a big piece of TISA.
111854. However, TF suggested that the digital and data conversations within the EU continued to
1119present challenges. Officials face the following question from Lighthizer: “I could tell you to
1120go and negotiate TISA, but it sounds like the EU is still sorting itself out on data flows”. TF
1121said that Lighthizer is not hostile to TISA, but the Administration is still thinking about how it
1122fits into their overall scheme on trade.
112355. TF suggested that work on NAFTA was “rapidly accelerating” and that if that moved
1124towards conclusion it could free up a lot more resource to work on TISA. TF described
1125himself as being “guardedly optimistic” that at some point the US would begin to move
1126forward on this, perhaps at a slow pace initially, but that further political guidance was
1127required first. RFL asked for TF’s thoughts on timing. TF declined to give a set time frame
1128saying he did not want to mislead the UK as he could be total wrong in his impression of
1129the mood towards the agreement. As NAFTA progresses it seems more realistic that there
1130could be forward movement now than a year ago. Strong hints where made that the US
1131may reengaged ‘in the summer’.
113256. TF said the Administration’s “learning curve” on the importance of services, and the
1133potential advantages to the US had moved in the last 18 months. RFL noted that every time
1134SoS Fox sees USTR Lighthizer he raises TISA and that there is “huge enthusiasm” for the
1135agreement in the UK.
113657. TF asked about the UK’s status in TISA during the process of Brexit. RFL explained that
1137the UK sees itself as a member of TISA currently. TF asked if the UK sees TISA in a similar
1138way to the WTO. RFL replied that this was correct. The UK is already a member. As TISA
1139has paused we’re not able to have a conversation about the UK’s role within it. RFL noted
1140that HMG has always said that TISA is different to concluded bilateral agreements. The UK
1141sees itself as part of the agreement and would like to maintain that. Once conversations
1142begin again or active negotiations start the UK will discuss its status with other TiSA
1143parties. TF asked if TISA was unique in this regard. RFL explained that it is, and certainly
1144different to CETA as an existing EU agreement – TISA is a plurilateral agreement and an
1145ongoing negotiation. TF said he could see this logic but it would clearly be an issue to
1146agree, including with the EU.
114758. TF suggested that from March 2019 the UK would presumably have the right to come into
1148the room during TISA negotiations but the EU could argue that the UK should be treated as
1149China – or any other third country – and be held in the ‘waiting room’ by the EU. TF asked if 
1150OFFICIAL – SENSITIVE (UK eyes only)
1151
115229
1153HMG thought the EU would have the right to veto the UK’s position in the room. RFL said
1154that her hope was that the Cion would be pragmatic about moving the discussion forward
1155on TISA, as the US has regularly stated without the UK the value of the EU offer goes down
1156and the value of the overall agreement reduces for every member.
115759. TF said that the US would strongly support the UK’s presence in the room during the
1158negotiation but this would be dependent on the UK being able to support the US approach
1159where we had shared interest in the negotiation, which could include with the EU.
116060. TF explained that the practical concern for the US is that an ideal outcome for the US is to
1161have an independent UK as part of the TISA negotiations, speaking freely (and in line with
1162the US). He queried if it was worth the political capital to get the UK into the negotiating
1163room, or even restart negotiations before 2021. RFL said that until it looks like the
1164negotiations are about to re-start it would not be possible to have a detailed conversation
1165about this. RFL outline that given most of the challenging issues in TiSA had been resolved
1166this could be a fairly limited issue and the UK would want to access each issue in turn
1167based on its economic interests.
116861. TF said that in the context of TISA the US’ two big issues with the EU are on new services
1169and data flows. RFL said that she would take this point away. She would also be interested
1170to hear from USTR if there is a good moment for the SoS to reach out to USTR Lighthizer
1171on this.
1172Implementation Period
117362. TF asked to discuss the implications of the IP for recognition of professional qualifications.
1174In Chapter 3 of Article 25 of the Withdrawal Agreement TF had noticed that the article
1175covers citizens of the EU 27 and UK nationals, and asked about the reason for this
1176difference. TF noted that USTR had not yet had this conversation with the EU, but that the
1177US would not be the only country with an interest in this distinction. TF was concerned that
1178this might limit the rights of US workers, and dual nationals. TF’s understanding is that for
1179the IP a UK citizen or national will have the right under the MRPQ Directive to continue or
1180obtain licensure in the EU. GB confirmed that this understanding is correct; if the process of
1181licensure is under way before the end of the IP then it will be recognised permanently. GB
1182explained that this had been a point of contention in the UK but that it appeared that any
1183licence in train by 31 December 2020 would be grandfathered in forever. Other issues
1184would be have to be taken back to our experts.
118563. RFL explained that the position for the IP was that a British citizen based in France with
1186their licensure in train for France during the IP would have that grandfathered in forever, but
1187there is not a guarantee that they could use this in another EU Member State. This is just
1188the agreement for the IP and there will need to be a discussion about the future permanent
1189relationship during the negotiation this is getting underway now which will set the terms
1190going forward. TF asked if it was possible that the UK would negotiate the right of British
1191citizens holding a licence in France to allow them to work elsewhere in the EU. RFL
1192explained that it would need to be negotiated as part of the future relationship. TF said that
1193this was not reassuring, and that the EU does not have a lot of incentive to carry this
1194forward.
119564. RFL said she would take back the question of why there is a distinction between EU
1196citizens and UK nationals in the chapeau of Article 25.1. 
1197OFFICIAL – SENSITIVE (UK eyes only)
1198
119930
1200Action Items
1201• Secure copies of the US list of MRAs by state paper they submitted in TTIP from EU
1202reading room and OECD study
1203• Both sides agreed to take a pragmatic demand lead approach to MRAs, with flexibility for
1204both sides to persue agreements below national level, i.e. with specific states on specific
1205sector issues
1206• Set up a series of discussions between subsector bodies and regulators, covering audit,
1207Architects and legal as a starting point.
1208• Both sides will review CETA, TiSA, APEC and NAFTA Text as a starting point for future
1209commitments
1210• UK to follow up questions on the implementation period text on MRPQs and respond in
1211writing to the US
1212• Both sides to keep in close contact on next steps with TiSA
1213• Both sides to consider where they can work together to improve the trading environment for
1214professional services globally, looking at where are firms are facing the same challenges.
1215FOR INTERNAL DISTRIBUTION ONLY
1216Lead Negotiator Analysis/Comments
1217
1218A good discussion that lead to a meaningful way forward. Started with US reluctance to give any
1219suggestion that the federal Government play a role in these agreements. Accepting they could not
1220mandate or ‘force’ state level activity and using words like facilitate, engage and support saw a
1221step change in the tone of discussions. It became clear USTR do a huge amount to facilitate these
1222discussions. They have very close relationships with the relevant bodies and stakeholders that
1223enable them to track progress, identify priorities and facilitate discussions between bodies on both
1224sides. The agreement to take a pragmatic approach to gain traction with the states that mater, on
1225the sectors that matter to both sides will enable progress. This could be a real area for substantive
1226outcomes but will require some heavy lifting and facilitating that is resource intensive. Both the US
1227and AUS have dedicated PBS units and we will need to consider our model as we move into
1228negotiations.
1229The TiSA discussion was a very clear signal by USTR, that is echoed in recent US press, that they
1230are considering reengaging in the summer. They are going to ask for something in return for
1231supporting the UK continuing role in the negotiations, so this will require political level discussion.
1232Timing for the conclusion of negotiations against the UK relationship with the EU could become
1233problematic, we will try to influence this to ensure it happens during the IP period.
1234OFFICIAL – SENSITIVE (UK eyes only)
1235
123631
1237Title of Meeting: Intellectual Property
1238Date: 21 March 2018
1239Time: 14:00–16:30 (EDT)
1240Participants
1241Name Department/Directorate
1242Sophie Brice DIT – UK-US Trade Policy Team
1243Ada Igboemeka DIT – Sustainability
1244Mark Prince DIT – IP
1245Meg Trainor DExEU
1246Thomas Walkden IPO
1247Adam Williams IPO
1248Jennifer Blank USPTO
1249Sarah Bonner US - Small Business Administration
1250Miriam DeChant USPTO
1251Christine Peterson USTR
1252Rachel Salzman US - International Trade Administration
1253Michael Shapiro USPTO
1254Steven Shapiro FBI
1255Ian Sheridan US - State Department
1256Anne Snyder US - Department of Health and Human Services
1257Alexandra Whittaker USTR
1258Key Points to Note
1259• Stakeholder engagement on IP toolkit at US-UK SME Dialogue was positive and US-UK
1260collaboration will continue in this area, including ensuring the inclusion of IP in the next
1261SME Dialogue.
1262• The US outlined their approach to prosecuting trade secrets. While the UK noted that its
1263approach is different, it stressed that outcomes can be the same. The UK will produce a
1264paper outlining its approach on trade secrets.
1265• The US provided an overview of possible changes to US copyright legislation including the
1266Marrakesh Treaty Implementation Act and a cluster of bills aimed at improving the
1267efficiency of music licensing. The US will provide the UK with more details on these
1268potential changes.
1269• The US voiced concerns around the protection of US business’ EU trademarks in the UK
1270following EU exit. The UK provided assurance that it was working to ensure there would be
1271no gap and outlined some of the possible options being explored.
1272• There was agreement on the value of the US-UK collaboration on tackling illegal content
1273online which had taken place since TIWG2. This will continue and the UK will produce a
1274paper on its approach in this area.
1275• IP enforcement will be a focus at upcoming meetings.
1276OFFICIAL – SENSITIVE (UK eyes only)
1277
127832
1279Report of Discussions and Outcome
12801. Update on Intellectual Property (IP) toolkit and SME dialogue
1281MD (US) updated on the IP toolkit brochures, each tailored for a US or UK audience and designed
1282to raise awareness of key resources for SMEs to consider when exporting from the US to the UK
1283or vice-versa. Both are available online. All agreed that the promotion of the IP toolkit at the first
1284US-UK SME Dialogue went well. RS (US) noted that the event was oversubscribed and full despite
1285extreme weather conditions, and that the event had emphasised the operational value of the
1286toolkits for SMEs. AW (UK) noted the high level of engagement and interaction from SMEs on IP
1287issues at the session.
1288RS (US), MD (US) and AI (UK) remarked on the positive US/UK relationship on IP and the
1289collegiate process between the US and the UK’s IPO and DIT which built the toolkit over the last
1290six months. All agreed on the value of continuing to collaborate in this area and of leveraging the
1291toolkit to further promote awareness of existing resources. AW (UK) suggested assessing the
1292toolkits’ effectiveness and whether the toolkits are reaching the right people. MP (UK) proposed a
1293US-UK brainstorming call to follow-up on this discussion. It was agreed that a webinar moderated
1294discussion with SMEs would be held to further promote the toolkits. AW (UK) noted that UK trade
1295advisors could also help to further promote resources in this area to SMEs, and that it was
1296important to look more regionally in the UK.
1297During the earlier 21/03 TIWG3 SME session, it had been agreed that the second US-UK SME
1298Dialogue will be hosted in the UK; IP session attendees agreed to link with SME Dialogue leads to
1299ensure IP is incorporated. SB (US) noted that surveys will be conducted of SME stakeholders, and
1300that IP leads should link with survey leads to ensure IP is included. CP suggested that attendees
1301collate and share the key areas of questions from SMEs going forwards.
13022. Update on US & UK IPR systems and likely future changes
13032a) Defence Trade Secrets Act (2016)
1304CP (US) provided details on the implementation of the Defend Trade Secrets Act 2016. The Act did
1305not displace state laws which continue in parallel and often in conjunction.
1306The US presented the criminal case example of the Sinovel Wind Group prosecution. This was a
1307long case, initiated in 2011 and concluded early 2018. Sinovel was successfully convicted of
1308stealing semiconductor source codes from AMSC semiconductors. The theft had serious
1309implication on AMSC’s value and resulted in the loss of half of the company’s workforce.
1310Sentencing will take place shortly. SS (US) noted that the prosecution was not looking to hold the
1311individual employee accountable but to focus the prosecution on the company which incentivised
1312them to act.
1313The US presented the civil case example of Waymo vs. Uber relating to self-driving car technology.
1314An executive had left Waymo for a position at Uber, taking proprietary files. The parties settled,
1315with Uber agreeing not to use the proprietary information.
1316KP (US) observed that the Defend Trade Secrets Act was supported by industry as they wanted a
1317federal cause of action which in particular would allow for civil prosecution. It had taken several
1318years to enact with lots of negotiation on seizures. CP (US) noted that stakeholders see having
1319consistent right of action to prosecute trade secret misappropriation as crucial in the US and that
1320there is enormous stakeholder interest in seeing this pursued in trade policy; it is part of NAFTA
1321negotiations. In terms of difficulties caused for US business due to lack of a similar provision in 
1322OFFICIAL – SENSITIVE (UK eyes only)
1323
132433
1325other jurisdictions, KP (US) highlighted China and disparities such as the fact that in last year’s EU
1326directive trade secrets was not considered intellectual property whereas in the US it is. CP noted
1327that the OECD had indexed countries on trade secrets, with China ranking low. The US has also
1328had complaints on access to cause of action on trade secrets in Austria and India. On Austria, the
1329US is conducting further conversations to understand this better. On India, AW (UK) noted that the
1330challenge in India – like Indonesia - is access to justice, rather than any issue with the statute
1331books. AW (UK) noted that while issues are raised by UK stakeholders on access to justice in
1332other countries around trade secrets, with the exception of China the UK does not get the same
1333level of stakeholder interest as the US on the legislation around trade secrets in other countries,
1334perhaps due to sector skew.
1335AI, AW and TW (UK) noted that while the UK does not approach trade secrets in the same way as
1336the US, the outcomes can be the same. They highlighted the importance of outcomes from a trade
1337policy perspective. For example, in the UK the Computer Misuse Act or Fraud Act would cover the
1338criminal case mentioned, and are well known in policing and the prosecution service. The UK
1339agreed to provide a written summary on the UK’s approach to prosecuting trade secrets including
1340case examples. This will take place after 9 June when the UK will have implemented with the EU
1341directive. A follow-up VTC will be held for any questions.
13422b) Trade Facilitation and Trade Enforcement Act
1343The US presented on the Trade Facilitation and Trade Enforcement Act, which allows customs and
1344border protection to enforce IP rights at the US border. The Act enhances the exchange of
1345information relating to IP trade enforcement and allows for the seizure of circumvention devices.
1346The Act makes enforcement at the border for copyrights pending registration equivalent to that for
1347copyrights already registered. It requires the allocation of sufficient personnel, and the provision of
1348training and consultation. It also requires education, related to which the US described an IPR ad
1349campaign in US airports on dangers associated with buying counterfeit goods. This ran from July
1350to August 2017 and November to December 2017 and reached 202m people. It included
1351roadshows reaching 5,000 people in person. This campaign was planned prior to the Act as there
1352was existing authority for such activity, but the Act makes it mandatory. RA (US) does not believe
1353there are measures for gauging whether the US campaign is impacting buying but will confirm. The
1354suggestion was proposed that such activities in future could be something which stakeholders
1355might lead rather than the state.
1356AW (UK) and TW (UK) noted that the UK has run similar campaigns on counterfeit goods with
1357trading standards organisations, and has discussed this issue with other EU Member States. The
1358UK is planning to survey markets across the UK to gauge whether the campaigns are working.
