A trade deal with the United States is top of the government’s post-Brexit priority list. It believes this would confirm that the UK does not need Europe to access a big export market. It is being encouraged by the Trump administration, and London’s enthusiasm for such a deal is not blunted by some harsh economic facts.
Reports suggest a trade deal with the US would have more of a psychological than an economic impact. This is particularly so for agriculture. The US is an exporting nation for farm products. It is an aggressive, low cost supplier using technology banned in much of the EU and is well placed to take advantage of a trade deal to supply the UK food market. American opportunities for British agriculture and food are harder to see, other than for some specialist products.
There is also ample evidence that under the Trump administration the US can be a difficult trade partner. Trump scrapped and replaced the North America Free Trade Agreement; he also scrapped a trade deal with China, ended discussions on a trans-Pacific alliance and is proving difficult over a trade deal with the EU. Food has been drawn into a battle between Boeing and Airbus, with the European dairy industry likely to be hit with punitive tariffs on exports to the US. This does not mean a trade deal with the US should not be pursued, but it would be wrong to believe it would offset losing free access to the EU-27.
It may be possible to change trade relations over time, but as of now the EU-27 is by far our biggest market. It accounts for half of UK exports and thanks to the single markets is easy to supply. New trade deals will be more complex and will be based on a bilateral agreement rather than the legal texts that underpin the EU single market. China is on the government’s target list, but as things stand UK exports to the Netherlands are worth more than our total exports to China. Many see the freedom to conclude new trade deals as the big financial bonus of Brexit but progress will not be easy. Trade negotiation traditionally take years rather than months. The EU will be our competitor and it has already locked up trade deals with key countries and is in negotiation with others on the UK target list. Trade deals are ultimately about numbers and the UK has to compete with 60 million consumers against the EU’s 500 million population .
We can think of what is happening now between London and Brussels in terms of a divorce or relationship breakdown. That it is going to happen is beyond question, but there is always a danger in seeing your past love only in negative terms. In reality they have good aspects as well as bad, and where you stand on the leave to remain spectrum is linked to how many positives you see in the EU. Only the most ardent remainer would not find fault, but when we move on we need to demand the good parts of what we are leaving behind. If this is not the case we risk regrets.
In agriculture it is easy to see the bad sides of the EU. This is about red tape, cross compliance, inspections, greening and all the other things that tempted thousands of farmers to vote to leave. Farmers in the EU-27 will still face those, but after 2020 they will still have the certainty of direct payment. By contrast our future support is an unknown and there is no evidence of red tape slashing being planned.
The EU also did some good things we have forgotten. Think back to when food scares from salmonella to BSE decimated the industry and we have cause to be grateful for the European Food Safety Authority’s as an honest broker; the EU Rapid Alert system also countered recent threats from contaminated eggs and shone a spotlight on poor practices in the Polish meat industry. This underpins faith in food, but a key issue is whether the UK can monitor its new trade allies. Add to this mix things like support for young farmers of right, an aggressive food promotion budget, the power that came from being part of the European farming lobby, the benefits of shared science in research and it is clear that not all aspects of the EU were bad.