Caroline Spelman is the Member of Parliament for Meriden and is a former Environment Secretary
Hardly a week goes by in which I don’t see a huge car
transporter making its way to Southampton docks from my constituency in the
Midlands – the embodiment of our export-led recovery. Did you know that a white
Range Rover is the chauffeured car of choice in emerging markets retaining at
£200,00 a pop? The luxury brands are selling well, but so too are British-made
mass volume cars and for the first time in a long time we are a net exporter of
These market opportunities could be greater still if a
bi-lateral trade agreement could be struck between the US and the EU – as envisaged by David Cameron, who announced formal negotiations to reach one yesterday. The motor
manufacturers on both sides of the Atlantic can see huge advantages in mutual
recognition of each other’s regulations, since this would save costly adaptation of
models without compromising safety. A
US-EU trade deal would account for over 50 per cent of global trade, and the
significance of this is that we can then call the shots on standards.
This is incredibly important at a time when emerging markets
are growing in significance because we need the global standards to be ours.
The likelihood is that manufacturers like those in Japan would want to join our
standards, and that is the way a global standard is born. That would give our industry a huge advantage,
and enshrine the high standards we expect to protect motorists, their
passengers and other road users. It would have been a triumph of global
diplomacy if a global trade agreement had been achieved under the Doha round,
but this proved just too big a mountain to climb in these difficult times.
So bi-lateral trade deals are second bes -, but one between
the world’s two biggest trading blocks would be a very good second. It is estimated that an EU-U. trade agreement
could be worth £19bn to the UK economy. The
attraction to the US of accessing the EU’s 500m consumers on preferential terms
is mirrored by the attraction to EU exporters of an American market of 316m
consumers buoyed up by cheaper energy than ours. The political leaders see the
opportunity, but Barack Obama has made it clear this deal needs to be done in
timely fashion, and not drag on as Doha did.
The European Commission will lead these negotiations but Ken
Clarke carries the responsibility for alerting them to UK interest on this. My
own experience of negotiating internationally under an EU banner is that an
enlightened Commissioner will maximize the benefit of special relationships
such as ours with America. The motor
industry is just one example of what could be achieved through a bi-lateral
trade agreement, but it is a good one since American companies are heavily
invested here and there are close links through the US ownership of British
companies. The tie up between FIAT and Chrysler is just one example of this.
The motor manufacturers see regulatory reform as a top
priority and have been working through a process in Geneva to narrow down the
sticking points. An example of this is that European cars for export to the US
have to pass a safety test for unbelted occupants, as seatbelts are not compulsory
there. This intriguing example shows how mutual
recognition of manufacturer’s endeavours to improve safety would open up new opportunities.
This is especially important for specialist manufacturers of, for example, sports
cars – because the smaller production numbers make the extra hoops and hurdles
uneconomic. Emissions standards are another example, since the individual states in
the US have different ones, making it harder for our exporters. whereas in the EU
we have a common standard and that brings savings to our manufacturers and
those who export to us. It is projected that a US-EU trade deal could increase
motor vehicle exports from the UK by up to 25 per cent and jobs by 7 per cent.
So I would expect to see many more lorry loads of cars from
the Midlands manufacturing – but his time heading to the Atlantic gateway. The
Transatlantic Trade and Investment Partnership (TTIP) is a once in a generation
opportunity to boost the economies on both sides of the Atlantic by billions of
pounds at a time when we really need it.