A UK-US free trade agreement? Don’t count your (chlorinated) chickens just yet

Tony Heron - Professor of International Political Economy, University of York and Parliamentary Fellow, House of Commons International Trade Committee

‘Global Britain’ and the politics of food

For Brexiteers and Thatcherite Conservatives, the  idea of a free trade agreement with the US has long been considered the ‘jewel in the crown’ of the UK’s post-EU trade possibilities. Equally, for some in the US, the UK market is seen as a key prize, especially American agribusiness grown used to EU recalcitrance to agricultural liberalization, symbolised by the latter’s hostility to genetically modified (GM) crops, hormone-treated beef and chlorinated chicken. Further, the economic damage caused by President Trump’s trade war with China has generated sizeable export surpluses in the US, desperate to find an alternative outlet.

In this setting, it is tempting, as some have done, to interpret the dual tariff proposal as a significant policy shift for the UK – and a further signal that Boris Johnson’s government is intent on radically transforming the UK’s model of political economy – including its ‘high cost’ model of agriculture. This is entirely possible. There are, however, at least three good reasons to doubt the significance of both the dual tariff proposal and idea that chlorinated chicken will find its way onto UK supermarket shelves – at least, not any time soon.

First, as I have argued elsewhere, although the idea of a ‘Brexit dividend’ in the form of ‘cheap food’ has considerable support among Brexiteers and right-wing thinktanks like the Legatum Institute, it is notable just how few in government have been willing to make this case explicitly. The qualified exception to this was Liam Fox during his time at the Department for International Trade (DIT), although his pronouncements were invariably oblique and highly coded. When in government Fox was fond of declaring that ‘there will be no lowering of UK food standards’, while also remarking that US food standards are not ‘lower’ than those of the EU, just ‘different’. But neither Fox nor his successor, Liz Truss, have come close to explaining to the British public what the economic (as opposed to the pragmatic) merits of agricultural liberalization might be, even though this argument is there to be made.

Second, and perhaps more revealing, is the manner in which the dual tariff proposal was announced. Like numerous other Brexit-related stories involving agriculture, the dual tariff proposal found its way into the public arena via a government leak to a sympathetic newspaper. This suggests that the issue remains unresolved and what can be described politely as a ‘conversation’ is still ongoing between different government departments. This much we already know. In a recent article for The Guardian, the well-connected deputy editor of The Spectator, Katy Balls, described the battle lines inside the cabinet over food standards as between ‘Waitrose protectionists’ and ‘Lidl free traders’.

According to Balls, current Trade Secretary Liz Truss is leading the charge for the ‘Lidl free traders’, with the backing of the majority of the cabinet and – it seems – public opinion, with Balls reporting that 62% of voters are favorable to a US free trade deal. Yet, before we get too carried away with this statistic it is also worth noting that public opinion surveys regularly reveal almost universal support for the maintenance of current UK food standards. What we know from the history of international trade is that ‘public opinion’ is almost never a reliable basis for building a free trade coalition – and that consumers are notoriously indifferent to the economic benefits of freer trade. Further, arguments for free trade based on increased ‘consumer choice and affordability’ need to be understood in a context in which nearly three quarters of grocery sales are accounted for by the ‘big four’ retailers (Tesco, Asda, Sainsbury’s and Morrisons). It is also worth noting that almost all non-EU sources of poultry consumed in the UK come in highly processed forms (ready meals, chicken nuggets, etc.) in which the origins and methods of production are almost impossible to determine. Finally, arguments for ‘cheap food’ need to be weighed against the fact that the typical British consumer now spends as little as 10% of their earnings on food and even for the bottom quarter of income earners the figure is still only 15%.               

The third reason for doubt is the most obvious. When UK-US trade negotiations were re-launched in March 2020, it was widely assumed that Donald Trump was comfortably heading for a second term on the back of buoyant stock market and employment data. Now, however, the President’s erratic response to Covid-19 and the Black Lives Matter protests (and much else besides) has left the outcome of November’s election far from certain. Meanwhile, Trump’s Trade Representative, Robert Lighthizer, has told Congress that a free trade deal with the UK is ‘unlikely’ before November and impossible in any timeframe unless the UK accedes to US demands on agriculture.  

It is too early to know how the election of a Democratic administration led by Joe Biden could change the political dynamics of the UK-US negotiations. But whoever wins November’s election will only have six months to conclude a deal before the executive’s trade negotiating authority expires – by which point the political momentum generated by the alignment of populist-nationalist movements on both sides of Atlantic could have all but disappeared.     

Tony is writing here in a personal capacity and his views in no way reflect the opinions of the ITC or its members.