1359The Act introduces amendments to S.301 such as empowering USTR to create action plans for
1360countries on the priority watch list and the President to take appropriate action in response to
1361countries failing to comply with benchmarks. CP (US) noted that USTR has always had strategies
1362surrounding these countries and that this change makes these more statutory and formalised in
1363nature.
1364MS (US) provided an overview of possible changes to US copyright legislation, noting that the
1365Administration has not yet weighed in. The Marrakesh Treaty Implementation Act was introduced
1366last week in the Senate Judiciary Committee. The legislation will make tweaks to the S.121
1367copyright exception for the blind and visually impaired, and will introduce a new S.121a applying to
1368the export/import aspect of Marrakesh. Hearings will be in mid-April. MS outlined a cluster of bills
1369with aimed at improving the efficiency of music licensing. The Music Modernisation Act attempts to
1370improve the statutory license system, with blanket licenses for all musical works. There is
1371significant music industry support and it is in the mark-up stage in congress. The CLASSICS Act 
1372OFFICIAL – SENSITIVE (UK eyes only)
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1375brings pre-1972 sound recordings – currently covered only by state law - partially under copyright
1376protection and digital audio protection. The AMP Act ensures music producers receive royalty
1377payments stemming from the digital recording of public performances. MS (US) will share details
1378on these possible copyright changes with TW (UK).
13792c) UK IP protection systems
1380AW (UK) and TW (UK) outlined the UK system for protecting IP.
1381Devolution is not a major factor for IP protection given the that IP protection is a reserved power
1382with a UK-wide framework. However, there are different legal systems in the Devolved
1383Administrations, so there are differences in how the rights are litigated, particularly in Northern
1384Ireland and Scotland. While decisions will be the same, court procedures differ. Cases can be
1385prosecuted in the Devolved Administrations if a company’s headquarters is in the Devolved
1386Administration or if the infringement occurred there.
1387The UK has long had a small claims court and small claims track for non-IP cases; it now also has
1388SME-friendly structures allowing for relatively cheap court access for IP cases. The UK’s IP
1389Enterprise Court gives SMEs access to court for small claims with a cost limit of £50k, with a
1390damages limit of £500k. The court has sentencing powers. The value limits mean that the IP
1391Enterprise Court tends to be used for copyright and trademark cases. It operates due to the
1392largesse of specialist IP judges who use case management techniques such as limits on levels of
1393discovery, limits on the amount of paperwork, and limits on hearing times. SMEs can still take
1394cases to the High Court should they wish. The UK has discussed this approach with China and
1395believes similar courts may be starting in Beijing and Shanghai. The UK also has a copyright
1396tribunal with a particular focus on licensing disputes pursued by consumers who believe they are
1397being overcharged, though the number of cases is low. While the UK offers ADR (Alternative
1398Dispute Resolution) and mediation, this is complimentary to the legal process rather than part of
1399the legal process itself. There is very low take-up for ADR on patents as claimants want the force
1400of the courts, though mediations which do take place have a high success rate. MS (US) noted that
1401the US Copyright Office conducted a 2013 small claims review, the recommendations from which
1402were incorporated into the CASE Act 2017. TW (UK) suggested that the UK could look into setting
1403up a call between UK and US judges to discuss the UK court system for IP protection.
1404CP voiced concern that US businesses may find their EU trademarks no longer protected in the UK
1405post-EU exit. AW (UK) noted that this is subject to the Withdrawal Agreement and other future
1406agreements. The UK is clear that the EU 28 trademark gives rights in the UK and that we will not
1407throw this away. Subject to negotiation, one option is that there will be a system in place whereby
1408companies with EU trademarks will be given UK trademarks either automatically or by application.
1409The UK trademarks would protect in the UK only and there would be an additional renewal fee,
1410though the length of time the EU trademark has been held would be recognised. Subject to further
1411discussion, there is also an option that the future economic partnership may see the UK remain in
1412the EU copyright framework. The UK is working to ensure there is no gap in protection, noting that
1413the UK also has a key interest in this as UK companies have lots of EU trademarks. CP noted that
1414the more automatic any process for granting UK trademarks the better, and that if an affirmative
1415step is required from the rights holder then as much notice as possible should be given.
14163. Discussion on IP protection for innovative pharmaceutical products
1417AS (US), JF (US) and Paolo (US) provided an overview of patent and pharmaceutical IP
1418protections. 
1419OFFICIAL – SENSITIVE (UK eyes only)
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1422Patent term adjustments compensate for USPTO delays and are available for all patents. Patent
1423term extensions are only available for products with pre-marketing regulatory approval such as
1424pharmaceuticals, medical devices and food additives. They apply to the whole patent. Conditions
1425include requirements that the patentee must request the extension (unlike adjustments which are
1426computed automatically). Additionally, the patent cannot have expired when the extension request
1427is filed, there can have been no previous extension, and it can also depend on how the product
1428relates to the patent. The extension is determined by the FDA and calculated as a half day
1429restoration for every day investigating new drug testing or a full day for every day while the
1430applicant was awaiting regulatory approval, up to a maximum extension of five years and
1431maximum total term of 14 years. The extension can be reduced if the applicant didn’t show due
1432diligence. AS (US) will provide detail to the UK on how often patent term extension and
1433adjustments are used (in terms of volume and proportion of patents) and will set up a call between
1434US and UK patent experts to discuss in more detail.
1435US provided an overview of pharmaceutical data protection. Agro chemicals have 10 years of
1436exclusivity; biologics have 12 years of exclusivity; and small molecules have 5 years of exclusivity.
1437The latter can be extended by new combinations. New clinical information – such as a new
1438indication, new formulations or new routes administration – has exclusivity of 3 years.
1439US outlined pharmaceutical dispute resolution mechanisms, which differ between small molecules
1440and biologics. Most of the steps by statute have a period of time associated with them of 30-45
1441days, with some exceptions noted below. The small molecule dispute process takes place through
1442the orange book of new drug applications (NDA), which is not reviewed by the FDA. If a company
1443submits an NDA for a generic then it will have to make a certification on whether the generic
1444infringes the patent for the drug referenced. And if certification means invalid or not infringed by
1445generic then the generic producer has an obligation to inform the patent/NDA owner of the generic
1446application submission. The patent holder who becomes aware of the application can notify the
1447generic producer that it intends to start legal action. The small molecule patent holder can seek a
1448form of preliminary injunction with an automatic 30-month stay. Following the 30-month stay or final
1449ruling by the court, the FDA can issue an approval - even if litigation hasn’t concluded.
1450In the biologics dispute resolution process, section 351(k) applicants have to provide a quote to the
1451biologic holder and inform of them of the biosimilar application. Once the sponsor of the original
1452drug is informed they have to provide a listing of the patents they feel are infringed. The biosimilar
1453applicant is informed and can then make certification of whether the biosimilar infringes those
1454patents. There is 60 days for the process of exchanging list patents and making certification on
1455whether it is believed that the patent is infringed. The biologics patent holder can start legal action
1456but has to limit to what is defined in the Biologics Price Competition and Innovation Act (BPCIA).
1457The biologics patent holder has to petition court should they want an injunction.
1458CP (US) noted the extensive US legislative history on biologics protection based on how long it
1459takes to develop drugs. Given the clinical data and trials required to support drug approval and
1460how many drugs do not make it to the application stage, term protection is intended to compensate
1461for the effort required to create the supporting dossier and encourage companies to innovate.
1462There have recently been calls for more protection for orphan drugs and paediatric diseases to
1463encourage innovation in those areas. The protection discussed is part of a larger ecosystem
1464including data protection for first generics. The biologics process allows biosimilars to enter the
1465market without submitting an NDA from scratch, allowing them to get to market more quickly.
1466AW (UK) noted that the UK looks at this issue from the perspective of balancing incentives for
1467generics and incentives for innovation. The UK allows patent term extensions via protection
1468certificates, though this is a separate right that enters into force once the patent expires. The UK 
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1472exclusivity period is 5 years, while paediatric products can get an extra 6 months of exclusivity
1473given that they have a slightly longer regulatory process. This exclusivity only applies to products
1474with active ingredients, and therefore does not apply to medical devices. The UK recognises the
1475importance of SPCs, and the fact that pharmaceutical companies will have made decisions years
1476before the EU exit vote. The UK will have the right to issue once we leave the EU.
1477The UK suggested further discussions on the impact of US pharmaceutical data protection
1478systems on generic entry and drug pricing would be valuable, and US suggested discussions on
1479US legislative history behind the biologic protection period would be interesting to cover. The UK
1480will invite MHRA to participate in follow-up discussions as they lead for the UK on data exclusivity.
1481CP (US) inquired on whether the UK was participating in the European Commission’s ongoing
1482pharmaceuticals incentive review, on which the US has heard concerns from pharmaceutical and
1483biotech companies regarding some of the likely proposals. AW (UK) noted that the UK is working
1484through it, that it may impact SPCs, and that they have concerns on the economic evidence behind
1485of some of the changes. The UK is aware of the review as an area of concern for stakeholders.
14864. Discussion on ways to combat illicit intellectual property content online that is hosted in
1487either UK/US
1488The US’s Intellectual Property Rights Centre (IPRC) was initiated in 2010 and focuses on
1489investigations, outreach and training to counter IP theft, including countering the online distribution
1490of counterfeit and copyright materials. IPRC’s initial strategy was to close websites but it
1491encountered a ‘whack-a-mole’ effect, whereby hundreds of websites would subsequently appear
1492when one was closed. It therefore began to target individuals and their assets, and found that –
1493despite US website domains - the individuals responsible often operated outside the US,
1494sometimes in countries where the US does not have good law enforcement cooperation. Unlike the
1495UK, the US cannot ask a registry to take down a website without a federal court order. For
1496websites seized, IPRC redirects users to a seizure warrant which serves to educate. IPRC works
1497with Interpol and Europol, and since 2012 has had numerous Europol joint initiatives supported by
1498the UK. IPRC has involved rights holders, who patrol the internet for infringing materials and report
1499such materials. IPRC highlights the benefits of publicising law enforcement and industry
1500collaboration. US shared a case study of a music file sharing website based on international
1501servers which made money from subscriptions and advertising. The US had international
1502cooperation in evidence gathering and was able to prosecute the individual responsible who was
1503given a 3-year prison sentence. In FY16 IPRC seized 199 websites and had 7 arrests; in 2017 this
1504increased to 1,121 website seizures and 10 arrests.
1505AW (UK) noted that the UK’s activity in this area includes collaboration with the US and bringing up
1506messages when a website is seized informing the user that the content is illicit and redirecting
1507them to where they can buy the content legitimately. Search engines in the UK have agreed to put
1508infringing content far down their results. AW (UK) flagged the importance of goodwill from
1509businesses involved. He emphasized that businesses need to instruct advertising placement
1510agencies that they do not want their advertisements to go to illegal websites. TW (UK) noted that
1511the UK’s Intellectual Property Crime Unit runs Operation Creative to identify these websites to
1512advertisers.
1513During the November meeting SS (US) highlighted the potential for collaboration on illicit streaming
1514devices and wider discussion on infringing content online. There was a discussion in December
1515and a workshop in February, with the decision taken that the group should continue. It was agreed
1516that the group’s actions to disrupt and deter illicit activity would start with live sporting events. The
1517last call had included broadcasting and tech experts, and European IP prosecutors. MP (UK) 
1518OFFICIAL – SENSITIVE (UK eyes only)
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152037
1521suggested the group could link with business as a next step. CP noted that the US/UK dialogue in
1522this area has helped the US as they implement some of more longstanding trade policy
1523mechanisms.
1524The UK will produce a discussion paper on the UK’s activities for tackling illegal content online
1525relating to website blocking, takedown, domain registration and advertising. It will also touch on
1526other areas and – should the US want more detail – the UK will link the US to the UK enforcement
1527team.
15285. Update and next steps on the STO Workplan
1529US and UK teams ran through the work plan with updates from the November 2017 TIWG2
1530meeting. It was agreed that positive progress had been made to date, via the IP Toolkit and SME
1531Dialogue IP panel. Agreed to seek out further areas for collaboration in the future.
1532Action Items
1533Actions agreed and confirmed by follow-up email with USTR
15341. SME Dialogue – IP panel
1535• Agreed that the SME dialogue was successful and provided a good platform to discuss IP
1536and launch the Toolkits.
1537• Agreed to continue to work with the SME workstream towards the next SME dialogue
1538(London, date TBC, but likely to be aligned to the next working group)
1539• Next steps – Ensure that the Toolkits are distributed to SMEs at suitable events and via
1540public engagement sessions. Ideas include: Trade shows, Education chat sessions,
1541Webinars, online links/resources, SME starter packs. Bring together existing distribution
1542channels including: ITI (division of DIT), UK and USA IP attaches, Small Business
1543Association events.
1544• ACTION – Setup a brainstorming call to discuss details of distribution plan – MP to arrange
1545with Miriam Dechant (Scheduled for 12th April)
15462. Updates on the U.S. and UK IPR system
1547• ACTION – UK to produce a paper outlining how the UK Trade Secrets system works –
1548TW/MP
1549• ACTION – Arrange VTC to discuss Trade Secrets paper – MP
1550• ACTION – Arrange call with Mike Shapiro to discuss the Music Industry Bills in further detail
1551– MP
15523. IP protection for pharmaceuticals in the U.S. and UK
1553• ACTION – Follow-up discussion to be arranged between US & UK patent leads and MHRA,
1554DHSC, OLS at TIWG 4 – MP
15554. Discussion on ways to combat web pages with illicit material that are hosted in either the
1556UK or the United States
1557• ACTION – Potential Enforcement theme for TIWG 4 – MP/CP to discuss
15585. Short term outcomes: review of work plan and next steps
1559• ACTION – Setup VC for Joint Economic Study in early April – MP (Scheduled for 11th April)
1560OFFICIAL – SENSITIVE (UK eyes only)
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156238
1563• ACTION – Review the STO Workplan one-pager (MP and CP shared respective versions).
1564Continue to share latest version prior to TIWGs. – MP to send UK draft to CP prior to TIWG
15654.
1566Other actions/follow-up
15671. SME Dialogue – IP Panel
1568a. Potential Action - A moderated webinar discussion with SMEs will subsequently be
1569held to promote the toolkits. US and UK to share key questions they receive from
1570SMEs on IP. – MP to discuss with JF/KM
1571b. ACTION - IP session attendees will link with leads (JF/KM) on second SME
1572Dialogue to ensure IP incorporated. – MP
15732. Updates on the U.S. and UK IPR system
1574a. US will confirm whether there are any systems in place for gauging the
1575effectiveness of their campaigns on counterfeit goods.
1576b. US will share further details on possible US copyright legislation changes with the
1577UK.
1578c. UK will explore the potential of setting up a call between UK and US judges to
1579discuss the UK court system for IP protection in more detail. – To be discussed
1580between AW/AI/TW/MP
15813. IP protection for pharmaceuticals in the U.S. and UK
1582a. US will provide detail to the UK on how often patent term extensions and
1583adjustments are used (in terms of volume and proportion of patents) and will set up
1584a call between US and UK patent experts to discuss in more detail.
1585b. The UK suggested further discussions on the impact of US pharmaceutical data
1586protection systems on generic entry and drug pricing would be valuable, and US
1587suggested discussions on US legislative history behind the biologic protection
1588period would be interesting to cover.
