A Message From Duncan Edwards, CEO
On March 1st, the United States Trade Representative, Robert Lighthizer, published the negotiating objectives for a future US-UK free trade agreement (FTA) which triggered a mini avalanche of comment in the British newspapers (much less in the USA). Unsurprisingly, the part of the document (which you can read here) that has caused the most fuss is the US requirement for market access for various agricultural products including chicken meat and beef. The UK as part of the EU (for now), and the US have different regulations for the growing and preparation of food for consumption which means that certain foods from the USA are not allowed to be sold in the UK.
Clearly, the problem is not one of food safety as some of the comment in the UK suggests. The US is a regulated market and would not allow food to be sold in its home market which was unsafe to eat; as Ambassador ‘Woody’ Johnson put it in an opinion piece in the Daily Telegraph, the US view is that it uses more advanced agricultural technology and it’s time the UK (and the EU) caught up.
As an organization which believes in free trade and open markets, we find the position of the US understandable. Like nearly all markets, the EU regulations for food safety serve a dual purpose, one of course is to maintain a high standard of quality for food, but the second is to protect the farmers within that market by blocking, or at least significantly reducing foreign imports. Crucially, and not that visible in the reporting, were these imports allowed, it would undoubtedly lead to a lower cost for the consumer and for many people, food accounts for a high percentage of their spend. Having said this, it is also easy to understand the British governmental reluctance to agree to this US objective in the negotiations to come; firstly the EU is not going to change its regulations, so British farmers will need to stay in line if they want to export to the EU; second, some form of protection for farmers is understandable and commonplace and, thirdly, the sheer vehemence of the opposition (correctly informed or not) makes acceptance almost politically impossible. Perhaps labeling and open consumer choice is the route through but even this seemingly reasonable solution has its problems.
I appreciate that BAB members are not largely in the agrifood business, but the reason this issue is worth highlighting is the potential it has for derailing the whole FTA process. The track record for major international trade agreements in the USA is not good; both TTIP (US EU) and TPP (US Pacific) failed for various and different reasons and the USMCA (new NAFTA) is not guaranteed to get through congress. At BAB we have supported the idea of an FTA between the UK and the US as the UK leaves the EU but would hate to see it fail because of an issue which is of modest materiality to the overall economic relationship. We have reminded both the US and UK governments that business, trade and investment between the US and the UK is actually pretty good and the risk of making it worse whilst in pursuit of perfection is real. In business, pragmatism rules and the same should be true in trade deals!
At BAB our program of events to support co-operation and trade between the US and UK continues apace; we held a series of meetings in Washington DC with US government representatives and BAB members, and our reception with the BritishAmerican Parliamentary Group at the Speaker’s House in Westminster was a real highlight of the month. There’s much more to come and I look forward to seeing you at one of our events in London or New York in the month ahead.