Ministers today claimed a Transatlantic trade deal could add £3.4billion a year to the UK economy – as they dismissed fears over Donald Trump raiding the NHS or chlorinated chicken hitting the shops.
The UK is pushing for a Transatlantic deal at the same time as negotiating a new relationship with the EU – in a bid to increase pressure on Brussels to offer good terms.
The mandate for talks says an agreement could boost UK workers’ wages by £1.8billion and ‘lower prices on key consumer goods’.
Scotland could be the biggest winners, with whisky and salmon exports expected to rise, while the North and Midlands could see more car trade and Wales send more lamb to America.
But critics have pointed out that the estimated long-term boost of 0.16 per cent for UK PLC is far less than what it is forecast to lose from looser ties with the EU.
The government says it wants to open up opportunities for British businesses and investors in the US through a free trade pact, but insists the NHS will not be up for grabs. It also stressed food standards will be maintained.
The British team also wants to guarantee high standards and protections for British consumers and workers, including on animal welfare.
Boris Johnson (pictured left yesterday) has been warned not to ‘cosy up’ to Donald Trump (right at the White House yesterday) in looming trade talks
The government said a deal with the US could add to the economy in all areas of the UK. Scenario 1 refers to tariff liberalisation, while Scenario 2 would be a deeper trade deal
As the mandate was formally revealed, Trade Secretary Liz Truss said: ‘In a trade deal with the US, we will not diminish our food safety standards and we will also not put the NHS on the table.
‘If we don’t get the deal we want we will be prepared to walk away.’
Mr Johnson said: ‘We have the best negotiators in the business and of course, we’re going to drive a hard bargain to boost British industry.
‘Trading Scottish smoked salmon for Stetson hats, we will deliver lower prices and more choice for our shoppers.
‘Most importantly, this transatlantic trade deal will reflect the unique closeness of our two great nations.’
The talks will take place in parallel alongside the bartering with the European Union over a post-Brexit relationship.
The UK’s approach to a Transatlantic trade deal was revealed today
Ministers have repeatedly faced demands to rule out chlorinated chicken and hormone-treated beef being imported from the US in any deal, with animal welfare and environmental concerns raised.
The 184-page mandate published today say an agreement with the US could help productivity and competition.
Scotland would be among the areas to benefit most, with boons for Scottish salmon and whisky, and lowering tariffs on cashmere, clothing, and high quality meat.
‘DIT’s own analysis suggests productivity gains from a UK-US FTA could contribute to wage increases of up to £1.8 billion for UK workers in the long run,’ it said.
‘Lowering tariffs could also both reduce the price of key consumer goods imported from the US in addition to reducing the cost of imported goods used as inputs for domestic production, with total annual tariff reductions on goods imported from the US of up to £493 million per year.
‘The US should remove the punitive tariffs imposed following the WTO’s ruling on Government subsidies to Airbus.
‘The UK continues to support a negotiated settlement to the Airbus and Boeing. For example, some 62 per cent of all US goods imported into the UK and 42 per cent of all UK goods exported into the US are used in supply chains, where extra gains could also be found from lowering barriers.’
A post-Brexit trade deal with the US is estimated as having the potential to grow the UK economy by 0.16 per cent, according to the Government’s negotiating objectives.
The £3.4billion yearly increase outlined in the document published on Monday was predicted under the best-case scenario where the UK eliminates import tariffs with the States.
But if only ‘substantial tariff liberalisation’ is achieved, then the increase estimated in 15 years was put at 0.07 per cent, or £1.6billion, in the Governments’ preliminary assessment.
While the US trade blueprint contained an assessment of the possible economic impact, the outline for talks with Brussels published this month did not contain any such assessment.
Downing Street said that was because ‘we are at a more typical start point for a free trade agreement negotiation’ whereas with the EU ‘we are starting from a position of alignment and co-operation which goes beyond the typical starting point for an FTA’.
The Government has said it will ‘invite contributions about the economic implications of the future relationship’ with the EU from a ‘wide range of stakeholders’ in a public consultation.
