The UK government this week published a 180-page document outlining its ambitions for a trade deal with the US post-Brexit. Published by the Department of International Trade, it reveals no crock of gold at the end of the US rainbow, with benefit to the UK economy over 15 years estimated between 0.07% and 0.16% increase in GDP.

This miniscule benefit is between 30 to 70 times less than the cost to the UK economy of leaving the EU with a Canada-style free-trade agreement, also over a 15-year period.

If the UK cannot reach a deal with the EU and leaves as planned at the end of this year, then the benefit of a deal with the US is between 47 and 108 times less than EU membership for the UK.

Both of these estimates are produced by UK government departments and clearly demonstrate that there is no deal better for the UK economy than EU membership.

The cost of Brexit for the Irish economy is strikingly similar.

According to a report produced on behalf of the Irish Government, the economic impact of Brexit on Ireland would be a loss of between 7% under no deal and a loss of 4.3% if the UK secured a Canada-style free-trade deal. The comparable figures for loss to the UK economy are 7.6% under no deal and a 4.9% loss with a Canada-type trade deal. (Table 1).

The UK government figures demonstrate that there is no economic benefit of Brexit, but there is a significant cost. A trade deal with the US was presented as the great economic opportunity for the UK.

Trade deals with other economies such as Japan and South American countries may have some marginal benefits. However they are unlikely to surpass anything that would be achieved as an EU member.

EU and US negotiation

It was largely symbolic for the UK to publish its negotiation position with the US on the day that talks started with the EU on a future trading relationship, though it comes a year after the US published its position. It is the UK’s stated intention that both negotiations would have equal priority and therefore run parallel.

Variance with US document

The US published its ambitions for a trade negotiation with the UK in February 2019 and there is a considerable difference in priorities when comparing both documents.

From a farming perspective, what is most interesting is the apparent opposing positions on access to the UK market for agricultural produce.

This means acceptance of a chlorine wash for chickens and hormone-treated beef

In the US document, it is clear that a substantial deal with the UK depends on level of access of agricultural goods produced to US standards. This means acceptance of a chlorine wash for chickens and hormone-treated beef.

The UK document states that it “will not compromise on our high environmental protection, animal welfare and food standards” but will “uphold the UK’s high levels of public, animal, and plant health, including food safety”.

They also want to “secure broad liberalisation of tariffs on a mutually beneficial basis, taking into account UK product sensitivities, in particular for UK agriculture”.

Vagueness in language

The document doesn’t explicitly rule out accepting hormone beef or chlorine-washed chicken imports from the US and the language is sufficiently vague enough to leave scope for interpretation.

DEFRA minister George Eustace suggested that policy would be guided by science

Phrases like “without exception, imports into the UK will meet our stringent food safety standards” suggests a maintenance of the status quo.

However, in a recent television interview, DEFRA minister George Eustace suggested that policy would be guided by science, and the US would contend science supports their production system.

Conflict with the EU

Any relaxation of UK policy in this area would put the country in conflict with the EU, with whom the first round of negotiations took place in Brussels on Monday afternoon. The EU bans growth-promoting hormones and limit the use of chlorine wash in production on the “precautionary principle”, as opposed to a scientific basis.

This dispute only concluded recently in an agreement between the EU and US to ring-fence 35,000t of a total 45,000t tariff-free quota

This position was rejected by the WTO in a case brought by the US at the start of the century and like the case of the recent Airbus judgement that went against the EU, the US was authorised by WTO to impose retaliatory tariffs on EU exports to the US.

This dispute only concluded recently in an agreement between the EU and US to ring-fence 35,000t of a total 45,000t tariff-free quota for the exclusive use of the US to supply (hormone-free) beef to the EU.