Representative organisations for the US food and agricultural sectors have stressed the importance of eliminating existing barriers to trade in any potential agreement with the UK post-Brexit.
Free and fair trade, relaxation of the current EU-imposed restrictions on geographical indications, rules of origin, safety barriers, tariffs and complex red tape were among the common themes to emerge from a hearing hosted by Edward Gresser, the assistant to the United States Trade Representative (USTR), and chair of the Trade Policy Staff Committee.
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The UK is governed by EU rules when it comes to trade with the US, which could change once Brexit is enacted, at present scheduled for 29 March.
US dairy and meat industry representatives told the hearing existing arrangements are skewed in the UK’s favour, putting American dairy and meat farmers at an unfair disadvantage.
Craig Thorn of the US-based National Pork Producers Council said any negotiations with the UK “offer a historic opportunity to achieve free and fair trade”.
David Carlin, representing the International Dairy Foods Association, said a trade agreement should provide US producers with “meaningful market access across all dairy” categories, while tariffs and other barriers need to be removed to offer a “level playing field” to American exporters.
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By GlobalData“As a member of the EU, the UK tariffs on US dairy imports are significant,” Carlin stressed. He said the UK received US$3.1bn in dairy imports in 2017, with only $8.8m coming from the US, while $3bn originated from the EU.
“Assuming tariffs are eliminated, there are opportunities for the US to export larger amounts of cheese, butter, whey, and milk powders, as well as cream, yogurt, buttermilk, and condensed milk to the UK,” he added.
Carlin cited two areas where existing EU regulations would need to be improved in any post-Brexit deal: geographical indications, which he said are an “attempt by the EU to monopolise use of certain cheeses and other food names the United States and many other countries regard as generic”; and “retaining the use of product names that have long been commonly used in the United States and around the world is a critical issue for the US dairy industry”.
In terms of pork, Thorn at The National Pork Producers Council said US producers had long been locked out of the UK and EU despite the country’s record on safety, quality, and affordability.
“If the terms of Brexit allow the UK to negotiate trade agreements consistent with its pro-market principles, we see the potential for an important and mutually beneficial agreement,” he said. “However, if the UK agrees to remain part of the EU customs union or to maintain regulatory harmonisation with Europe, it will be difficult or impossible to achieve the kind of agreement that would benefit US agriculture and the pork industry.”
Thorn pointed to what he called excessive tariffs on US pork, set by the EU at 70,000 metric tons, which represents less than 1% of the bloc’s consumption. And he said the UK must adopt a “science-based approach to sanitary and phytosanitary regulation (SPS) and eliminate WTO inconsistent EU SPS barriers”.
Meanwhile, Shawna Morris of the National Milk Producers Federation and the US Dairy Export Council, said there is a “lopsided trade dynamic” between the United States and the UK, predominately driven by “disparities in market access”.
“The negotiation of a US-UK trade agreement represents a valuable opportunity to invest in the American dairy industry by incentivising the UK to import more American dairy products,” Morris said. “Post-Brexit, if the UK exercises its independence to establish a regulatory framework that’s more conducive to fair trade and safe food products, we see strong potential to expand bilateral dairy trade and bring benefits to both sides of the Atlantic.”
She added a potential trade agreement must include recognition of US dairy safety systems and “replace multiple and complex certificates and associated requirements that continue to shift over time”.
On the subject of geographical indications, Morris said US producers must be able to export to the UK common-named dairy products such as parmesan and feta and “other terms well recognised by consumers on both sides of the Atlantic”.
And with regards to rules of origin she added: “In light of the highly-integrated nature of UK and EU dairy trade today, strict product-specific rules of origin that concentrate the benefits of the agreement on the US and UK dairy sectors are needed to ensure that the UK is not used as a processing hub for European companies to export their dairy products and milk to the US, while benefiting from the terms of the agreement.”
With respect to agricultural commodities, Floyd Gaibler of the US Grains Council, said the UK would have to abandon the so-called reference pricing system imposed by the EU under any future trade deal, a system that limits the import of lower-price grains from non-EU countries on top of the quotas currently in place.
“Assuming that the UK would adopt the reference system duties and the remaining portions of quotas that would have to be distributed, we would advocate that the US government should demand the UK eliminate the price reference system and commit to zero duties for US corn, barley, sorghum, dried distiller grains and its co-products,” Gaibler said.
“So the US and the UK need to consider a transparent, science-based and systematic approach to normalise trade and avoid these tariff and non-tariff barriers.”
