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UK plan to cut US farming tariffs sparks ministerial spat

UK trade

UK plan to cut US farming tariffs sparks ministerial spat

International trade secretary Liz Truss wants to offer incentives to help seal trade deal

US agriculture exports to Europe are subject to a tough tariff regime © Melina Mara/Getty Images

The UK government is drawing up plans to slash tariffs on US agricultural imports to advance progress on a trade deal despite concerns from some ministers and Conservative MPs about the damage they could cause to British farming.

Government officials told the Financial Times that the Department for International Trade was preparing to offer a “big concession package” to US negotiators in the coming months that would reduce the cost of some agricultural imports to unlock a trade deal with Washington.

The package to liberalise tariffs has been led by Liz Truss, international trade secretary, who is overseeing the UK-US negotiations. But she has faced internal opposition from environment secretary George Eustice, who is concerned that cheaper US goods may undercut UK farmers. Cabinet office minister Michael Gove also shares Mr Eustice’s concerns.

Senior figures at the Department for Environment, Food and Rural Affairs are concerned that reducing tariffs could be “the thin end of the wedge”, leading to further UK concessions on animal welfare standards. Officials said that government was presently only considering reducing tariffs, not adjusting its food welfare and safety standards to align with the US.

“[George] Eustice and Defra wanted a level playing field on animal welfare. Defra has argued that you can’t lower tariffs for US agriculture when they’re produced at a much lower cost due to their welfare standards,” one Whitehall official said.

As the UK and EU continue negotiations on their future partnership after Brexit, the Johnson government is eager to strike a trade agreement with the Trump administration before the presidential election in November, when a new administration may take a different approach.

One DIT official said, however, that plans for tariffs had not been finalised. “The US-UK negotiations only started last week — it is far too early to talk about any tariff changes. We’ve been clear that we will get a deal that works for the whole UK, including our farmers. Any trade deals must be reciprocal too.” An ally of Mr Eustice said “these decisions are still to be made”.

One person from the agriculture industry said: “If the government refuses to take into account the last eight weeks of Covid — and think again about consumer welfare in respect of any US trade deal — that would be antagonistic, arrogant and damaging.”

Sam Lowe, a trade expert at the Centre for European Reform think-tank, said a “big offer” on agriculture would be necessary to make any trade deal acceptable to the Trump administration and US Congress.

“The US has long seen its beef, chicken and pork shut out of European markets because of high tariffs and restrictive regulations. If the UK is able to table an offer that deals with all of these concerns, then a trade deal can be done,” he said, adding that such concessions “might prove controversial with British farmers and consumers”.

Nick von Westenholz, director of EU exit and international trade at the National Farmers’ Union, said British farmers would be “very concerned” about the government’s proposals, especially during the “volatility” of the coronavirus crisis.

“Any concessions UK negotiators give on market access — such as lower or zero tariffs on agricultural goods — must be accompanied by clear conditions on how those goods have been produced,” he said. “Anything else would represent a clear breach of the government’s own explicit red lines in trade negotiations.”

The issue of whether to open up the UK’s agriculture market to America is divisive among Conservatives. While pro-Brexit MPs are eager to reduce trading barriers, others are concerned at the impact it will have on farming as well as welfare and safety standards.

The Tories’ 2019 election manifesto pledged not to reduce standards in the pursuit of trade deals. “In all of our trade negotiations, we will not compromise on our high environmental protection, animal welfare and food standards,” it said.

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