Leaving the EU: Negotiations

Stephen Lloyd Excerpts

Tuesday 10th July 2018 Commons Chamber

[Sir Vince Cable]

Well, there are Members of the House—I am one, and the right hon. and learned Member for Rushcliffe (Mr Clarke) is another—who have experience of dealing with the United States through negotiations on the Transatlantic Trade and Investment Partnership. Several things were very clear. First, although the United States is important, it is considerably less important than the European Union in terms of our trade—it is about 18% versus 43% of our exports. There are undoubtedly some benefits to be obtained through a completely free trading arrangement with the United States; for example, there are few high-tariff points. However, by far the largest obstacle is public procurement, which is decided in the United States at state level, not federal level. The potential benefits of opening the US market are actually very limited.

The key point is that the United States made it very clear then and is now making it even clearer that it is only interested in entering into a bilateral trade agreement if it opens the market to American agriculture. That is not compatible with the Government’s commitment to maintain the regulatory rulebook on food safety and agricultural products. It is to the Government’s credit that they have agreed to do that, but it almost certainly makes it impossible to reach a trade agreement. Indeed, Wilbur Ross, the Trump Administration appointee, has made it clear that the United States will not enter into serious negotiations if freer agriculture for foodstuffs through regulation is not permitted.

[Stephen Lloyd (Eastbourne) (LD)]

On that basis, is not one of the challenges that the severe Brexiteers never mention the fact that the Americans use a great deal of chlorine in the preservation of food, and unless we have a proper regulatory framework, as we do currently, there is a real danger that those kinds of foodstuffs will come into the United Kingdom?

[Sir Vince Cable]

Yes. There is a whole series of well-known instances relating to beef hormones, genetically modified foods and chlorinated chickens. I do not know how well based the arguments are scientifically, but clearly that will demand a repudiation of those European standards. The Government’s stance—again, this is a positive—makes it clear that concessions cannot now be given on those items and that it will be impossible to reach a trade agreement with the Trump Administration in practice, if not in theory.



The negatives are even clearer than the positives. One of them is the sheer workability of the arrangements. The right hon. Member for Haltemprice and Howden has said quite categorically that the arrangements he has been involved in designing for months are simply unworkable, and it is very clear why that is the case. If we have a differential tariff system, it is very cumbersome to enforce. There is an obvious temptation to smuggle. A company producing within the European Union but not in the UK will import through the UK at a lower tariff, and it would be necessary to have a sophisticated tracking system to identify where the product has gone. In complex supply chains with hundreds of widgets flying backwards and forwards, it is impossible to see how that could be done in practice. The right hon. Member for Haltemprice and Howden was well aware of that, and the European Commission is well aware of it, which is why it almost certainly will not pass to the next stage.