15894. Discussion on ways to combat web pages with illicit material that are hosted in either the
1590UK or the United States
1591a. ACTION - The UK will produce a discussion paper on the UK’s activities for tackling
1592illegal content online relating to website blocking, takedown, domain registration and
1593advertising. It will also touch on other areas and – should the US want more detail –
1594the UK will link the US to the UK enforcement team. – TW/MP to discuss
1595b. US-UK group collaborating on tackling copyright infringing materials will continue,
1596linking with business as a next step.
1597c. Potential Enforcement theme for Q3/4 2018 working groups
1598FOR INTERNAL DISTRIBUTION ONLY
1599Lead Negotiator Analysis/Comments
1600
1601• Positive atmosphere, benefitting from significant progress on STOs and rapport built over
1602TIWG 1 & 2 + calls/VCs held in the interim.
1603• An extensive discussion covering several large policy areas. The US are eager to engage
1604and discuss policy in-depth. We should be aiming to engage in more in-depth discussion on
1605how the UK system works eg on pharmaceutical protections as a means of positioning
1606ourselves in relation to future US asks. This session was a start and we should aim to make 
1607OFFICIAL – SENSITIVE (UK eyes only)
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160939
1610further progress on this in the lead up to the next WG. This will require engagement from
1611key experts. We should also aim to focus discussions at the next Working Group on some
1612of our offensive interests. This opens up the potential for topic specific sessions at TIWG 4
1613and several workstreams highlighted in the action points above to drive forward positioning
1614during Apr/May/Jun 18.
1615• We should also adopt the case study method used by USTR, which incorporated
1616highlighting business-based examples and illustrating specific policy points. Used
1617effectively this could help outline UK policy interests in future working groups. 
1618OFFICIAL – SENSITIVE (UK eyes only)
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162040
1621Title of Meeting: Services and Investment Session
1622Date: March 22, 2018
1623Time: 9:00am
1624Participants
1625(Please list both UK and US participants, even if joining via VTC or conference call)
1626Name Department/Directorate
1627Thomas H. Fine USTR, Director, Services and Investment
1628Robert S. Tanner USTR, Director, Services and Investment
1629Matthew P. Jaffe USTR, Associate General Counsel
1630Lauren A. Mandell Deputy Asst. USTR for Investment
1631Elizabeth Wewerka US Dept of State, European Bureau
1632Lola Fadina DIT – Investment
1633Matt Ashworth DIT – Investment
1634Rebecca Fisher-Lamb DIT – Services
1635Ben Rake DIT – Services
1636Jaya Choraria HMT
1637Janet Shannon (sp?) US interlocutor
1638Matt Sullivan US Treasury
1639Key Points to Note
1640The attached note should be read with significant caution. The discussion was a presentation of
1641the US approach, with the UK focus on trying to move the discussion onto investment rather than
1642really probe the US approach. As such the below hides a number of weaknesses in the US
1643approach. It is not an accurate portrayal of the strengths and weaknesses between negative or
1644positive listing in services. It is also misleading on a number of the issues that occurred in the TTIP
1645negotiations. It is however a good outline of the US position on both services and investment
1646Report of Discussions and Outcome
1647Thomas Fine (TF), Director of Services and Investment at USTR, led the discussion on the US
1648side.
1649TF: Thank you all for coming. We look forward to having a fairly general discussion on services
1650and investment based on past Trade Working Group meetings. I plan to give an overview of the
1651US’ Non-Conforming Measures (NCM), or “negative list,” approach to FTAs, particularly as regards
1652the services and investment chapters. There is so much overlap in our FTAs between the
1653investment and services disciplines. As we run this conversation, let’s open it up to experts on their
1654patches so they can talk directly. Let’s build on our conversation in London last time, where the 5-
1655chapter approach was discussed. To reiterate, the 5-chapter approach was:
16561. Investment
16572. Cross-border services
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166041
16613. Financial services
16624. Telecommunications
16635. “E-commerce chapter,” aka digital trade chapter
1664Today, we will focus on the investment and cross-border services chapters. In future meetings, we
1665may need to focus more in-depth on financial services, but we thought would leave financial
1666services out for now because the approach to the financial services chapter is a bit different.
1667The “NCM” or “negative list” approach is different from the General Agreement on Trade in
1668Services (GATS) approach because it contains additional disciplines not included in the GATS
1669framework. The NCM approach includes market access, national treatment, nationality of board
1670members, local presence, and performance requirements. In contrast, GATS has only market
1671access and national treatment requirements.
1672Since the Uruguay round, many other nations have argued for following the GATS-based approach
1673as the traditional approach, while NCM was a newer, less-established approach. However, this
1674was and remains untrue because these two approaches grew up in parallel in the mid-90s, around
1675the same time as NAFTA. We in the US believe the NCM approach is now more common that the
1676GATS approach.
1677Rebecca Fisher-Lamb (RF-L): Why had the NCM approach proven challenging when negotiating
1678the TTIP agreement with the EU?
1679TF: We in the US are wedded to a negative list approach. There is the unfortunate experience of
1680sectors being left behind as they can’t find themselves in the CPC from 1991. Also, GATS
1681commitments are of such low quality that positive listing feels like a poor use of our time. Most
1682fundamentally, though, positive listing creates a very different dynamic within the actual
1683negotiations.
1684The EU pointed out that the US’s negative approach has hybrid aspects and that the US ‘weren’t
1685as pure as the snow’. Tom said that we could have this debate. On the EU’s part, their insistence
1686on using a positive list system was largely rhetorical because it was clear that they were willing to
1687make much deeper positive list commitments than most WTO countries. In some ways, the GATS
1688has positive listing embedded in ways that people don’t want to admit e.g. MFN is done on a
1689negative list, e.g. once commitments are taken in a sector it then flips to “none except…”, A pure
1690positive list seems impossible.
1691It was as much of a political issue as anything within the EU. There were assumptions from the EU
1692that making any commitments on a negative list basis would limit the government’s ability to selfregulate and make decisions in their people’s interests. However, we in the US didn’t find that
1693approach particularly effective. In part, we felt that a negative list was inevitable because once
1694you’ve taken a commitment for a sector under GATS, you then wind up having to do a negative list
1695of what would be excluded within that sector anyway.
1696In any event, the basic objectives of the NCM approach, from the US perspective, are:
16971. To achieve freer trade
1698a. The US thinks the NCM approach incentivizes freer trade, because the assumption
1699is that everything is included unless something is explicitly excluded. This is the
1700opposite of the assumption made by a positive list. The NCM approach makes total
1701market access the baseline assumption of the trade negotiations and requires
1702countries to identify exclusions, not the other way around.
1703b. The positive list approach tends to lead to a lot of strange situations where
1704commitments are not taken in particular areas. USTR had “endless fun” with the EU 
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170742
1708over their refusal to commit on various sectors. The EU could never wrap their
1709minds around this situation. They kept asking for US priorities, which was not
1710something the US was asking for, and therefore not something we would or could
1711offer up. The US wanted total market access to be the baseline, and the EU simply
1712didn’t understand that. It led to stalemate in the negotiating process.
1713RF-L: How does the NCM process lead to a more outcomes-focussed discussion?
1714TF: It creates the baseline of complete openness, and then you build from there—not the other
1715way around.
1716During TTIP negotiations, the EU wanted to identify a few big prizes to take home, but that wasn’t
1717the case for the US. What the US wants in FTAs is confirmation that new barriers to US companies
1718won’t be thrown up—that there won’t be surprises in the future. So it’s a fundamentally different
1719kind of conversation.
1720The US approach is aimed at preventing technical barriers to trade in services, while the EU
1721approach felt more aimed at gaining access to particular sectors. The US is focused on locking-in
1722existing market access and does not expect new market access in a specific sector be an outcome
1723of any FTA negotiation.
17242. To more closely reflect “realities”
17253. To secure future liberalisation through the ratchet
1726a. The ratchet approach basically means that, should a new standard be agreed that
1727allows for greater liberalisation in any area, then that new, more liberal standard
1728automatically becomes the new standard from the US perspective. As such,
1729standards continuously “ratchet” upwards from “standstills,” as newer, more liberal
1730deals are secured.
1731b. The NCM approach also allows for no gaps in sector coverage.
1732c. In the US, our FTAs in the services and investment areas are commitments that we
1733won’t be placing new barriers to any foreign businesses. So the EU’s positive list
1734approach didn’t fit with US objectives and was particularly unpalatable for US
1735political leaders. It struck them as untenable to have an FTA partner who had the
1736ability to impose new discriminatory measures against us.
17374. To provide clarity for traders and investors
1738a. NCM annexes contain consolidated snapshots of the restrictive measures in a
1739particular sector. Businesses find this kind of knowledge and transparency highly
1740valuable.
1741b. Positive lists don’t allow for that kind of knowledge or overview, because it’s
1742impossible to know, after the fact, why that sector wasn’t included in the positive list.
1743For instance, was it a political issue, or did negotiators simply not get to it in time?
1744RF-L: Do businesses really read these lists?
1745TF: Yes, they do. Cleared advisors read the list itself when the negotiations are live.
1746Lauren Mandell (LM): While NAFTA negotiations are underway, cleared advisors have the benefit
1747of looking at the NCMs in TPP and seeing if they remain an accurate characterization.
1748RF-L: The political input from NGOs on the EU side was a significant contributor to the broader
1749issues we’ve discussed here. 
1750OFFICIAL – SENSITIVE (UK eyes only)
1751
175243
1753TF: We understand how 700-page annexes can seem intimidating, as well!
1754RF-L: In your NAFTA renegotiations with Mexico, are you seeing them utilise different negotiating
1755tactics as they negotiate with the US versus when they negotiate with the EU?
1756LM: We can’t discuss ongoing negotiations.
1757TF: The typical cross-border services chapter obligations include:
17581. National treatment
17592. MFN treatment
17603. Market Access
17614. Local Presence
1762Under GATS, local presence was treated as, “there must be a local agent to provide services.” But
1763ultimately, was that about market access or national treatment? There was an extent to which it
1764was both, as well as an extent to which neither applied. This was particularly problematic for the
1765US because sometimes these restrictions can apply to US states. In the US, our long history of
1766interstate commerce being totally open, under the Commerce Clause, made that kind of statebased footprint really tough. There seems to be a lot of support for adding a local presence
1767requirement.
1768LM: On performance requirements, we in the US were mostly on the same page as EU during
1769TTIP negotiations, especially when those performance requirements were targeted and clear.
1770Lola Fadina (LF): are the investment protection elements focused on establishing a global
1771framework or are there particular issues that you see in the UK?
1772LM: We obviously don’t think the UK would treat a US business poorly, there’s just a track record,
1773much more broadly, of US businesses being treated badly overseas. We believe in narrow,
1774transparent exceptions to those rules.
1775RF-L: Was TISA unique?
1776TF: Yes, because we wanted to have a monopoly on understanding TISA because no one else will
1777ever be able to read these schedules—I’m kidding, of course.
1778RFL: Have you ever allowed an FTA partner to veer from an NCM approach?
1779TF: I don’t think so. The EU is comfortable with varying from that, but we have never done so.
1780LM: Our view is that each obligation—national treatment, most-favoured-nation (MFN) status, et
1781cetera—needs to be calibrated in a way that allows for legislation to be made in the public’s
1782interest. If you look at MST (Minimum Standards of Treatment - MST), at the article on CIL
1783(Customary International Law), we take an article-by-article approach. In the US, we question: first,
1784what is the legal effect of that language? Any third party will need to be able to understand it. Also,
1785we’re aware of the need for consistency in any language that is linked across chapters —that
1786would also influence a third party tribunal in its decisions. But we do respect and understand other
1787nations’ concerns. We’ve put stuff in the preamble of agreements, like GATS, saying that the right
1788to regulate is understood. The US approach and preference is to think through the full lifecycle of
1789the investment. Pre-established national treatment is crucial and post-established only national
1790treatment causes major difficulties in market access and has proven problematic in a number of
1791other ways. 
1792OFFICIAL – SENSITIVE (UK eyes only)
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179444
1795LF: Could you describe more about the differences between the US and EU approaches to nondiscrimination and MST?
1796LM: The US’ approach on MST is that firstly, it’s tethered to CIL, and secondly, that CIL evolves
1797over time, so we’re not willing to commit to a closed list. The EU instead say its fair and equitable
1798treatment clause is an autonomous standard not tethered to CIL and that it’s a list—a long list—
1799that is fairly closed. Our view is that having a standard linked to CIL provided critical guidance to an
1800ISDS panel. The EU approach is more risky in terms of potential claims as it opens up new
1801avenues for claims not covered by CIL.
1802LM: We have not recognised a great deal of the EU’s standards on gender discrimination, et cetera
1803simply because they are not included in CIL.
1804TF: Let’s dive deeper into the NCM approach. First, in Annex 1, it’s determined whether an existing
1805measure is inconsistent with a discipline. This is where our trading partners set out the areas they
1806may take as exclusions. There are then two main questions:
18071. Has it been scheduled?
1808a. Are there any existing NCMs maintained by a central, regional, or local government
1809which need to be included?
18102. Has it changed, subsequent to the FTA?
1811a. Paragraph B is about measures that were continued, or effectively continued, from
1812the status quo.
1813b. Paragraph C talks about the ratchet mechanism—what happens if changes are
1814introduced that improve access.
1815RF-L: Were the EU comfortable with this approach?
1816TF: No, but it was a constructive conversation. There were lots of debates about what “regional”
1817versus “central” versus “local” levels of government meant. Finally, everyone acknowledged that
1818these three levels don’t really work with the EU. USTR look forward to talking to UK regarding
1819whether devolution in the UK will constitute regional government, or another level of government.
1820Generally, we in the US don’t have that many Annex 1 NCMs—there are not many secrets.
1821LM: Our main effort when doing an FTA is to make sure there hasn’t been retrenchment in a
1822certain area and that it still reflects the level of liberalisation in that area.
1823RF-L: How do we make sure that everyone at all levels of government understands this?
1824TF: It’s easier in the US because the states all have precedent of being unable to erect trade
1825barriers against each other, so they just continue those same practices with foreign partners. If
1826you’re having any problems on a state level, though, please do let us know!
1827LM: In our system, the Commerce Clause Constitutionally enshrines this lack of trade barriers
1828between the states.
1829TF: If a state is imposing restrictions on UK businesses, it’s a Constitutional issue before it’s an
1830FTA issue. If this is happening, we’re just not hearing about it. All we’ve heard about are little
1831issues like undertakers in Mississippi, et cetera. That’s why we typically provide an illustrative list of
1832all state measures—to be as transparent as possible, not because there’s a legal requirement. For
1833example, look at the TTIP Annex 1 NCM for customs brokers, where the US made an exception
1834requiring customs brokers to be both US citizens and locally based—so requirements for national
1835treatment and local presence. We made a law, 19 U.S. Code § 1641(b) for the provision, which 
1836OFFICIAL – SENSITIVE (UK eyes only)
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183845
1839includes a description in Annex 1. Descriptions for all provisions are included in Annex 1 to provide
1840transparency, not to demonstrate all the legal intricacies—for that, people should refer to the law
1841itself.
1842Jaya Choraria (JC): What happens when the law is updated? Do the annexes become out of
1843date?
1844TF: Because our FTAs automatically ratchet, to the extent that areas get more liberalised, there is
1845overall improvement.
1846The other annex is Annex 2, which is for policy or political sensitivity exclusions. Annex 2 is for the
1847areas where there’s judgment, in the view of a trading partner, that they’ll need space for future
1848regulations. Our approach to Annex 2 is to ensure there are a limited consistent set of protections
1849for a few key areas that are legitimately required. The length of the Annex 2 section in TTIP was of
1850concern to the US.
