Page 16 - BREXIT 2
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The Worshipful Company of Farmers The Worshipful Company of Farmers 15
choice and lower prices for all parts of the UK UK ” Because trade negotiations are a a a a a a a a UK UK (not devolved)
competence and because the the the government is is well aware of of of the the the sensitivity of of of the the the issue of of of some US food standards the the document highlights benefits to the the UK regions and and opportunities for exports of high high quality UK UK food products For example the the mandate for the the UK-US FTA contains promises of bolstering existing trade in in in Scottish salmon and and Scotch whisky while lowering (US) tariffs on on cashmere clothing and and high quality meat It flags the the possibility of greater access for lamb and and dairy producers and and reducing the the present 17 6% tariff on Cheddar cheeses It asserts “that the agreement will “ensure high standards and and protections for UK consumers and and workers and and build on on on on our our existing international obligations This will include not compromising on on on on our our 16 high environmental protection animal welfare and and food standards” The Worshipful Company of Farmers However it fit is eye-catching how small the the estimated benefits to UK GDP will be be from these FTAs
For example in in the the the the UK-US FTA i i i i i i e e e e e e e e e e e e e e with agreement the the the the largest economy in in the the the the world outside the the the the EU two scenarios were analysed Scenario 1 with ‘substantial tariff tariff liberalisation and 25% reduction of actionable non-tariff measures and and regulatory restrictions’ Scenario 2 ‘full tariff liberalisation and and 50% reduction of actionable measures’ The potential increase in in long run UK GDP under these two scenarios was estimated to to range from 0 0 07% to to 0 16% respectively equivalent to to to between £1 6 6 to to to £3 4 billion In relation to to to the the sums involved in in Brexit these do not seem seem large! Compared to to the the the contraction in GDP due to to the the the Covid-19 pandemic they seem seem trivial The gains to to to the the US economy are estimated to to to be smaller than to to to the the UK On food and agricultural trade the the DIT analysis shows that the the average UK tariffs17 on US exports are 4% for agriculture 16% for for for processed processed foods foods and 14% for for for other processed processed foods foods The corresponding figures for for for tariffs facing UK exports to the the US are 1% 8% and 4% i i i i e e e e e e e e much smaller But the the frequency of Non-Tariff Measures (NTMs) faced by UK exports exports greatly exceeds those facing US exports exports Such figures seem to indicate the the the US has more to to gain in in in these sectors However it it it is clear in in in the the the report that both sides have sensitivities about agricultural and and food trade particularly sugar milk cheese and and meat It is customary for such products to deploy exceptions and the use of of tariff tariff rate quotas (i e e e e e e e e e e e e e limited quantities of of reduced or or tariff tariff free imports) It is is the the small details of trade agreements which matter: the the precise products concessions and quantities These details may only emerge late in the process of negotiation There is is is less analysis in the the published DIT papers on on the the trade negotiations with Japan Australia New Zealand and and and the CPTPP The total UK economic benefits of FTAs
with Australia and and and New Zealand combined are naturally as they are much smaller smaller economies even smaller smaller than the the the figures cited above for the the the US They range from 0 0 0 0 01% to 0 0 0 0 02% of of UK GDP for the the same two scenarios as above For all of of these trade agreements it fit is clear that the the greatest benefits for the the UK are better access to markets in in services of all kinds as as well as as certain goods and and e-commerce Japan is also seen as a a a a a a a a a greater opportunity for expanded UK food exports and and and and is not seen as a a a a a a a a a a a a threat to to UK agriculture and and and and agri-food sectors However Australia and and and and New Zealand are are already large exporters to the UK for agricultural and food products including wine These are are seen as sensitive for the UK 15
UK-US Free Trade Agreement p5 https://assets publishing service gov gov uk/government/uploads/system/uploads/attachment_data/file/869592/UK_US_FTA_negotiations pdf 16 Op cit p9 17 These refer to the the the EU EU common external tariff which applied in in in all EU EU Member States including the the the UK until the the the end of 2020 14 

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