A trade deal with the US would be a defining moment for the UK. It is not an exaggeration to say it would reveal the country’s direction of travel more than any other decision in the aftermath of Britain quitting the European Union.
Amid the confusing array of government pledges – more police and more spending on the regions while also cutting taxes for the better off (mostly in London and the home counties) – it is the basics of any trade deal that will set Britain’s course for decades to come.
The most emotive questions apply to agriculture, and not just in the UK. It’s fair to say that American farmers can get very emotional about access to foreign markets, especially when they have put more time and effort into producing cheap food than probably anyone else in the world.
US policymakers have long understood that cheap food and cheap energy are the bedrocks of a flourishing economy. In the modern era, they are the keys to higher disposable incomes when wages are flat. They allow workers to maintain some semblance of their living standards from year to year while the producers and owners of capital walk off with the bulk of any gains.
Free-trade ministers like Liz Truss, Dominic Raab and even the prime minister understand this too. Give the people low-cost food and lightly taxed energy and they won’t complain much when employers say the wage bill must be kept under control to maintain shareholder dividends and bosses’ bonuses. To a great extent, this urge to lower costs through tax cuts and deregulation was the motivation for the rich elite (on both sides of the Atlantic) to promote a clean break with the high-tax, regulation-heavy EU.
In terms of regulation and tax, Britain has trodden a line between the US and continental Europe for the last 40 years, keeping VAT on domestic energy at 5% when in Germany it is almost 20%, and freezing fuel duty every year since 2010 to keep down prices at the pumps.
Agriculture was a different matter. Locked into the EU’s common agricultural policy, UK producers had some protection from foreign competition and prices were kept relatively high.
A trade deal with the US provides the opportunity to marry cheap energy to cheap food. However, the shift to cheap food involves a philosophical gear change, one that has been clear since the US started negotiations with the EU over trade under the Obama administration.
The notorious Transatlantic Trade and Investment Partnership (TTIP) was already foundering on the rocks of agriculture when Donald Trump canned the talks in 2017.
The difference between the two sides centres on safety. US regulators believe the only test of food is whether it is safe or not. Beyond this, the state abdicates responsibility. If the consumer wants livestock to be treated decently, they can choose to pay the producer more.
But the Tory MP George Eustice said earlier this year that “a modern trade deal is not simply about commerce, it is also about values”. His objection to US food is not just about chlorine-washed chicken and beef injected with hormones, bad though that is. He couldn’t support the importing of animals treated as meat to be thrown around, in life and in death, when Britain considers them sentient beings to be treated with some respect.
Eustice will be asked to shelve his concerns about the treatment of animals when trade talks begin, just as he will be told that any agreement must protect US corporations from consumer boycotts, and – in a nod to Benjamin Netanyahu – prevent boycotts of Israeli companies too. Along the same lines, big tech firms must be allowed to bundle products in the name of efficiency, giving them the room to build the monopolies that the EU has denied them.
Of course free marketeers like Truss, Raab and even Eustice, even if they can reconcile themselves to the destruction of much UK farming, will find this export of US protectionism hard to swallow (along with American chicken, which has rates of campylobacter infection 10 times higher than in the UK, despite the chlorine wash). But to achieve the goal of cheap food and cheap tech, swallow them they must.
John Bolton, Trump’s national security adviser, waded into the debate last week on a trip to London. He said the US was prepared to strike discrete deals covering separate industries. But that’s not the way it works. Soon after Bolton’s intervention, the US farm lobby put him right, making it clear agriculture must be included or farmers would be camping on the steps of Capitol Hill. For different reasons, Britain’s farmers, and some consumers, will also be feeling angry, though probably not angry enough.