1851RF-L: Could you speak more to US concerns regarding the Annex 2 exclusions proposed by the
1852EU in TTIP negotiations?
1853TF: Our concern was always about the scope and the complexity of the EU offer. The real question
1854was, why do you need Annex 2 reservations for quite so many things? There are exceptions in
1855GATS, TISA et cetera that apply to the UK and EU that don’t make a lot of sense to us here in the
1856US. A lot of effort goes in to the drafting of the NCM annexes here at USTR, specifically into
1857limiting them as far as is possible. This caused a great deal of difficulty in the actual drafting of
1858TTIP, meaning it had to be heavily lawyered.
1859More broadly, our experience was that the EU’s process was to propose exclusions before running
1860them by their legal team, whereas the process was the opposite in US—all potential exclusions are
1861heavily vetted by US lawyers before being brought to the negotiating table. As a result, there were
1862those in the EU who saw the US’ approach as overly legalistic, while there were those from the US
1863viewed the EU’s approach as imprecise.
1864Moreover, the EU was willing to negotiate CETA on a negative list basis, so there is precedent for
1865the EU engaging in negative list trade negotiations— so it was frustrating not to see the EU offer in
1866this format for tactical reasons, as we knew they could move to this approach.
1867Matt Ashworth (MA): Let’s dive in to the investment side. From our perspective, we’re in the
1868process of developing our approach to UK trade and investment policy. We have agreed with
1869Ministers that we’ll take a more objectives and outcomes-focussed approach to these discussions.
1870We’re a liberal economy in terms of FDI and that’s our perspective. Where investment goes trade
1871follows, so we’re very interested in what we can do to encourage investment flows. We’re looking
1872at typical protections e.g. against unfair treatment, due process and compensation for
1873expropriation; as well as reaffirming the government’s right to regulate in the public interest. So
1874we’re keen to understand the US perspective on what you hope to get out of an agreement on
1875investment.
1876LF: We’ve also keen to hear more about how the ongoing NAFTA talks are progressing and in
1877particular about the US proposals on ISDS.
1878LM: As far as investor-state dispute settlement (ISDS), that’s guided by Congress, which sets very
1879specific rules in TPA. We are always guided by TPA and that has never changed. Associated with
1880the right to regulate are concerns within the US about sovereignty, as you’ll have heard yesterday 
1881OFFICIAL – SENSITIVE (UK eyes only)
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188346
1884in USTR Lighthizer’s testimony. We’re ensuring that US sovereignty is not eroded, and that’s a
1885very significant priority for us. We’re protecting investors overseas and promoting investment
1886overseas, but as a government we don’t want to create undue market incentives which encourage
1887jobs to be moved overseas. Some of the questions we’re grappling with are: what is the sovereign
1888risk? Are we creating an imbalance of incentives for companies to invest locally? However, many
1889of our conversations on NAFTA are very specific to our experience with NAFTA and shouldn’t
1890necessarily be read outside of that context.
1891LF: It’s well-known the US is approaching an opt-in approach on ISDS with NAFTA, but the TPA
1892language is very particular to pursue meaningful measures to ensuring investors have access to
1893dispute settlement. How do you square these positions with the language being taken in NAFTA?
1894LM: We are not thinking of pursuing an approach of opt-in to ISDS with the UK, which is to say that
1895these decisions have simply not been made here at USTR. We can’t say anything specific about
1896this yet, in the event that we negotiate an FTA. We have two very strong economies that uphold
1897the rule of law and we each have very strong legal systems. We view this as an opportunity to
1898create a platform for high standards that we encourage other parties to adopt in the future. One
1899example is technology localisation, meaning that you can’t require an investor, as a condition of
1900investing, to use local technology. This proposal comes from lots of US business feedback about
1901US businesses struggling under these requirements. We view these kinds of cutting-edge practices
1902as something we could pursue with the UK if we decide to pursue the FTA route.
1903Matthew Jaffe (MJ): To clarify, we’re not legally bound to follow TPA, but if we want its benefits we
1904should follow it.
1905LM: We have a complex annex that explains the difference between legitimate regulation and
1906expropriation. The question is really whether it destroys the value of the investment, so legally
1907determining the threshold of “destruction.” For example, there was a $90 million Californian
1908company whose value was reduced to $15m, but that was still not considered as having met the
1909threshold of “destruction” and therefore the company earned no compensation from the ISDS
1910panel. Expropriation cannot apply to pre-establishment. But a lot of the questions that the EU has
1911raised about the cost and ethics of arbitrators, transparency, and possible duplication of cases
1912across jurisdictions are issues we in the US have been looking at seriously for a long time.
1913LF: Some would argue that CETA seems to have begun to address some of these issues.
1914LM: And to be fair, we do think that some of these concerns are valid. But I would say that they are
1915probably less open than we were.
1916LF: this is also an issue that is being discussed at the multilateral level in UNCITRAL. It would be
1917useful to consider how we can work together on this.
1918TF: Our sense is that each of these U.S-UK conversations is getting more detailed, and this
1919certainly seems to be a big leap from where we were in the fall. In the short and medium term, we
1920can start telling you what our text will look like, and we’ll start talking about specific sectors and
1921reservations. We’re also very conscious that financial services and digital trade are going to have
1922to be a big focus of our future work and that those conversations are very different in many regards
1923Robert Tanner (RT): We’ll need some serious discussions on telecoms in the future as well.
1924RF-L: This is significantly more depth than we’ve been in ever before in our discussions. 
1925OFFICIAL – SENSITIVE (UK eyes only)
1926
192747
1928TF: We very much agree and are happy for the UK to guide us about the speed of these talks.
1929Quarterly meetings may possibly be too frequent, although there are those who disagree with us. If
1930we’re actually hoping to have text pretty much laid out by 2019 then we will need more, longer
1931conversations and we’ll be happy with that—we’ll even encourage it.
1932RF-L: Which are the most useful areas for us to start discussion early? Let’s get to the point of
1933having a more in-depth conversation on digital early, ideally at the next working group. On the
1934broader services side, we’re at the point of trying to build our thinking, and we’re having
1935conversations across Government and with business about our approach. We have advanced the
1936conversation significantly and hope to have a more detailed discussion on services in the fall.
1937JC: We also look forward to having more detailed discussions on financial services ideally at the
1938next working group.
1939TF: Yes, it has been good to have our US Treasury colleagues here and we should have a focused
1940discussion on financial services in the not to distance future. There are also wider financial
1941services issues being discussed outside of our USTR space.
1942TF: From our perspective, we’re largely in your hands. We’ve been deliberately holding ourselves
1943back conscious that you are restrained until you sort things out with Brexit. But what that means is
1944that normally we would have been far more advanced at this point. So if you become comfortable
1945with specific areas of text, such as comparing and contrasting reservations you might need with
1946reservations the EU took on your behalf or as a whole, then let’s talk about it. We can also discuss
1947past reservations the US has made in previous FTAs. At some point we’ll need to look to our
1948lawyers and say “when do we need to notify Congress?” We understand that you’re not entirely at
1949liberty to have negotiations, but you’re a special and important trading partner with whom we have
1950a deep shared history. As there are developments with your departure from the EU, we have lots of
1951investors who are interested in these ramifications for their businesses, so we will necessarily have
1952more to talk about.
1953RF-L: We appreciate your patience as we move forward with these discussions. Are you also
1954talking to the EU about what Brexit means for US investors?
1955TF: Yes, but these conversations are less in-depth because we don’t have the same forum
1956because TTIP is on ice. We’re going to have to ramp those conversations up as it becomes more
1957and more clear what the picture is. Up until December, it was unclear what the picture was, so over
1958the past three months we’ve seen a lot of movement. We’re aware there are still a number of
1959ongoing issues to resolve. For example, the Northern Ireland question hasn’t been addressed, so
1960we’ll be raising it and they’re certainly aware of it. We’d be more than happy to discuss any more of
1961this with you all further, and look forward to continuing these conversations in the weeks and
1962months ahead. Thank you all again for coming.
1963Action Items
19641. DIT to follow up with DExEU on how US investors may be impacted by the outcomes of the
1965withdrawal agreement – Rebecca Fisher Lamb
19662. DIT Digital Team to follow up with Rob Tanner to agree approach to next working group –
1967Rebecca Fisher Lamb/ Chris Woodward
19683. DIT and HMT to agree approach to proposing a focused FS discussion at next working
1969group to USTR and UST – Rebecca Fisher Lamb/ Jaya Choraria
1970OFFICIAL – SENSITIVE (UK eyes only)
1971
197248
19734. DIT Services Team to agree with Tom Finn the sequence of future services discussions,
1974including engagement on GATS – Rebecca Fisher Lamb
1975FOR INTERNAL DISTRIBUTION ONLY
1976Lead Negotiator Analysis/Comments
1977The atmosphere was good, with a number of staff having long standing relationships with the US
1978team from TTIP and TiSA negotiations. The dynamics on the US side where interesting to watch,
1979with USTR firmly in the lead, multiple departments in the room but clearly did not have a speaking
1980role, which was limited to the Services lead, the Investment lead and their legal advisor.
1981The UK side had been pushing for a discussion on investment, as services had been the main
1982focus of the last working group and no substantive discussions have yet taken place on
1983investment. The US side used the focus on investment to present their approach to listing, given
1984the significant cross over between the two issues. This allowed them to focus on their priorities,
1985discuss issues on which they know the UK is yet to form a position and avoid a more difficult
1986discussion for them on investment. This demonstrated the importance of agreeing the agenda well
1987in advance of the meeting as well as the challenge of controlling the discussion when the other
1988country is hosting.
1989The US was in lobbying mode, pushing their approach to listing and taking a strong position that
1990the UK would have to follow their model. Clear that for the US the priority is securing guaranteed
1991market access for US firms into the UK market and ensuring the services and investment rules that
1992protect this access are as strong as possible, including capturing any future liberalisation. While
1993valuable this means it will be a steep ask to secure any new economically meaningful access to
1994the US on priority UK services asks. Further work is needed to consider how we can get into some
1995of the key services interest with the US particularly:
1996- State level: where the push back will be that UK firms have the same access that any US
1997firm wanting to operate in a different state faces. We are scoping what might be possible on
1998agreements with specific states.
1999- Federal level barriers: where some progress on very specific issues if we can build the
2000evidence, base might be possible.
2001- If the UK can use discussions on listing tactically to drive outcomes, including strengthening
2002out questioning of the US approach given its significant weaknesses
2003- Further consideration of the overall package on services and how we want to sequence the
2004discussion to help drive outcomes. On investment further work will be needed to
2005understand the investor/customer journey and US priorities on investment liberalisation &
2006performance requirements 
2007OFFICIAL – SENSITIVE (UK eyes only)
2008
200949
2010Title of Meeting: State-Owned Enterprises
2011Date: (originally scheduled for 21 March, cancelled due to weather and held on 10 April 2018
2012via VTC)
2013Time: 16:00 – 17:00 (GMT)
2014Participants
2015Name Department/Directorate
2016Julian Farrel DIT – Regulatory Environment
2017Lola Fadina DIT – Investment
2018Rebecca Fisher-Lamb DIT – Services
2019Andrew Pickering DIT – Regulatory Environment
2020James Manning DIT – Investment
2021George Radice DIT – UK/US Trade Policy
2022Josh Carr DIT – Services
2023Thomas Roberts DIT – Investment
2024Emma Stubbs DIT – Regulatory Environment
2025Lottie Free DIT – Regulatory Environment
2026Roy Malmrose USTR - Director of Industrial Subsidy Policy
2027Adam Boltic US Department of Commerce
2028Neil Beck USTR - Director for WTO and Multilateral
2029Affairs
2030Sylvia Savich USTR - Europe and Middle East Office
2031[Inaudible] Chang US Treasury
2032Key Points to Note
2033• Positive, open but high level discussion in which USTR provided answers to a number of
2034questions raised by DIT
2035• USTR spoke a reasonable amount about CPTPP and its provisions, confirming that they
2036see it as a model
2037• Clear that subsidisation is a major concern, and that state capitalism is a significant and
2038growing priority for US trade policy
2039• USTR probed UK position on our 'health insurance' system
2040Report of Discussions and Outcomes
2041Introductions
2042DIT explained that the UK is keen to understand how the US deals with SOE chapters, what kinds
2043of concepts they use, and to start to identify the areas of common ground between our countries. 
2044OFFICIAL – SENSITIVE (UK eyes only)
2045
204650
2047USTR (Malmrose) gave a brief overview of US priorities for an SOE chapter, specifically
2048highlighting TPP and NAFTA as examples.
2049TPP – USTR overview
20501. Provisions on non-discriminatory treatment and commercial considerations
2051• TPP is very different in this respect to Article 17 of GATS, where the US believe the
2052above principles are conflated
20532. ‘Public bodies’ in the WTO and the definition of an SOE
2054• The US expressed their disapproval of the WTO appellate body ruling on the
2055definition of public entities (Canadian Wheat Board)
2056• The US argued that a public body should be any corporation majority owned by a
2057government, however the WTO ruled that to qualify as a public body, a corporation
2058must be ‘vested with governmental authority’. The US felt this set the bar far too
2059high and left a lot of enterprises out of scope.
2060• US feel that a weak point of TPP is the definition of an SOE itself
2061• Under TPP an SOE is essentially a corporation that is majority owned by a
2062government, but they feel this does not go far enough as a government could take
2063control of an SOE without being the majority owner.
20643. Subsidies to SOEs
2065• In TPP the US were trying to distance themselves from the ‘public body’ WTO
2066ruling, to ensure that for example. Provisions in TPP refer to subsidies from one
2067SOE to another and do not reference public entities/bodies
2068US aim with TPP is to set a separate track from the WTO in terms of subsidy disciplines
2069NAFTA – US overview
2070US pointed to their NAFTA renegotiation mandate. There are 3 areas which they would like to build
2071and improve upon from TPP:
20721. Definition of an SOE – would like this to cover minority government ownership
20732. Strengthen subsidy disciplines – potentially to reflect Article 6 of the WTO ASCM on “dark
2074amber” types of subsidies
20753. Improve transparency – would like NAFTA to go further than TPP’s “question and
2076response” style provisions whereby one party can request information from another about
2077how a particular SOE is governed, the subsidies it receives.
2078Discussion points/Q&A
20791. What are the US objectives in having an SOE chapter?
2080DIT: Is the US looking more at raising standards and improving general rule of law or do
2081you have specific aims?
2082USTR: Historically the US position has been 'progressive' with respect to international
2083subsidy rules. The US tends to be more aggressive in trying to discipline other nations’
2084subsidy programmes. The US business community became interested in SOEs a few years
2085ago, which drove this position further. The US stated that SOEs are particularly positioned
2086to potentially disrupt trade flows, and so are keen to have tougher rules for SOEs than for
2087private business. USTR acknowledged they are looking at China and hope to use NAFTA 
2088OFFICIAL – SENSITIVE (UK eyes only)
2089
209051
2091to set a precedent and establish a set of rules and standards which they hope will be
2092applied to China in the future. Acknowledged criticism received from the business
2093community on how far TPP went, especially from steel producing sector.
20942. Definition of an SOE
2095DIT: USTR suggested that they would look to expand coverage from majority ownership to
2096include minority ownership in some circumstances. Would they also look at forms of control
2097or influence aside from actual ownership? Should the SOE definition be expanded to cover
2098this?
