An influential committee of MPs has urged the Government to ‘think very carefully’ before entering into a trade deal with the US.
The US is currently the UK’s largest single-country trade partner, with trade valued at over £160 billion. In a report echoing many of the NPA’s concerns over potential future UK trading arrangements with the US after we leave the EU, the International Trade Committee says pursuing a trade agreement with the US could have a transformative effect on the UK economy, ‘for better or worse’.
It urges caution, in particular, on the subject of how to approach regulatory co-operation in a future UK-US agreement, a point that has been frequently made by the NPA and other agricultural organisations who fear such a deal could open the UK’s doors to food produced to lower standards than are in place in the EU and UK today. For pigs, this could include sows kept in stalls and the hormone ractopamine in rearing pigs.
The MPs note that the big ‘win’ in modern trade agreements is the reduction of non-tariff barriers, primarily attributable to differences in regulatory regimes.
“The UK, as an EU member state, and the US have very different approaches to regulation, standardisation and conformity assessment. The EU’s regulatory model is highly centralised, and uses a precautionary approach whereas the US tends to adopt a more de-centralised, risk-based (otherwise known as science-based) approach to regulation,” the report says.
“Any increase in regulatory co-operation is likely to have economic benefits. However, pursuing a comprehensive FTA with the US, including on regulatory matters, could also give rise to regulatory barriers with the UK’s other major trading partners, depending on the approach taken,” the report says.
“We heard that this risk existed for the automotive, agriculture and chemicals sectors, although all also saw opportunities in the US.”
With this in mind the committee calls for the Government to be clear, before entering into any trade negotiations, about the relative weight it intends to give the interests of different sectors within the UK economy.
It adds: “Irrespective of the Government’s future approach to regulatory cooperation, we welcome its assurances that it will not lower existing product safety, environmental and animal welfare standards in a UK-US agreement.”
NPA response
NPA senior policy advisor Ed Barker described the report as ‘very important contribution’ to the debate on our post-Brexit trading arrangements.
“This report contains some very important messages for senior figures in Government looking to the US as our first port of call after we leave.
“Echoing many of our concerns, it advises that a US Free Trade Agreement shouldn’t be entered into for its own sake; there have to be obvious gains and equally there have to be safeguards against our own producers and products, with full parliamentary scrutiny.
“We agree with the report’s conclusions that we should look to all options, such as possible bilateral trade, as opposed to being fixated on an FTA, and must think of our wider export strategy. In pigs we have achieved a lot just on bilateral trade in the past five years.
“We welcome the recommendation that the Government should openly detail the effects of a USA FTA on the economy and on specific sectors, including food and farming goods, which could potentially be a big loser.
“And above all, the Government must accept that, as the MPs conclude, regulatory barriers are key, not just to protect our market but in terms of how changes in our standards to accommodate the likes of the US could massively affect how we trade with other blocs, such as the EU.”