Greg Hands is Minister of State for Trade Policy at the Department for International Trade, and is MP for Chelsea and Fulham.
It’s great to be back at the Department for International Trade, working with Liz Truss. Today, we have one of key milestones in our bid to re-establish Britain as an independent, free-trading nation, with the publication of our strategic case and scoping assessment for our first Free Trade Agreement – that with the United States of America.
Liz will be setting out in the Commons later today our overall approach, and how the negotiations will begin very soon in earnest. This is therefore a big moment for Global Britain.
Trade with the USA, our closest friends and allies, has always been close to my heart. Indeed, for 13 years I lived in the US, and saw at first hand not only our close trading relationship, but also how much more we could export to the US: whether high quality cheese like cheddar and stilton, British beef and lamb, cars and parts from the West Midlands and the North East, or financial services from London and across the UK, and much more. The United States is the world’s largest and most dynamic economy, and is our largest bilateral trade partner.
Our scoping assessment shows there could be a £15.3 billion expansion in overall trade between the two countries, an 18 per cent increase on 2018 levels. The analysis also shows that UK workers would be in for a £1.8 billion pay rise, as a result of new export markets realised.
Ceramics from Stoke-on-Trent could have the 28 per cent tariff reduced or removed entirely. Bentleys from Crewe and Aston Martins from Warwickshire or Wales could have their tariffs removed too, and other non-tariff obstacles to their sale States-side. Sales of UK cheese like Stilton and Cheddar are already strong in the US, but currently face tariffs of up to 17 per cent, which could be brought down as a result of this agreement. The US maintains a broad tariff regime across a number of key UK products, including up to 13.5 per cent on jewellery, 11 per cent on bicycles and 20 per cent on leather goods.
It’s no wonder UK companies and export groups I have spoken with in recent days, as diverse as the National Sheep Association to the British Ceramics Confederation, have shown such interest in this proposal for a Free Trade Agreement.
Both countries are already committed to helping Small and Medium-Sized Enterprises (SMEs). The UK has 5.9 million SMEs, but less than 10 per cent of them export. The US, as already our largest export market, is a natural place to start.
Nor are the potential beneficiaries only goods exporters. Last year, we exported £46 billion of services to the United States. The two countries are the world’s largest exporters of services. The US has already stated it is seeking ‘state of the art’ provisions in digital trade. We can work together to write the global rules on digital trade, including provisions that facilitate the free-flow of data, whilst ensuring that the UK’s high standards of personal data protection are maintained. We will seek commitments to support the reduction or abolition of business and consumer restrictions relating to access to the US digital market.
Our analysis shows that every region and nation would benefit from this agreement.
So a Free Trade Agreement with the US is a great opportunity for us. It also makes sense for the United States. We would become the largest economy that they would have a Free Trade Agreement with, and seeking an agreement already commands broad support not just from the President himself, but across both parties in the Senate and Congress.
Last week, Liz and I met Ambassador Robert Lighthizer, the US Trade Representative (USTR). He has said that “for sure, the UK is a priority. It’ll be a really big deal.” Last summer, 45 of the 53 Republican Senators signed a letter calling for such an agreement. Many Democrats have also shown their support for deepening the trade relationship with the UK. I know, from the years I spent living in the United States, how many friends this country has across the country, from coast to coast.
Of course, there will be critics and opponents. Some will have legitimate questions. The UK has been clear that there will be no lowering of animal welfare, food safety or environmental standards. But much of the opposition will come from protectionist voices or from the Far Left. We need to engage with real concerns, but also be robust in defending our position against those with a political agenda.
We have more such agreements to come; our top priorities also include Japan, Australia, New Zealand and the CPTPP. Our manifesto pledge is that within 3 years, 80 per cent of all UK trade will be covered by such agreements.
On my return to the Department for International Trade, I was pleased to see so much progress in getting our negotiation teams ready to deal. We have created a world-class negotiation team, overseen by Crawford Falconer, one of the world’s great trade experts, who has now been with us for two years and has built the world-class team we now have.
So today, I call on all Conservatives to get behind the Prime Minister and Liz Truss when she makes her statement to the Commons. This isn’t just an announcement – but a key building block in our future outside of the European Union. It will be a vital focus of work across the whole of the Government throughout 2020.