2099USTR: US do look at control, the TPP definition was tied to an ownership interest, e.g. the
2100ability to appoint board of directors or not. The US are cautious on including other
2101definitions of control, because too strict a definition could lead to an overly broad scope, for
2102example regulated industries being interpreted as under state control.
21033. What does the US understand 'commercial activities' to mean in this context?
2104USTR: See TPP for a definition - while this has been watered down from the US ideal, it is
2105pretty close to what they’d like to see. The US think that all SOEs’ commercial activities
2106should be examined, regardless of whether or not this is their primary focus, so as to
2107capture all potentially distortive commercial activities.
21084. What does 'commercial considerations' mean in practice? There is a presumption
2109that private enterprises are being used as a benchmark, but that a comparison could
2110be difficult to do in practice.
2111USTR: acknowledged difficulty of defining this, though noted a similar exercise is carried
2112out in subsidies disputes and remedies cases. USTR suggested the key concept used in
2113this respect is what did the government do vs. what would have happened in the private
2114sector. The key test is to compare the SOE’s behaviours to that of privately owned
2115enterprises.
21165. De minimis – What is the US view on the de minimis threshold in SOE chapters?
2117USTR: In terms of a turnover de minimis, the US were unsure there was a principled way of
2118setting this figure and explained that the TPP threshold (200 million SDR) was a negotiated
2119outcome which is higher than they would ideally like.
21206. Subsidies (aka non-commercial assistance) to SOEs – some FTAs do not have standalone chapters on subsidies but do include provisions on subsidies to SOEs. What is the
2121rationale behind this?
2122USTR: US FTAs do not usually include general subsidy provisions (Israel being an
2123exception), largely due to concerns about the agricultural sector, but there could be appetite
2124to include a subsidies chapter in the future.
2125DIT: What do you see non-commercial assistance provisions in TPP doing in practice?
2126USTR: There are some interagency concerns about how the WTO ASCM might interplay
2127with an FTA with subsidy rules in it. There was some thinking that different wording should
2128be used in order to avoid the two colliding, - the TPP chapter does not use the phrase 
2129OFFICIAL – SENSITIVE (UK eyes only)
2130
213152
2132subsidies and does not cite Articles 1 and 2 of the WTO ASCM, but uses similar wording.
2133The definition of non-commercial assistance in TPP combines the ASCM subsidy concept
2134with the specificity concept (which was a negotiated outcome). Part A (defining financial
2135contributions and benefits) and B of TPP pick up WTO ASCM language, including Article
21366.1 of ASCM on “dark amber” subsidies, in which the burden is on the subsidiser to prove
2137the subsidy does not have a serious impact on the market (Note Article 6.1 is no longer in
2138force in the ASCM).
21397. What transparency provisions does the US tend to seek in relations to SOEs?
2140Suggestion NAFTA may go further? What would this actually entail?
2141USTR: Unable to comment too specifically but = Article 25 of WTO ASCM gives a good
2142view of the various types of information that can be provided. However, reviewing various
2143countries’ notifications suggests it may be beneficial to find further ways of asking for more
2144information, for example information on the benefit provided, to increase transparency.
2145There have been some disputes about whether certain legal measures constitute a subsidy
2146or not. The WTO has tended to leave this to Member States to decide for themselves but
2147the US seem keen to explore in more detail why certain legal measures are not being
2148notified or identified as a subsidy.
21498. USTR asked about the UK portfolio of SOEs (understood that it was small) and if the
2150UK had concerns about their “health insurance system”
2151DIT: Wouldn’t want to go down avenue of talking about specific entities but the UK has an
2152advanced competition law regime and strong corporate governance rules, and we believe
2153we are compliant with international best practice. Wouldn’t want to discuss particular health
2154care entities at this time, you’ll be aware of certain statements saying we need to protect
2155our needs; this would be something to discuss further down the line when we come to
2156consider what entities would count as 'enterprises'.
2157Closing/wrap-up
2158The US are keen to work with the UK to develop a ‘gold standard’ SOE chapter, that both Parties
2159could then use offensively in the future. UK invited USTR to continue this discussion at the next
2160WG, tentatively agreed for July in London.
2161Action Items
2162• No immediate actions, though UK offer (accepted by the US) for further discussions at next
2163TIWG in London should be followed up by US team in due course.
2164FOR INTERNAL DISTRIBUTION ONLY
2165Lead Negotiator Analysis/Comments
2166• The atmosphere was open and positive and in keeping with what we would expect from an
2167initial high-level discussion. DIT noted shared incentives with US on these issues beyond
2168our bilateral trade relationship (i.e. global trade policy).
2169• The discussion was mostly one-way traffic – DIT asking questions of USTR. We will need
2170to be able to have more of a dialogue next time and DIT will need to be better placed to 
2171OFFICIAL – SENSITIVE (UK eyes only)
2172
217353
2174speak about specific entities and to have more established views on key policy questions.
2175Useful intelligence was gained, for example potential US openness to including a standalone subsidies chapter, which we had not expected. On DIT queries about concepts used
2176in TPP, USTR did not expand much beyond the definitions used in the text.
2177• The query about 'health insurance' was likely a fishing expedition to check the tone of our
2178response. We do not currently believe the US has a major offensive interest in this space –
2179not through the SOE chapter at least. Our response dealt with this for now, but we will need
2180to be able to go into more detail about the functioning of the NHS and our views on whether
2181or not it is engaged in commercial activities, including through consultation with the Public
2182Services team in TPD.
2183OFFICIAL – SENSITIVE (UK eyes only)
2184
218554
2186Title of Meeting: Rules of Origin
2187Date: 22 March 2018
2188Time: 9:00 -11:30 (EDT)
2189Participants
2190Name Department/Directorate
2191Neil Feinson DIT - Goods
2192Tim Ward DIT - Goods
2193Adam Fenn DIT – Goods
2194Kent Shigetomi USTR
2195Key Points to Note
2196Following a good opening session, a commitment to continue a technical dialogue, e.g. on RVC
2197valuation options and origin verification.
2198Report of Discussions and Outcome
2199Kent Shigetomi, USTR presented a power point covering the architectural differences between the
2200US and EU models of ROO including:
2201• claims and verification of origin
2202• structure of product specific rules of origin
2203• regional value content
2204Claims and Verification of Origin
2205The EU has a system of claims that flow through approved exporters who then become the focus
2206of subsequent verification. Under the US system, importers make the claims for preferential
2207treatment based on a written or electronic application. And the Customs authority of the importer
2208issues the determination.
2209Structure of the Product Specific Rules Annex
2210US FTAs use the “telephone book” approach and its annex includes rules for goods in Chapters 1-
221197. The difference between the US approach (telephone book) and the EU approach (general rule
2212which is not as well defined) was a fundamental “stumbling block” in TTIP. The US could be open
2213to greater flexibility/simplicity in its approach but historically follows the same model in its
2214FTAs. The US also has exceptions for certain goods, for example, textiles, agriculture and autos
2215receive different treatment due to strong interest from the industry. Industry is also vocal about the
2216different requirements in different FTAs and ask why they aren’t all harmonized.
2217The US finds their approach easier to use when trying to determine where a good falls, e.g. the
2218ITC has a searchable database to help find matches and the Department of Commerce has a 1-
2219800 number which provides advice for completing required documents. USTR also provides a 3-4
2220page guide covering the basics of classification.
2221Regional Value Content
2222OFFICIAL – SENSITIVE (UK eyes only)
2223
222455
2225US FTAs typically require minimum non-originating content and has three methods to calculate the
2226values:
22271) net cost (only used for autos) = (net cost-value of non-originating material)/net cost
22282) build down = (adjusted value-value of non-originating inputs)/adjusted value
22293) build up = value of non-originating material/adjusted value
2230The EU determines the regional value content by dividing the amount of the non-originating
2231material by the ex works (price paid to the producer at the place where the last production was
2232carried out).
2233The result can be different depending on which method is followed since the US build down
2234approach allows 49% to qualify while the EU ex works approach has a 51% rate to qualify. The
2235US also allows for full bilateral cumulation whereas the EU requires sufficient processing in order
2236to cumulate. USTR cited whiskey as an example: under US rules, if the UK exports high alcohol
2237content whiskey to the US and the US dilutes it and exports it back to the UK, the US would
2238include all processing in its value calculations of input. The EU would not include processing as an
2239input.
2240Under TTIP, the EU and US were unable to agree on an approach so a compromise would likely
2241entail the development of a new method of calculation.
2242Stakeholder Input
2243Industry/stakeholder input can provide evidence to modify ROO. The FTA consultation process
2244allows for a range of views to be submitted. Advisory committees, whose members are companies
2245as well as trade association representatives, also provide specific input.
2246During negotiations with FTA partners, the US tends to have a more general debate about how a
2247company can meet the RVC but tend to have detailed talks when it comes to autos. The US will
2248maximize benefits to the parties by looking at how the good was produced, what the policy goal is,
2249as well as factors in industry input.
2250Approaches in US FTAs
2251TPP reflects an evolution of the US approach to ROO and was used to inform the ROO
2252conversation in TTIP. However, it is not clear at this juncture if the US will follow the TPP approach
2253in future FTAs. It is also unclear what the US’s current position is on duty drawbacks as well as
2254transshipment.
2255UK Challenges
2256The UK set out some of the challenges it faces as it leaves the EU. ROO is a policy area that is
2257receiving a great deal of attention. Currently the UK has three work streams on ROO:
22581) continuity agreements where ROO might need to be changed.
22592) New FTAs- the UK is developing its position and is looking for industry input
22603) EU piece being led by DExEU
2261The UK is keen for industry input as it sorts out the business-friendly policy goals it wants to
2262achieve as well as what economic activities it would like to encourage and discourage.
2263The US explained that it always includes a provision in its FTAs to modify ROO through
2264administrative procedures after an FTA is implemented. A change to ROO is typically initiated by
2265industry and usually reflects a change in production. NAFTA saw three changes to ROO and Chile
2266one change.
2267OFFICIAL – SENSITIVE (UK eyes only)
2268
226956
2270Next Steps
2271USTR offered to send DIT a copy of its ROO power point which will supplement these notes. The
2272UK said it would like to dig into evaluation methodologies more in their next meeting with a focus
2273on specific sectors, e.g. autos. The US said that it might also be useful to walk through the US
2274approach to verification as it is the opposite of the EU approach. The UK was also interested in
2275learning more about how ROO was addressed in the current NAFTA talks.
2276The US and the UK agreed to further discussions (could be via VTC or at the next TIWG) and
2277USTR flagged that USTR (Kent S) would be in Geneva 18-19 April which might be a near-term
2278opportunity to continue the conversation. UK agreed to consider the offer to meet up in Geneva.
2279Action Items
2280• UK suggestion: More of a detailed look at the development of particular sector positions,
2281including a look at element such as valuation methodologies.
2282• US suggestion: walking through verification (including HMRC experiences of exporter based
2283schemes)
2284• UK suggestion: updates on NAFTA - thinking behind and progress achieved
2285• Meet in Geneva at committee on ROO - April 18/19 - Ken will attend. Opportunity to meet
2286with DIT informally.
2287• US to share the ppt presented. 
2288OFFICIAL – SENSITIVE (UK eyes only)
2289
229057
2291Title of Meeting: Industrial MRAs
2292Date: 22 March 2018
2293Time: 9:00 – 12:00 (EDT)
2294Participants
2295Name Department/Directorate
2296Julian Farrel DIT – Regulatory Environment
2297Meg Trainor DExEU
2298Sophie Brice DIT – UK-US Trade Policy Team
2299Henry Alexander DIT (VTC from London)
2300Cynthia Morgan DIT legal (VTC from London)
2301Motsabi Rooper DIT (VTC from London)
2302Richard Thompson DfT (VTC from London)
2303Jon Elliot BEIS, OPS&S (VTC from London
2304Rhidian Roberts BEIS, OPS&S (VTC from London)
2305Mark Birse MHRA (VTC from London)
2306Lea Reynolds VMD (VTC from London)
2307John Millward VMD (VTC from London)
2308Mark Abdul US Food and Drug Administration (FDA)
2309Joseph Khawan US Department of State
2310Ashley Miller USTR
2311Jim Sanford USTR
2312Sam Rizzo USTR
2313Bill Hurst US Federal Communications Commission
2314Natalie McKinney US Pharmacopeia
2315Brandy Baldwin US Coast Guard
2316Ramona Sarr US National Institute of Standards and
2317Technology (NIST)
2318Key Points to Note
23191. DExEU explained that the UK will leave the EU on 29 March 2019 and the Implementation
2320Period will last until 20 December, 2020. During this period the UK will be able to sign and
2321ratify international agreements that will then take effect following the Implementation
2322Period.
23232. The US are keen to identify and address implementation and operational issues that will
2324arise in transitioning the EU-US MRA into a UK-US MRA. Initial ‘regulator to regulator’
2325discussions have identified some issues, for example for GMP the UK needs to confirm
2326whether it will continue to use EudraGMP database. Next steps should include further
2327‘regulator to regulator’ discussions to continue to flush out these operational issues.
2328OFFICIAL – SENSITIVE (UK eyes only)
2329
233058
23313. The US highlighted Article 21 and Article 19 of the GMP annex, in addition to the UKs list of
2332issues identified, as something that both sides need to address before a UK/US MRA is
2333agreed.
2334Report of Discussions and Outcome
2335Discussion of Continuity Agreements and Short Term Outcomes
2336DExEU update on EU Exit and UK Approach to Continuity:
2337• On Monday 19 March, David Davis and Michel Barnier announced that the UK and the EU
2338had agreed the legal text on the terms of the implementation period. This forms part of the
2339Withdrawal Agreement codifying the UK’s exit. Next, the implementation period text will be
2340submitted to this week’s European Council.
2341• The UK will leave the EU on 29 March, 2019 and the implementation period will last until 31
2342December, 2020.
2343• The UK and EU’s shared aim is for international agreements - to which the UK is a party by
2344virtue of EU membership - to continue to apply to the UK as now during the implementation
2345period. This provides further confidence that there won’t be disruption.
2346• The EU will send notifications to 3
2347rd countries to explain that the UK will be treated as a
2348Member State for the purposes of international agreements during the implementation period.
2349• During the implementation period, the UK will be able to sign and ratify international
2350agreements that take effect following the implementation period. So work on transitioning
2351bilateral agreements should continue.
2352• We want to work with the US to make sure that this approach works with you.
2353US reactions to UK position
2354Jim (USTR) asked if the Implementation Period deadline is 31 December, 2020.
2355• The UK explained that the end of the Implementation Period is 31 December, 2020 marks the
2356end of the formal, Transition Period. The UK can negotiate, sign, and ratify agreements during
2357this Transition Period so that the UK can be ready come 1 January, 2021.
2358Ashley from USTR asked whether the UK would have a decision-making role in EU bodies during
2359the Transition Period:
2360• UK response: While in certain situations, the UK has legal authority to participate, the UK will
2361sit outside of the decision-making structures during the Transition Period. It should still be
2362noted that changes by the EU will apply to the UK as all other member states during the
2363Transition Period.
2364Update following TTE & EMC regulator-to-regulator discussions:
2365o Ashley:
2366• Following regulator-to-regulator discussions, it would be helpful to look at the
2367operational issues for each agreement, as they are different.
