This was the latest in number of 60 minute CPD sessions held by the IAGRM and this one featured Cynthia Guven, the US Agricultural Counsellor based in London and Nick von Westenholz, Director of Trade & Business Strategy at the NFU. In a hour between them, Nick and Cynthia covered a huge amount of ground and some of the more pertinent points (to me anyway!) seemed to include:
- trade in agricultural and food products is of critical importance to the US: US agri food exports account for some US$ 150 billion per annum. This has a big impact not only on the farm and rural economy, but also in other parts of the supply chain regarding economic development and job creation etc. The US has a trade surplus of some US$ 10 billion in agri food products
- the UK has always been an important market for the US. We are the leading market for US agri food products in Europe and are one of the top 5 export markets for the US per se
- US products such as nuts and dried fruit, wine, seafood, citrus, some other fresh fruits etc. have always been an important part of the export mix to the UK
- besides this trade - the US and UK have always benefitted from a strong degree of historical and cultural affinity
- the US also imports a range of high value UK agri good products, such as cheese, beer, whisky, salmon, biscuits and organic products
- since the mid 1970s, the US Farm Bill has been supporting the development of a more sustainable US agri food system. In this respect, the UK and the US have a lot in common, as they both also want to access new international markets – particularly the case for the UK, in a post Brexit scenario
- for the UK, Brexit has been the main focus of trade policy for much of the last 4 years. While the agreement with the EU reached sees no tariff barriers and quotas, the early days of our new trading arrangements have seen the use of non-tariff barriers slow down UK exports to the Continent. Some of this could also be accentuated by the impact of COVID on European demand. But as these NTBs are revised in the period between April and June, there could well be more trade friction between the UK and EU to come
- future UK priorities will include the development of Free Trade Agreements (FTAs) with the US and Oceania countries, but we have to recognise that these sort of trade deals are very much a “2 way street”. As large scale agri food producers and exporters, it is not unreasonable to expect them to want access to the UK market too
- other trade deals with the likes of Canada, Mexico and Japan are, in effect, almost “roll over” agreements based on what we had when still in the EU, at least for the time being, but more detailed re negotiations might well follow in the future
- beyond securing trade deals with the likes of the US, Australia and NZ, the UK is keen to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) which is an FTA between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam
- UK domestic policy for the agri food sector seems sometimes at odds with its policy for international trade. The balance between the provision of public money for public goods and phasing out of production subsidies, but also aligned to a desire for further trade liberalisation is likely to produce a tough environment for UK agriculture and food. There is a need to “step up” and look to compete internationally. The balance between effective domestic and trade policy might be a difficult one to achieve
This was a fascinating session. It probably could have gone on for longer – normally a good sign. As if we didn’t know it, in any trade deal, there will be winners and losers, but the whole process of Brexit has opened up the discussion on this in the UK on how we grow exports in the future in a way not seen before. Thanks to Cynthia and Nick for sharing their thoughts, and to my good IAgrM colleague, Carl Atkin for chairing this.
Divisional Director, Promar International and FIAgrM.