Mr Johnson has committed to obtaining a Canada-style deal with the EU, which previous Treasury analysis suggested could shrink the UK economy by 4.9 per cent.
The best scenario outlined on Monday was where a ‘deeper trade agreement’ with ‘full tariff liberalisation’ and a 50 per cent reduction in non-tariff measures is struck.
Under this, real wages for workers were expected by the Department for International Trade (DIT) to increase by 0.2 per cent, or £1.8billion.
The scenario predicting a smaller boost to the economy was based on a 25 per cent reduction of non-tariff measures and a ‘substantial tariff liberalisation’.
Liberal Democrat international trade spokeswoman Sarah Olney accused the PM of being ‘seemingly hellbent on risking UK prosperity’.
‘Boris Johnson has repeatedly claimed that negative impacts of Brexit will pale in comparison to the benefits,’ she said.
‘But today’s analysis is clear: the gains from the best-case trade deal with Donald Trump will not come close to outweighing what we expect to lose from leaving the EU.’
Treasury analysis predicted that a trade deal with the EU similar to Canada’s would damage the UK economy by 4.9 per cent of GDP by 2035, compared with remaining in the bloc.
Leaving without a trade deal in place was estimated in the November 2018 study at having a 7.6 per cent blow.
Labour MP David Lammy, a prominent Remain voice in the party, cited the analysis and said: ‘So now you admit the potential economic benefits of a UK-US trade deal are just plus 0.2 per cent of GDP.
‘In what planet does this boost wages or create jobs for anyone except the Tory Cabinet?’
Labour accused ministers of making ‘false promises’ over commitments to protect the NHS and standards.
Shadow international trade secretary Barry Gardiner said: ‘This is a Government that has sought, at every opportunity, to resist efforts to lock in our high standards and to ensure robust protections for our NHS.
‘Their false promises are meaningless – they have said they won’t undercut our food standards while briefing that chlorinated chicken and hormone-fed beef are perfectly acceptable.
‘That is why there must be a full and proper scrutiny process for this and all trade agreements.’
The Department for International Trade (DIT) said it expects manufacturers of ceramics, cars, food and drink, and professional services to be among the British industries to benefit the most from tariff-free access to the US market.
Crawford Falconer, DIT’s chief trade negotiation adviser and formerly New Zealand’s chief negotiator, will oversee talks on the UK side.
Negotiating rounds will alternate between the UK and US.
International Trade Secretary Liz Truss said: ‘Striking ambitious free trade agreements with our partners around the world is one of the key opportunities of Britain becoming an independent trading nation once again.
‘This deal with our biggest single trading partner will cut red tape for our small businesses, cut tariffs for our great products from dairy to cars and increase growth in all four nations.’
TUC general secretary Frances O’Grady said the Government should be ‘focused on getting a good trade deal with the EU – not cosying up to Donald Trump’.
‘A bad trade deal with the US will put working people’s jobs and rights on the line,’ she said.
‘And it will undermine our vital public services, environment and food standards. ‘Nobody voted for chlorinated chicken or for US corporations to have more access to our personal data.’
International Trade Secretary Liz Truss (pictured today) said striking trade deals was one of the main benefits of Brexit
The Confederation of British Industry (CBI) said it was ‘encouraging’ to see overarching ambitions in the negotiation mandate, due to be published in full on Monday, to make it simpler for skilled workers to cross the Atlantic for work.
CBI director general Dame Carolyn Fairbairn said: ‘The UK is beginning a brand-new chapter in its global future, and a good trade deal with the US is a vital part of that story.
‘It’s encouraging to see the Government’s ambitions to make it easier for skilled people to move between the UK and US, support small business exporters and future-proof any agreement around industries of the future.
‘The US and UK already share the world’s largest bilateral investment relationship; now is the time to use it as a springboard for new jobs and investment here at home.’
The British Chambers of Commerce (BCC) said a great deal of its members were ‘enthusiastic’ about the prospect of closer trading ties with such a major economy.
Following Britain’s divorce from Brussels in January, it is now free to strike global trade deals.
Foreign Office Minister Wendy Morton was dispatched to Uruguay and Argentina on Sunday, with trade one of the items on the agenda.