2368o Bill Hurst:
2369• We want to make sure the transition happens smoothly. It’s important to work out the
2370operational aspects. We want to identify the right people taking over in the UK, so that
2371we can help with their implementation (test labs, etc., continuing to operate).
2372• We need to identify what changes need to be made to improve things? With regard to
2373joint committee decisions, we don’t necessarily think that’s necessary. What can we do
2374to improve the process in order to cut out unnecessary steps?
2375o Ramona:
2376• The National Institute of Standards and Technology (NIST) promotes U.S. innovation
2377and industrial competitiveness by advancing measurement science, standards, and
2378technology in ways that enhance economic security and improve our quality of life. 
2379OFFICIAL – SENSITIVE (UK eyes only)
2380
238159
2382• Our biggest interest is understanding what those notified bodies will be once the
2383transition occurs.
2384• Then we’d track from there any change in regulations that would apply to those bodies
2385for products being shipped to the UK.
2386o Jon Elliot:
2387• Agreed that the conversation was productive. From a UK side, did not forsee any major
2388hurdles, mainly administrative issues, which should be further discussed.
2389o Ashley:
2390• Follow-up discussion is required on the designation offices and persons on the UK side,
2391as well as the role of the counterpart regulator to the FCC on the UK side.
2392o Julian:
2393• Keen to ensure discussions continue to discuss operational issues that could be
2394improved. However the general principle we’re trying to follow for all of these continuity
2395agreements is to replicate what already exists in the EU/US MRA. In the long-term, we
2396have as much interest as you in improving and making these agreements better,
2397including whether we can be more ambitious in scope.
2398o Jim:
2399• While the UK is going to continue applying EU rules, we want to make sure we get a
2400good understanding of how the system works to make a smooth transition.
2401• Further bilateral calls should take place between regulators within the next month –
2402around mid-April – regarding operational issues.
2403• As and when there are changes to the regulation that would apply to notification bodies
2404(as it relates to certification bodies and labs during the Transition Period), we will need
2405to communicate properly regarding this.
2406Update following GMP Regulator to Regulator discussion:
2407o Mark Birse (MHRA):
2408• The GMP Annex only came into force in 2017.
2409• Preapproval inspections are not yet covered by the MRA.
2410• UK was clear that it would like to continue with the MRA. Otherwise, we’d have to
2411establish our own system of publishing notices.
2412• With regards to entry into force provisions coming on stream in 2019, it is important that
2413we account for these measures in any MRA moving forward.
2414o John Millward (VMD)
2415• If the GMP annex becomes operational for veterinary products before EU exit, then the
2416UK would like to roll straight over after EU exit.
2417o Mark Abdul (FDA): inspections are solely a member state competency, so this is helpful.
2418• The extent to which EU regulations and guidance will still apply is important, so
2419continuity after the UK leaves the EU will be helpful.
2420• Also, questions regarding EMA and questions regarding what happens if regulation
2421lapses both need to be answered.
2422• Going forward, we will have to figure out reassessment and a streamlined
2423reassessment since there won’t be a joint auto programme.
2424• Regarding products other than human or vet. drugs, discussion of scope of the new
2425MRA is appropriate, but internal discussions at FDA still need to take place.
2426OFFICIAL – SENSITIVE (UK eyes only)
2427
242860
2429On 10 generic issues identified going through the MRA that would need to be addressed:
2430Issue 1 - Legal form:
2431o Henry:
2432• In November 2017, we were looking at options on how to bring the document across:
2433cross out EU and insert UK throughout the entire document or do it by an exchange of
2434letters?
2435• We’ve now concluded we want to take a short form, simple approach using an
2436exchange of letters.
2437o Cynthia:
2438• An exchange of letters could provide an appropriate legal vehicle to transition the
2439agreement; a drafting technique we’ll be employing in many FTAs. Applying this
2440approach to the MRA process, we could exchange letters, to transition the existing MRA
2441to apply to the UK and the US; this would significantly reduce the volume of text that
2442would need to be finalised. If there’s a transitional period or other aspects that are
2443important for policy reasons, we could have additional clarifying clauses set out on how
2444things should be read into the treaties.
2445o Jim:
2446• The lawyers had a meeting yesterday. My baseline is that we have to do parallel
2447agreements with the EU due to the nature of a multi-party agreement (e.g., discreet
2448issues that need improvements and modifications, subject to instructions from our legal
2449team).
2450o Julian:
2451• It would be useful to engage once you have that readout through your legal team to
2452emphasize an approach that is simplest for all of us and that covers us legally “what
2453was EU-US, now applies to UK-US, subject to these modifications,” hopefully creates
2454less work but still provides the necessary legal certainty.
2455Issue 2 – Inactive Sectors:
2456o Henry:
2457• UK approach has not changed since November. UK has noted US’ previously
2458expressed position.
2459o Jim:
2460• From our perspective, we don’t see purpose in transitioning non-operational annexes. It
2461seems rather awkward that we’d transition things that we don’t plan to make
2462operational.
2463Issue 3 - References to EU MFN:
2464o Cynthia:
2465• We will convert EU law to UK domestic law. All references to EU laws, directions, and
2466directives will be preserved in the UK legal framework.
2467o Joseph Khawan:
2468• Does the European Court of Justice (ECJ) have jurisdiction over the UK during the
2469Implementation Period?
2470• Answered by Cynthia: The UK is to be treated as a member state, thus, ECJ jurisdiction
2471would continue to apply. However, DExEU would be better placed to address in detail.
2472Issue 4 - on entering into force issues and the Transition Period:
2473o Henry:
2474• Important to ensure a seamless transition. For transition periods in EMC and TTE, it is
2475important that we do not accidently re-establish implementation periods. For GMP, we 
2476OFFICIAL – SENSITIVE (UK eyes only)
2477
247861
2479want to bring across timelines as currently set out, this would be particularly relevant for
2480veterinary and biological scope.
2481o Jim:
2482• I certainly understand the interest in seamless transition and not imposing a new
2483transition period. Regarding 24 months on telecomm, we took a joint decision to
2484shorten that. We didn’t have 24-month transition periods in the annexes either, so
2485unless an unforeseen circumstance arises, we won’t need 24 months.
2486Issue 5 - on conformity assessment bodies:
2487o Henry:
2488• The first element: making sure that both will be able to access a list of each other’s
2489conformity assessment bodies (CAB). The second element: making sure that the CAB
2490currently recognized in the agreement doesn’t need to go through any reassessment or
2491re-designation process.
2492• UK was exploring whether there was a need to add a clarifying clause in the agreement
2493that there will be no reassessment process.
2494o Jim:
2495• We agree with the objective regarding not requiring another reassessment process.
2496Issue 6 on updating the relevant designating authorities:
2497o Henry: For the UK, that’s changing of names and Departments.
2498Issue 7 on establishment of the joint committee:
2499o Henry:
2500• No issues. However, how it would work operationally?
2501o Jim:
2502• We may want to take a look at revisiting the joint committee rules and procedure as a
2503vehicle to incorporate perspectives of regulators.
2504o Julian:
2505• We can probably operate joint committees more efficiently bilaterally.
2506o Jim:
2507• Happy to share the rules of the EU/US Committee with UK.
2508• These date back to c. 2000 - happy to consider whether they may be able to better
2509reflect operational realities.
2510Issue 8 on removing the need to translate the text:
2511o Henry: We agreed to this at the last TIWG meeting – only required in English.
2512Issue 9 - on removing references to EU:
2513o Henry: Already talked through.
2514Issue 10 – on the GMP annex:
2515o Henry:
2516• Regulators are talking to each other on both sides.
2517o Jim:
2518• On Issue 10, Article 21 and Article 19 of the GMP annex, as well as the appendices are
2519all things we need to take a look at and need some changes. That’s not everything, but
2520these are just obvious changes we would want to make in a US-UK agreement. Haven’t
2521looked closely at marine equipment, but there is work underway on product scope.
2522OFFICIAL – SENSITIVE (UK eyes only)
2523
252462
2525On issues for discussion in the Marine Equipment MRA:
2526o Brandy:
2527• Important to note that the EU-US agreement is currently going through the final stages
2528of being updated. The substantive work of updating the MRA is done. However, we are
2529still working on formalizing other questions.
2530• One issue that came up in the discussion with UK was UK-EU relationship. We don’t
2531want to have competing MRAs.
2532• Question - will the UK still have a seat at EMSA?
2533• Answered by Julian: The bodies which the UK will continue to be allowed to attend not
2534yet definitively agreed upon. The working presumption is that in the majority of the
2535cases, the UK will not be present from the end of March 2019. During the 21 month
2536Implementation Period the UK will be covered by EU law on a dynamic basis, but not in
2537the room in the majority of cases. There may be exceptions, we can’t speculate yet.
2538o Brandy:
2539• How would we, then, communicate that back through our process?
2540• Answered by Richard (DfT): We focused on the practicality of moving forward on the
2541existing MRA and to make sure that we maintain momentum between our two
2542organizations, maintaining a degree of currency in terms of existing MRA so that we
2543don’t create two competing and confused documents. Two other areas we discussed:
2544market surveillance and communication; we will meet with you again within the month
2545(no date set) but looking at the middle of April.
2546UK’s participation in EU regulatory agencies and international regulatory bodies
2547o Jim:
2548• Given that in GMP there was a role in that negotiation that EMA was playing, in terms of
2549product scope, it’s a key question for continuity MRAs. Our interest is in understanding
2550how you’d proceed in the future regarding your relationship with these EU and
2551international bodies.
2552o Ashley:
2553• We need to continue this dialogue on a regulator-to-regulator level - e.g. regarding the
2554UK’s participation in the EMA. This is an issue we will need to continue to work on.
2555o Bill Hurst:
2556• Today, a joint meeting between the US, EU, and Canada on market surveillance has
2557convened. The thought is that the UK could participate in this group. Looking forward,
2558we’d want to cooperate on market surveillance.
2559o Ramona:
2560• Regarding decisions on technical guidance notes on directives (covered by the radio
2561equipment directive): we’d hope that these technical guidance notes would be accepted
2562so that they would be both applied in the UK and EU.
2563• Look at what’s in the RND and what’s in the AMC guide.
2564o Julian:
2565• Highlighted that the UK does all of its market surveillance now anyway and this will
2566continue following EU exit. This is something that can be expanded upon in the next
2567teleconference.
2568o Mark Birse:
2569• On EMA, this was set out by the PM in her Mansion House speech. Looking at the
2570specific technical aspects for the MRA, UK is a member of PICs anyway. Regarding
2571IMDRF – UK is still considering internally and will have to come back to this.
2572OFFICIAL – SENSITIVE (UK eyes only)
2573
257463
2575Greater Regulatory Compatibility
2576E-labelling
2577o Jim:
2578• E-labelling is a concept that other countries are adopting. The time is now, while there
2579may be latitude on where the industry is going and what the stakeholders are doing.
2580o Bill:
2581• Regarding E-labelling, something our industry has pushed for.
2582• For example, if your computer or phone has a display, you can rely on the information
2583on the display. The US amended our Communication Act to allow this on
2584communication products.
2585o Ashley:
2586• These approaches on E-labeling globally started voluntarily, whether that’s South Africa
2587or Malaysia. It started alongside the regulation. In the R&D directive, there’s a
2588provision that allows us to study and take up a project in terms of E-labeling.
2589• The question we have is, is there some policy space there in the UK?
2590o Julian:
2591• Thanks US for clarifying which products US were interested in e-labelling for. The UK
2592will be bound by EU legislation during an IP, which includes labelling requirements. The
2593question regarding CE marking is dependent upon the UK/EU negotiations.
2594Medical Devices – Single Audit
2595o Mark Abdul:
2596• On single audit regarding medical device programs: the UK has engaged on behalf of
2597its auditing bodies. We want to continue close engagement.
2598o Mark, London:
2599• Let’s table this discussion to the next Regulators’ bilateral VTC/teleconference – UK will
2600have expert colleague there on devices.
2601Any agreements/thoughts on items for discussion at the Next Trade Working Group
2602• This will be determined based on the meetings and calls set to take place within the next
2603few months, per the action items below. Next TIWG likely to be in July.
2604Action Items
2605o Julian: This working group likely to meet again in early July in London, then again in DC
2606later in the year, but want to continue progressing with technical issues in the meantime to
2607keep up the momentum.
2608o Jim and Julian to touch base in the next six weeks.
2609• On operational issues:
2610o Ashley: Follow-up discussion are required on the designation offices and persons
2611on the UK side, as well as the counterpart regulator of the FCC on the UK side and
2612their role.
2613o Further bilateral regulator-to-regulator calls will take place within the next
2614month or so on operational issues.
2615o As and when there are changes to the regulation that would apply to
2616notification bodies (as it relates to certification bodies and labs during the
2617Transition Period), we will need to communicate properly regarding this.
2618• On MRA:
2619o Regulators are meeting within the month (planning for mid-April). Julian asked that
2620they report back on their meeting.
2621o Other MRA discussions are required. However, a date has not been set yet.
2622OFFICIAL – SENSITIVE (UK eyes only)
2623
262464
2625• On Medical Devices single audit – further discussion to be scheduled.
2626• Issues identified through the 10-point issues on MRA need to be followed up on:
2627o Issue 1: Jim (USTR) to engage with DIT once he has a readout of USTR legal
2628discussions to look at an approach that is simplest for all of us, while providing the
2629necessary legal certainty.
2630o Issue 2:
2631▪ Julian, “we’ll park this for now,” in response to Jim’s argument that it is
2632unnecessary to transition non-operational annexes.
2633o Issue 3: No further action noted.
2634o Issue 4: No further action noted.
2635o Issue 5:
2636▪ Jim (USTR) agrees that we do not need to go through a reassessment
2637process for CABs.
2638o Issue 6: No further action noted.
2639o Issue 7:
2640▪ UK had no issues. However, Jim suggested that “we may want to take a look
2641at revisiting the joint committee rules and procedure as a vehicle to
2642incorporate perspectives of regulators.” US to send UK the current EU-US
2643rules of procedure.
2644o Issue 8: We agreed to this at the last TIWG meeting.
2645o Issue 9: Already discussed.
2646o Issue 10:
2647▪ Jim: “On Issue 10, Article 21 and Article 19 of the GMP annex, as well as the
2648appendices are all things we need to take a look at and need some changes.
2649That’s not everything but these are just obvious changes we would want to
2650make in a US-UK agreement. Haven’t looked closely at marine equipment
2651but there is work underway on product scope.”
2652• Regulators to continue, informally, having discussions, including the legal element that we
2653will continue with our lawyers, GMP, marine equipment agreement, are all issues on the
2654table to be addressed before July 2018.
2655• On greater regulatory compatibility:
2656o Ashley: We need to continue this dialogue on a regulator-to-regulator period or are
2657they regulatory bodies where participation will be able to continue? This is an issue
2658we will need to continue to work on.
2659o On single audit regarding medical device programs: this conversation was tabled to
2660the next bilateral regulator-to-regulator VTC or teleconference.
