US-UK trade would impact farmers

The International Trade Secretary, Liam Fox MP, was in Washington DC earlier this week to discuss how the existing trade relationship will change once the UK leaves the EU. Both sides want to sign a deal as soon as possible after Brexit. 

Fox launched a new Trade and Investment Working Group with the United States, to prepare the groundwork ahead of the launch of formal negotiations after the UK leaves the EU.

For Scotland’s farmers there are two key questions – will agriculture be included in a trade deal, and if yes, what standards would US produce have to meet?

It is difficult to envisage a trade deal with the US not including agriculture, and the US Farm Bureau’s policy position on the TTIP negotiations with the EU is likely to be the basis for any agreement between the US and UK as well.

Hormones and chlorine

This was summarised into six points, including access for all products and elimination of non-tariff trade barriers, meaning hormone-treated beef, plus chlorine-washed beef and chicken carcases would have access to the UK. There was also strong opposition to geographic indicators, which of course would directly affect Scotch beef and Scotch lamb.

The UK may negotiate for hormone-free beef. There is precedent, as the US dropping its action against the EU for banning hormone beef in return for a tariff-free quota for non-hormone beef, however, the US has reopened this “deal” in recent months, because other countries have used it, reducing US market access. 

The EU is deemed to have violated WTO rules by banning meat produced with growth hormones and it is hard to see how the UK could also ban US beef on this basis without clashing with the WTO.

Scottish farmers have adapted to producing beef without hormones – the practice was banned almost 30 years ago – and would not stand for hormone-produced, acid-washed beef sitting on supermarket shelves alongside Scotch.

Hormone-free Scotch beef would command a premium over any alternative, but the reality is that if imports were dramatically cheaper, the overall market would come down. Even if there was still a Scotch premium, it could be over a much lower base.

There could be opportunities for Scotch beef and lamb in the US, but supplying manufacturing beef is a huge challenge, given that Scotland doesn’t use lactic acid in its processing system.

Animal welfare standards

The UK should transpose all EU laws on animal welfare into domestic law, according to a House of Lords report published this week. While the UK currently has some of the highest farm animal welfare standards in the world, the greatest threat to these standards post-Brexit would come from UK farmers competing against cheap, imported food from countries that produce to lower standards.

“We heard evidence of undeniable concern that opening up the UK market to free global trade poses a number of issues,” said Lord Teverson, chair of the EU Energy and Environment sub-committee.

“We urge the Government to secure the inclusion of high farm animal welfare standards in any free trade agreements it negotiates after Brexit.”

Consumer choice will be what drives demand for products produced to these standards. But awareness of the of the difference between production systems is low.

The committee also called on the government to ensure that the industry is able to retain or recruit qualified staff to fill crucial veterinary roles post-Brexit.