US-UK farm trade

US:UK farm trade was to the fore as US Embassy Agriculture Counsellor Stan Phillips briefed Farmers Club members at the latest Monday Evening Lecture.

To book a place at the next Farmers Club Lecture – from NFU President Minette Batters on Thursday 5th July (after Club AGM) – visit Events page of Club website http://www.thefarmersclub.com/events.

US:UK trade issues were keenly debated as US Embassy Agriculture Counsellor Stan Phillips gave Farmers Club members a detailed briefing at the latest Monday Evening Lecture in mid-April.

 

Clearly, both President Donald Trump and Prime Minister Theresa May are keen for a deal. But deals are time consuming, full of surprises, right up until the deal is struck, and long afterwards, as details are agreed and interpretations clarified, Mr Phillips, a UK-based employee of the USDA, explained to an attentive audience in the Farmers Suite.

 

US farm product exports currently amount to over $140bn, with a $21.3bn trade surplus with the rest of the world. Exports to the UK account for $3bn, second only to the Netherlands within the EU. The UK ships around $1bn of food and beverage to the US, plus a further $1bn of Scotch whisky, which falls under a separate classification.

 

A key US import into the UK is Californian wine, over $200m of sales making the UK its second biggest export destination after Canada. The “salmon switch” sees UK Atlantic salmon fillets shipped to the USA and a similar value of Alaskan tinned salmon shipped back to the UK. Woodchip from the US for UK biofuel was mainly one-way traffic and growing very rapidly.

 

Any future UK:US trade deal would take time to agree, he noted. “My experience from working on a trade deal with South Korea was that it took seven years to reach agreement.” Even when a deal is made, the real negotiation is only just beginning, as the meaning of every word and how it can be interpreted is deliberated, be that around a deal with the US, Asia or anywhere.

 

In a wide-ranging discussion it emerged that the system of political representation differed greatly between the US and UK. Each US state has two senators in the US senate, irrespective of the state’s population. So, very rural, agricultural areas have a disproportionate influence on Senate business, giving agriculture a great say in trade negotiations. Any UK:US deal would need to include agriculture, and in a way that those senators would be able to back, Mr Phillips noted.

 

What shape the final Brexit deal may take was unclear. “Negotiations can sometimes take strange turns. It has been said that nothing is agreed until everything is agreed. When the more difficult questions are being asked I think we’ll get a better idea.”

 

He felt WTO rules would allow UK farmers to benefit from a significant level of domestic support. For the USA the WTO limit amounted to $19bn/year. Crop and livestock enterprise insurance could have a crucial role to play too, protecting farmers on the world market.

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