Trade Restrictions on Luxury Products, Iron, and Steel

Under the luxury goods export ban, those subject to UK jurisdiction are prohibited from exporting specified luxury goods to or for use in Russia. The ban also prohibits the following activities:

• Supplying or delivering luxury goods from a third country to a place in Russia;
• Making luxury goods available to a person connected with Russia;
• Making luxury goods available for use in Russia.

Asset Freeze

All accounts, and other funds or economic resources, and any funds owned or controlled by designated individuals and entities in the UK must be frozen and UK persons must refrain from dealing with frozen funds or assets unless authorized. As with U.S. blocking restrictions, reporting and anti-circumvention requirements apply.

• Bank Rossiya
• Black Sea Bank For Development And Reconstruction
• Joint Stock Company Genbank
• IS Bank
• Public Joint Stock Company Promsvyazbank
• Gennadiy Nikolayevich Timchenko
• Boris Romanovich Rotenberg
• Igor Arkadyevich Rotenberg

In addition to general negotiating objectives across numerous areas – including trade in goods, services, and agriculture; intellectual property; digital trade and cross-border data flows; labor and the environment; trade remedies; anti-corruption; and dispute settlement – TPA also establishes procedures for consultation with Congress and other stakeholders throughout trade agreement negotiations. These procedures include required reports on certain aspects of the agreement prior to signing the agreement; Congressional notification 90 days before signature; release of the final agreement text 60 days before signature; and Congressional notification of expected changes to U.S. law 60-180 days before signature. USTR also engages with public and private sector stakeholders through consultation with various policy- and sector-oriented trade advisory committees and through comment periods and hearings announced in the Federal Register.

The United States began bilateral negotiations with the EU in July 2013 in an effort called the Transatlantic Trade and Investment Partnership (“TTIP”). The last round – the 15^th – of those negotiations took place in New York in early October 2016, during the Obama Administration. While the Trump Administration’s new trade talks with the EU will likely build on some aspects of the prior negotiations, it is unclear at this point how previously agreed upon terms will be treated. Notably, the interests of the United Kingdom, as a member of the EU, were represented in those earlier TTIP negotiations. As a result of the UK’s exit from the European Union, the Administration now intends to enter into a separate trade agreement with the UK. As stated in USTR’s notification letter to Congress, those discussions will begin “as soon as {the UK} is ready after it exits from the European Union on March 29, 2019.” In its Congressional notification letters regarding both the EU and the UK, the USTR cited challenges from multiple tariff and non-tariff barriers, leading to chronic U.S. trade imbalances.

The United States and Japan also have a history of trade negotiations, but in the context of the multilateral Trans-Pacific Partnership (“TPP”) among 12 countries. Although the United States signed a completed TPP agreement in February 2016, that deal was never ratified by the United States, which withdrew from the agreement on January 23, 2017. Japan was instrumental in corralling the remaining 11 countries to sign a modified agreement called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (“CPTPP”) in March 2018. Until as recently as September 26^th of this year, Japanese Prime Minister Shinzo Abe had resisted the idea of bilateral talks with the United States, instead favoring the United States’ return to the CPTPP. Recent discussions on the potential for the United States to impose 25 percent tariff on automobile exports from Japan apparently brought Japan to the table. “Japan is an important, but still too often underperforming, market for U.S. exporters of goods,” USTR said in its letter to Congress. “U.S. exporters in key sectors such as automobiles, agriculture, and services have been challenged by multiple tariffs and non-tariff barriers for decades.”

Noise from the UK suggests a strong belief that the UK can leave the EU but maintain trading privileges, including tariff-free and frictionless trade. Not so, says EU Chief Brexit Negotiator Michel Barnier. Barnier has made clear that the UK cannot have its desired legal autonomy without the free movement of EU citizens and the jurisdiction of the European Court of Justice and at the same time continue to enjoy access to the EU market and customs union privileges. Without access to the market and customs union, the UK faces tariffs and customs formalities that mean time and money for UK businesses and exporters. With access to the market and customs privileges, the UK cannot negotiate trade deals with other countries.

Only so many options exist for the future relationship of the UK with the EU. The so-called “Norway” option would mean continuing access to the EU market but without any say by the UK in the applicable rules and would entail customs procedures. The alternative “Turkey” option would mean a customs agreement but with controls to ensure compliance of goods and services with EU rules. In both cases, the UK would get less than it enjoys today and would not achieve its desired regulatory autonomy; moreover, the UK would remain blocked from negotiating free trade arrangements with other countries.

If initial negotiations on the rights of EU citizens, the UK’s financial obligations, and the complex Irish border issue go well, the EU and UK could be discussing the terms of their future relationship as early as the fall of this year. That may be a big “if”.