2661OFFICIAL – SENSITIVE (UK eyes only)
2662
266365
2664Title of Meeting: Regulatory Session
2665Date: 22 March 2018
2666Time: 14:00 (EDT)
2667Participants
2668Name Department/Directorate
2669Julian Farrel DIT
2670Ben Rake DIT
2671Kate Maxwell DIT
2672Sophie Brice DIT
2673Lizzie Chatterjee DIT
2674Matt Ashworth DIT
2675Meghan Ormerod British Embassy Washington
2676Rachel Shub USTR
2677Sam Rizzo USTR
2678Marine Kendman USTR
2679Wendy Lebrunte USTR
2680Mark Abdul US - FDA
2681Keith Mason US - EPA
2682Matthew Jaffe USTR
2683Greg Burn US Embassy London
2684Ryan Barnes US - Department of Commerce
2685Brian Woodward US - Department of Commerce
2686Joanne Goode US - ITC
2687Kim US State Department
2688Jessica Simonoff US State Department
2689Bryan O’Byrne US Small Business Administration
2690Ashley Miller USTR
2691Report of Discussions and Outcome
26921. Rachel Shub (RS) opened by asking for any updates on regulation and Brexit. Julian Farrel
2693(JF) explained that conversations were taking place in Brussels this week ahead of the
2694March European Council. HMG expects agreement on a transition period until the end of
26952020 during which the UK would remain subject to all existing EU obligations and rights,
2696covered by single market rules and undertake a dynamic application of the EU acquis. JF
2697explained that if EU law changes during that period it will apply in the UK until the end of
26982020 and the working presumption is that the UK would be outside of the decision-making
2699structures after the end of March 2019. There is an open-ended question on participation in 
2700OFFICIAL – SENSITIVE (UK eyes only)
2701
270266
2703some regulatory bodies and the UK will begin negotiations on future relationship after the
2704March European Council on Friday 23 March. JF explained that the PM had expressed a
2705wish that the UK continue to participate in the Medicines Agency, Chemicals Agency and
2706Aerospace Safety Agency but it isn’t possible to predict at this stage where this will end up.
27072. Discussions earlier in the week had indicated that during the IP the UK would have the right
2708to negotiate, sign and ratify international agreements that would come into force after the
2709end of the IP. This would mean the UK could begin negotiations with non-EU countries from
2710the end of March 2019 in the hope that agreements could be in place and brought into force
2711from the start of 2021.
27123. RS explained that the priority for the US is to understand what the regime might look like
2713after 2020. SR explained that the discussion on TBT last year was largely focused on the
2714approach to the conversations during TTIP. The notice to stakeholders paper caught
2715USTR’s eye as there is reference to conformity assessment localisation within it. This would
2716have major implications for the 180 notified bodies in the UK and an interest for US
2717stakeholder bodies too. SR asked about the UK’s thinking in this area.
27184. JF noted that the paper was drafted before the idea of an IP became a reality. He
2719suggested that if an IP takes effect as expected until December 2020 this will include all of
2720the operation of conformity assessment bodies. What happens after that is up for
2721negotiation under the new economic partnership. The UK would aspire to negotiate an
2722agreement with the EU that maintains as much of the status quo as possible, but it’s too
2723early to say how this would work in practice.
27245. JF noted that the UK and EU start in a place of full regulatory alignment unlike any other
2725trade negotiation. RS said that the US had been doing some thinking about this and about
2726how best to communicate to the UK some of the flexibilities that might be available to it
2727after exit – how to avoid the rigidities of the EU system. She suggested that they would talk
2728through these with the UK at the next TIWG.
27296. SR asked if there are models the UK is thinking of for how it will operate with the EU in this
2730space. JF explained that there were not, but that we started from a point of full alignment.
2731After 2020 the UK Parliament and HMG will have the ability to revise regulation and
2732legislation as it thinks appropriate, but that no one is expecting this to happen in a rapid or
2733radical way.
2734Better Regulation:
27357. Kate Maxwell (KM) gave an overview of the UK Better Regulation framework. The
2736framework sets out what government departments should do when they are bringing in new
2737regulation. The changes are intended to make the process more streamlined and efficient.
2738HMG is aiming to make the process more proportionate in view of the potential for a high
2739level of new regulatory activity in the coming years. The system is designed to allow more
2740flexibility, but retain the checks and balances for the measures that matter most to
2741businesses. KM offered to put the US in touch with the Better Regulation Executive if they
2742have questions on the detail of the new process.
27438. RS asked if HMG is likely to refresh its BRE guidance again in the future. JF explained that
2744HMG does so periodically and that a future update would not necessarily be linked to EU
2745exit. Marine Kendman (MK) asked if there is likely to be an extension of the EU’s rigidity on
2746regulation setting. JF disagreed that this was rigidity. 
2747OFFICIAL – SENSITIVE (UK eyes only)
2748
274967
27509. On conformity assessment, USTR said that their companies have an incredibly difficult time
2751putting together a dossier and demonstrating conformity with EU standards. RS said that
2752the US would like to talk more about this as the EU has not done a great job of
2753demonstrating flexibility in the past.
275410. JF said that the UK takes flexibility in this context seriously – the principle that EU
2755standards are not the sole way to demonstrate compliance. He expects this to remain the
2756UK position. MK conceded that US companies report having an easier time in the UK than
2757in some other MS on this front.
2758Regulator Presentations:
275911. RS introduced presentations by a number of regulators on their guidance and regulatory
2760process and explained she wanted to talk through this because there seemed to be areas
2761in the EU/UK system where this kind of guidance is missing.
2762[US presenters largely spoke from their slides, which are available separately]
276312. Erik Puskar (NIST) offered a presentation on how US agencies regulate. The inter-agency
2764process plays an important role. A trade lead will read a draft regulation and, if they raise a
2765flag in doing so USTR will discuss with the regulating agency any potential problems that
2766could arise with the regulation. There is explicit guidance contained in OAB 118 stating that
2767regulations cannot put up barriers to trade – giving a clear message to the private sector.
276813. During the presentation, RS explained that “government unique standards” are what give
2769the government a bad name. USG is keen not to reinvent the wheel – if the private sector
2770has already produced standards that work well they want to help to build on that.
277114. The US discussed the benefits of Voluntary Consensus Standards (VCS). The focus is on
2772the process used to develop the standards – openness balance, due process, appeals
2773process leading to consensus. They come with a lot of additional guidance. The US is
2774obligated under the TBT Agreement to use relevant international standards, except where
2775such standards would be an ineffective or inappropriate means to fulfil the legitimate
2776objective pursued.
277715. US guidance includes a specific section on Conformity Assessment. Agencies are required
2778to consider:
2779a) The level of confidence needed (in the safety of a product), the risks associated with
2780non-compliance, and the costs of demonstrating conformity.
2781b) Use of international conformity assessment systems and private sector conformity
2782assessment mechanisms in lieu of or in conjunction with government conformity
2783assessment procedures.
2784c) Provides general criteria for selecting conformity assessment procedures including
2785market considerations.
2786d) Agencies should also consult with the USTR on relevant international obligations for
2787conformity assessment.
278816. Erik summarised the presentation: The Federal Government is an active player and user of
2789the private sector led standards system in the US. The NTTAA and OMB circular A-119
2790provide a framework in which to operate. Across the Federal Government, standards are
2791used in diverse ways to support agency missions. NIST’s standards co-ordination office 
2792OFFICIAL – SENSITIVE (UK eyes only)
2793
279468
2795and www.standards.gov are available. Looking ahead, NIST is developing plans to update
2796its conformity assessment guidance to complement the revised Circular.
279717. JF said that an introduction to the US standards system and US conformity assessment
2798system would be useful as HMG is trying to understand where the common ground lies
2799between the EU and US. There appear to be some sectors in which the rules are stricter in
2800the EU and others where they are stricter in the US. The US agreed to provide this.
280118. JF asked how the US deals with instances of multiple standards and if there is
2802incorporation by reference. Erik Puskar explained that agencies will incorporate multiple
2803regulations by reference and that this is a good way to reduce the burden of regulation. If
2804the private sector is already following certain standards, then they will include these in the
2805new regulation – this is a reflection of avoiding “government unique” standards. Erik
2806explained that standards are always voluntary in the US. In some situations, regulators will
2807refer to an array of standards that could be used to comply, noting that none are the only
2808way to comply.
280919. Gail Rodriguez from the US Food and Drug Administration gave a presentation (USTR will
2810send a copy to DIT). GR said that she would like to have a session with regulatory agencies
2811in the UK. GR explained that as there is huge variety in the products FDA regulates so the
2812FDA has to be flexible in the way that they regulate – she explained that this is one reason
2813why they find standards very attractive. GR explained that FDA is trying to harmonise its
2814approach with the rest of the world.
281520. The FDA’s typical approach is:
2816a) Risk based
2817b) Flexible – “least burdensome”
2818c) Fee supported – a lot of activity depends upon industry fees. Industry gives the FDA a
2819direction every 5 years on how it should spend the money.
2820d) Transparency – everything should be open to notice and comment.
2821e) Voluntary use of standards – companies are welcome to demonstrate their products are
2822safe and effective in other ways.
2823f) Preference for standards and guidance over regulations. Regulations are “really hard”.
2824It takes a generation to get a regulation passed through so the FDA tends to avoid this
2825approach.
282621. The FDA’s classifies products into three classes:
2827a) Class 1 products: simple products with a demonstrated safety. Subject to some general
2828controls.
2829b) Class 2 products: products where some wiggle room is desirable/possible. Pre-market
2830notification approach.
2831c) Class 3 products: premarket approval required.
283222. The FDA issues a lot of guidance to tell companies what the thought process behind the
2833standards is. Guidance can address anything related to information helpful to stakeholders
2834and the FDA, for example: design production, labelling, promotion, manufacturing, testing
2835of regulated products. There are two levels of guidance documents: Level 1 and Level 2
2836(simpler).
283723. GR set out why standards are FDA’s preferred way of operating:
2838a) They improve time to market for safe and effective medical devices.
2839OFFICIAL – SENSITIVE (UK eyes only)
2840
284169
2842b) Levels the playing field, encouraging free trade, making competition easier for
2843everyone.
2844c) Preferable in a field in which products are changing so quickly: standards can adjust
2845more easily than regulations. The industry is far different to ten years ago and there
2846have been many fast technological changes.
284724. GR recommended that DIT look at the FDA Guidance website.
284825. JF noted that there is a chapter in the EU-US conformity assessment MRA on medical
2849devices and asked why, if the fundamental approach is basically similar there is not
2850sufficient confidence to bring the agreement into force on medical devices. JF asked how
2851we could create sufficient confidence to bring this type of MRA into force.
285226. Mark Abdul said there had been lots of conversations on this and that they had uncovered
2853wildly divergent conflict of interest rules in the US and other countries that meant they could
2854not implement the MRA in this area. RS explained that when US agencies were looking at
2855the EU generally they were usually very comfortable with the UK’s regulatory approach, but
2856this country by country approach could not work in the EU context. JF asked if he should
2857take this as a hint that the UK and US might be in a better place to do something on mutual
2858recognition of conformity. RS said that it was and that the US looked forward to seeing what
2859might be possible.
286027. JF said that DIT is interested in identifying product areas for regulatory co-operation in
2861future trade agreements. He suggested it would be good to signal that it is something both
2862parties are committed to working on. MK said there were many potential opportunities for
2863UK and US regulators to work together.
286428. Kevin Robinson (KR) from OSHA presented on the agency’s work. KR explained that there
2865are currently 36 NRTL sites in the US focused on safety in the workplace. They designate
286637 broad categories of equipment. One method to achieve acceptability is to have a
2867product certified in a nationally recognised testing laboratory.
286829. The largest category that OSHA tests for safety is electrical equipment. KR set out OSHA’s
2869process for conformity assessment of product safety in this field (see US slides). JF
2870commented that Electrical Products is another category that has an annex in the EU-US
2871MRA but has not been brought into force. He asked if USTR had any thoughts on why this
2872might be.
287330. USTR suggested that this is because they allow people/companies from any country to
2874apply to the US NRTL process. They are open to having NRTLs in any country that OSHA
2875will review and keep under surveillance. NRTL tests a product and then conducts follow-up
2876visits to make sure the product they tested continues to be the product produced.
287731. SR said that where EU Directives exist on this issue there are some market surveillance
2878risks. As close as some elements of the system might be in the EU and US SR suggested
2879that there were also some important differences that had emerged in the last five years. RS
2880suggested that they discuss this further in the margins, and that this be the topic of further
2881discussion at the next TIWG.
288232. Keith Mason at the EPA set out the agency’s regulatory approach. He explained that the
2883EPA writes a lot of regulations and produces a lot of standards. He offered examples of
2884Voluntary Consensus Standards including on facilitating clean energy source compliance, a 
2885OFFICIAL – SENSITIVE (UK eyes only)
2886
288770
2888programme for office equipment and a compliance guide for composite wood products
2889relating to formaldehyde emissions.
2890Federal/State Split:
289133. JF asked to what extent the federal government is able to regulate US wide and to what
2892extent states are allowed to regulate in a way that diverges from this, asking what this
2893means for trade. Keith Mason suggested that there were two categories: autos and
2894everything else. Generally, there are nationwide standards but the Clean Air Act introduced
2895two systems as California had already acted to regulate emissions when the federal
2896government acted. JF asked what this would mean in practice for a UK exporter trying to
2897sell a car. Keith Mason said that realistically exporters needed to meet the California rule
2898then they could access the whole market. Matthew Jaffe (MF) said it was unlikely there
2899could be anything in an FTA on this. If it were in an FTA, you would need to change the US
2900law that gives California the ability to regulate differently to the federal government: this was
2901not going to happen.
290234. RS said that the group could discuss the state/federal divide in further detail next time. MJ
2903said he was happy to but indicated that he had spoken about it in previous sessions. He
2904said that the EU always brought up the car as an issue, but he challenged the UK to let the
2905US know if it is really a problem, saying the EU/UK usually liked the higher Californian
2906environmental standards so it was unclear what the problem was.
2907Future FTA:
290835. JF explained that he was interested in exploring the scope of what might find its way into a
2909UK-US FTA. DIT is looking at best examples of good regulatory practice chapters and is
2910interested in hearing from the US what they think good looks like. KM asked how the US
2911defines GRPs. RS said the concept of GRPs grew out of work in the WTO TBT committee.
2912Certain principles and approaches in the regulatory environment increased the changes for
2913more auto implementation of decisions made in Geneva. The main principle is around
2914transparency, and a need to notify your trading partners in advance of planned action. It is
2915easier to get concerns in advance than to try to unpick decisions or co-ordinate later.
291636. The US started a programme in Geneva on good regulatory practice – not best regulatory
2917practice. RS explained that the US tends not to focus on the entire ambit of regulation, but
2918to focus on those areas with the most benefit to trade – cherry picking from the WTO: coordination, evidence based decision making and transparency.
291937. RS talked through US priorities in a regulatory chapter:
2920a) Dispute Settlement
2921The TPP chapter on regulatory coherence was not subject to dispute settlement. USTR
2922thinks this needs to be taken seriously however and that the chapter should be subject to
2923dispute settlement. This is important for reinforcing the whole of government approach. It
2924doesn’t mean that a case should always be brought if, for example, a government agency
2925doesn’t publicise a proposed regulation when it said it would, but it does mean there is an
2926avenue to raise these issues if something is going wrong.
2927RS asked about the role of different government departments and the role of the Cabinet
2928Office in ensuring good regulatory practices. JF explained that the CO is a department that
2929co-ordinates policy rather than good regulatory practice per se. 
2930OFFICIAL – SENSITIVE (UK eyes only)
2931
293271
2933b) Information Quality
2934This stems from a desire not to overly burden companies with lots of surveys.
2935c) Transparency
2936This does not just relate to the publication of draft measures. If regulatory agencies are
2937going to rely on an Impact Assessment or other type of assessment they should make
2938information publicly available for comment. This might also include agreements on the
2939minimum length of time for consultation or publication for comment.
2940d) Provisions for expert advisory rules
2941Relatively recently the US has started to include provisions for expert advisory rules in a
2942few trade agreements, taking the form of a standing group of advisory experts.
2943e) Retrospective reviews of regulations
2944These provide an opportunity for private citizens to petition the government. If a regulation
2945is burdensome, or it has outlasted the technology. It also presents an opportunity to
2946suggest that a different standard should be considered, and a pathway to petition the
2947government.
2948JF explained that on almost everything the team had mentioned in this section the UK has
2949a good story to tell. The last time the OECD did a regulatory policy outlook the UK came out
2950at the top against a range of indicators. JF asked if DIT should look to TTIP for the best
2951idea of the US approach to regulation in an FTA. RS said this was a good start, and that the
2952new NAFTA text once released would be the most up to date.
2953GRPs:
295438. RS said that the US would be interested talking about GRPs within the UK government
2955purview and explore if there is something the UK and US could come to an early agreement
2956on in this space. JF asked RS to bring ideas on this to the next TIWG, there are sensitivities
2957on this issue but JF agreed that this is an area of national competence.
2958Regulatory co-operation:
295939. RS turned to regulatory co-operation and explained that the US had been asked to partake
2960in regulatory co-operation committees as part of previous FTAs (they have one with
2961Canada). USTR’s general feeling is that if they are interested in regulatory compatibility
2962they want to do it in a concrete way, involving regulators. The discussion cannot be really
2963general as USG needs to use regulators’ time carefully. USTR is keen to talk more in a
2964specific context with the UK on the guidance US regulators provide and how this might
2965relate to UK regulators’ areas.
296640. Ashley Miller (USTR, joined the meeting late) set out that the US prefers to talk about
2967greater regulatory compatibility rather than co-operation. In the context of NAFTA they are
2968looking at chemicals, auto safety, cosmetics, pharma and medical devices. These are the
2969sectors in which there is key commercial interests on all sides. We should be thinking about
2970similar areas for the UK-US context, where there could be cost savings for both industries.
2971USTR said that industry would like to tell government to accept all approvals given in
2972country X and acknowledge them in country Y but that would clearly get in the way of
2973regulatory sovereignty. 
2974OFFICIAL – SENSITIVE (UK eyes only)
2975
297672
297741. Ashley thought there was scope for the UK and US to lay down global best practices on
2978regulation. UK and US regulators have some of the best standards in the world and both
2979countries should look for ways to capitalise on this. RS said that the regulatory co-operation
2980chapter in TTIP was overly burdensome, and the US wanted any such chapter to be
2981outcome focused rather than focused on a high level political get together.
298242. RS said she would send JF a 2009 paper presented to the TBT Committee at the WTO by
2983the US, Canada and Mexico on regulatory practice.
298443. Ashley said that one of the challenges USTR had in the context of TTIP on Regulation was
2985that there was not a 1:1 conversation between the US regulators and regulators from the
2986MS – instead it was with the EU Commission who hand over Directives and Regulations to
2987MS to be enforced/supervised. She thought there could be scope for further dialogue
2988between the UK and US on this because there could be that 1:1 discussion.
298944. JF asked about the different levels of regulatory compatibility. After regulatory
2990alignment/harmonisation there was regulatory equivalence, then mutual recognition of
2991conformity assessment – if the two countries were looking for relatively rapid progress what
2992is the scope for more Mutual Recognition Agreements on conformity assessment?
299345. Ashley thought there would be scope. There is an existing medical devices single audit
2994programme and a framework that already exists for this. The UK participates as part of the
2995EU but with its own competency. JF asked if the existence of existing international activity
2996was a pre-requisite for movement in this space, or if it was something that the UK and US
2997could move on bilaterally. Ashley said that while the countries should look to leverage
2998existing frameworks existing activity was not a pre-requisite. JF asked USTR to let DIT
2999know if particular sectors start raising desire for MRAs/closer regulatory compatibility with
3000the US.
300146. RS talked through the action points:
3002• US to provide ideas on GRPs and what could be achieved in the short term for the next
3003TWIG
3004• US to provide information on US standards and the US conformity assessment system.
3005• US to send over presentations.
3006• US to send through information on where the US thinks it could move forward with the UK
3007on issues/areas that proved challenging in TTIP.
3008• US to send through information on challenges the US has experienced with the EU on
3009electrical safety.
3010• US to provide information on accreditation bodies.
3011• UK to keep US updated on developments in the Brexit negotiations.
3012• Next meeting of the TIWG to take place in London, potentially in early July. MK suggested
3013that it would be a good idea to “shepherd” some of their regulators to the UK for this for
3014some more in-depth discussions with UK regulators.
3015.
3016OFFICIAL – SENSITIVE (UK eyes only)
3017
301873
3019Title of Meeting: Agriculture
3020Date: 22 March 2018
3021Time: 13:30-15:30 (EDT)
3022Participants
3023Name Department/Directorate
3024Ceri Morgan DEFRA - Global Trade
3025Katie Waring DIT - UK-US Trade Policy Team
3026Russell Stokes DEFRA - Legal
3027James Dunn DEFRA - US Lead
3028Neil Feinson DIT - Goods
3029Jack Moreton Burt DIT - Goods
3030Rhys Bowen DExEU
3031Julie Callahan USTR
3032Roger Wentzel USTR
3033Mara Burr US - FDA
3034Anne Kirchner US - FDA
3035Jay Mitchell USDA/APHIS
3036Lori Tortora USDA/FAS
3037Mary Stanley USDA/FSIS
3038Chris Thompson USDA/AMS
3039Donald Willar USDA/FAS
3040Report of Discussions and Outcome
30411) Defra presented on the Future of Farming consultation and the 25 Year Environment Plan.
3042The presentation highlighted how this is the largest domestic reform since World War II,
3043and the exciting opportunities this will bring. The US welcomed the presentation, asking
3044probing questions on some of the policy aims. They indicated that they would be
3045responding to the Future of Farming consultation document.
30462) Veterinary Equivalence Agreement
3047• USTR sought clarity regarding which agriculture-related regulations are subject to the
3048lift and shift, if there is an obligation to maintain EU harmonized standards, and where
3049gaps exist in regulation during the transition period.
3050• DEFRA indicated that there will be a general lift and shift for continuity for the applicable
3051areas. It is difficult for the UK to provide an exhaustive list now. Continuity is the
3052overarching principle in the implementation period. 
3053OFFICIAL – SENSITIVE (UK eyes only)
3054
305574
3056• USTR asked if US needs a continuity agreement signed by 2019 or by the end of
3057implementation period. They also questioned whether EU or UK rules will apply in a
3058market access issue.
3059• DEFRA said that the UK will be able to negotiate and ratify agreements in the
3060implementation period. Also stated that the UK will continue to be a part of the EU
3061agreements but no longer participating in the political institutions. However, some input
3062will be allowed on a case-by-case basis on issues that affect the UK.
3063• USTR asked about border operations guidance and if the UK would continue to
3064reference the EU facility list. US expressed concern about lead time needed for formal
3065rulemaking process if a new list is needed by the UK.
3066• DEFRA stated the intention was the same and said timelines and examples would be
3067helpful.
3068• USTR asked about the possible acceptance of certificates without additional list.
3069• DEFRA agreed to look into the issue, but warned that there was not necessarily going
3070to be a rapid answer.
30713) Organics
3072• USTR stated that the National Organics Program has the funds allocated for the
3073evaluation and is eager to get started but will wait on the UK’s lead. They believe it
3074should be straightforward exchange of letters for the US. They do need documentation
3075for procedures.
3076• DEFRA is still assessing the potential impacts of such an inspection on other
3077international agreements.
3078• US technical experts are eager to talk to UK technical experts. USTR asked if the US
3079organics office can communicate directly with the UK organics office. Also offered to
3080review language whilst the technical work proceeds.
3081• USTR inquired about the possibility of a working group, currently in the arrangement but
3082as part of a transition discussion. DEFRA mentioned likelihood of active TIWG
3083opportunities around organics.
30844) Spirits
3085• DEFRA acknowledged cross-border issue with Irish Whisky but highlighted new legal
3086phrasing to resolve concerns.
3087• USTR has not had a chance to do a legal analysis on explanatory note. They have a
3088better understanding after discussion but still need to do a complete internal review.
3089They will get back to DEFRA with questions but “feel that we are getting to a good
3090place.”
30915) Wine
3092• DEFRA sent the US an explanatory document the previous week. The document
3093contains an explanation of technical amendments draft text and overarching provisions
3094with reference to EU law. DEFRA asked if USTR had an opportunity to analyse the text
3095or was more time needed.
3096• USTR said they needed time to do some analysis. The conversation will likely be similar
3097from a US perspective.
3098• DEFRA said that there are fundamental questions around timing, but they recognise the
3099challenges of the EU approach and are trying to understand the priorities of UK trading
3100partners.
3101OFFICIAL – SENSITIVE (UK eyes only)
3102
310375
3104• USTR responded that an agreement is needed by March 2019, but time and process
3105constraints mean they won’t end up with the product they want.
3106• USTR and DEFRA did a run-through of the articles in the wine agreement. The US
3107desires mutual recognition of practice. They also pointed out a few areas of concern:
3108annex with Article 7 (“administrative hassle”), Article 9 certification (“don’t have a
3109need”), Article 10 (“if language is kept, make sure it is specific to the objective—tailor it
3110to the bilateral”), and Article 11 (“very proscriptive”).
3111Action Items
3112• USTR to provide information on formal rulemaking timetables regarding new list of facilities.
3113• DEFRA suggested another VTC on Annex 5.
3114• DEFRA and USTR will have a presentation exchange around the command paper.
3115• USTR waiting for DEFRA on organics. Interested in a working group on organics during
3116implementation period. Will reach out to DEFRA to set up a call.
3117• USTR will get back with questions on explanatory note on spirits.
3118• DEFRA conveyed that the next steps can be done on spirits by correspondence. USTR will
3119get back to DEFRA within 2-3 weeks.
3120FOR INTERNAL DISTRIBUTION ONLY
3121Lead Negotiator Analysis/Comments
3122• We had met with Roger Wentzel before the meeting to prepare him for our suggestions on
3123Wine and Spirits. On Spirits, we are cautiously optimistic that our proposal on Irish Whiskey
3124will be accepted but we have not yet heard further. On Wine, there will need to be constant
3125management around what counts as continuity vs a new agreement. US will continue to
3126push against the current text right up to the wire, given the well documented differences in
3127approach to wine regulation in US v EU. The trade flows speak to a need for the US to
3128resolve continuity with the UK.
3129• The VEA is going to require further regulator to regulator dialogue following this working
3130group. Negotiators are in a similar position on the text – it is archaic, but a continuity
3131version will probably carry us through. Regulators are not as convinced on both sides.
3132• On Organics, the US are prepared to wait for the UK to spend more time on operational
3133discussions before agreeing what should be a straightforward text.
3134OFFICIAL – SENSITIVE (UK eyes only)
3135
313676
3137Title of Meeting: Closing Plenary
3138Date: 22 March 2018
3139Time: 16:00
3140Participants
3141Whole delegation on each side.
3142Report of Discussions and Outcome
3143Dan Mullaney (DM) and Oliver Griffiths (OG) both reflected on the week’s discussions.
31441. DM commented that:
3145i. the meetings had gone very well and that all the readouts he had received reflected
3146very good, substantive discussions. New issues had come up that had not been
3147discussed before, and this was a positive thing. It meant that conversations were
3148detailed enough to mean that both parties were uncovering things they were not
3149aware of before.
3150ii. Clear enthusiasm on US side - over 100 people had participated in the talks despite
3151the weather.
3152iii. The regulatory issues thrown up by the conversations were particularly important,
3153and (given the timing of UK/EU talks) important to highlight as early as possible.
3154iv. The message received the week before from SoS Fox and USTR Lighthizer about
3155focusing on what can be done now had been in evidence throughout the sessions.
3156There had been good progress on some of the short-term outcomes. This would
3157ultimately be very helpful in showing markers of progress. In particular there will be
3158a joint economic analysis on Intellectual Property taking place before the next
3159Working Group.
3160v. The continuity agreement discussions had been particularly rich. Some aspects
3161had arisen in the discussions that had not been covered previously – a number of
3162different considerations that the US needs to focus on. DM thanked Rhys for this
3163input on explaining the developments in the Brexit negotiations and implications of
3164the Implementation Period.
3165vi. On the legal side the recent agreement on the transition would have implications
3166for the continuity agreement work and also for the WTO discussion – particularly
3167with respect to the GPA. USTR legal (Alexandra) noted that it would be helpful to
3168have a further conversation between legal teams on both sides once the US had
3169had some further time to consider internally.
3170vii. On services the discussions were identifying a number of things that needed
3171addressing. The conversation this time didn’t focus on telecoms or digital and he
3172welcomed the plan to do more on digital services side and telecoms next time.
3173viii. It had been an event week in the US on trade: DM hoped that the issues the US
3174has with China are something on which the UK and US can work together.
3175ix. DM concluded his remarks by saying it had been a “great set of meetings”.
31762. Oliver Griffiths offered remarks from HMG.
3177i. OG thanked the US for their work in co-ordinating the meetings.
3178ii. The timing had been interesting with so much activity in both the US and the March
3179European Council.
3180iii. On Continuity Agreements there had been good conversations. It would always
3181be tempting to think about how the agreements could be improved, but the UK has 
3182OFFICIAL – SENSITIVE (UK eyes only)
3183
318477
3185a very full agenda at the moment so OG said that it would be good to keep the
3186conversation a technical one. OG reflected that the parties were closest on the
3187spirits agreement.
3188iv. The parties had made great progress on Short Term Outcomes, but important that
3189we continued to push this strand of work to deliver. OG agreed with DM on the need
3190to bring the business voice in more.
3191v. The SME dialogue had been a success, and the UK is looking forward to the next
3192iteration of that. Would be good to think more about how we sequence these with
3193the working groups going forward.
3194vi. OG looked ahead to a time when the UK and US would be neighbours in the WTO
3195and commented that the UK is an emerging voice in the organisation. OG is keen
3196that the UK and US think about this as a progressive partnership and how we can
3197make that partnership work.
3198vii. On the working group sessions themselves, OG welcomed the full discussions on
3199new topics – for example on mutual recognition of professional qualifications. The
3200UK had also very much enjoyed the ROO session earlier in the day.
3201viii. He welcomed the fact that the group discussions were in lots of different policy
3202areas moving away from a quarterly programme to something that feels more like a
3203continuum – for example through regular VTCs. Policy leads were thinking about
3204how best to use successive TIWGs but not just relying on that.
3205ix. OG spoke to the actions coming out of the talks, noting that there are many. Among
3206them, a series of papers on trade secrets/standards and conformity assessment;
3207joint work on a joint economic study. OG reflected that we should do more of this
3208detailed information exchange as we go forward, and that there will be a plethora of
3209follow-up meetings.
3210Rhys Bowen (RB) noted that he had had a very useful discussion on continuity agreements at the
3211White House. Lots of the issues that were discussed were the same as those that had arisen in the
3212context of discussions with the Commission. RB noted that HMG is very aware of the legal
3213consideration of the plans for transition still on-going on the US side. RB noted that HMG is grateful
3214for this, and that there would need to be further legal-to-legal discussions around issues including
3215multilaterals. RB committed to keeping the US updated on developments in the Brexit negotiations.