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Food fight looms over Liam Fox’s trade mission to US

The UK seeks post-Brexit ties with Washington but importing GM food and chlorine-rinsed chickens will be highly contentious.

U.K. Trade Secretary Liam Fox will use his trip to Washington on Monday to lay the groundwork for a U.S-U.K. trade deal with an offer of 24 “confidence building” agreements — just as a political row blows up at home over the safety standards of potential U.S. food imports.

The British government is keeping the specifics of the two dozen preliminary deals close to the vest, but business people familiar with the U.K.’s push for a post-Brexit trading framework with Washington said they didn’t expect them to be controversial. Fox will also visit Mexico and Texas on his transatlantic visit to explore British interests in sectors ranging from airport construction to oil and gas.

Far more contentiously, however, as part of a deal with the U.K., Washington wants to establish a joint agricultural science committee that could sign off on the safety standards of goods traded between the two countries, according to people familiar with the talks.

This is liable to revive a vitriolic debate over the sort of farm goods that America exports: genetically modified goods, chlorine-rinsed chickens and hormone-reared beef. Public resistance to such products across Europe proved to be decisive in effectively killing off a trade deal between the European Union and the U.S. last year.

A big shake-up in U.K. food import regulations — stepping back from the EU’s far stricter regime — would prove difficult to sell in London, where new Environment Secretary Michael Gove, a political beast big enough to take on Fox, has laid down a marker of his intent to fight any watering down of food safety standards.

Fox, with the backing of Foreign Secretary Boris Johnson, is already reported to be open to allowing the import of chlorine-washed chicken. But Gove, who was praised by environmentalists and farmers for a speech last week pledging a “green Brexit,” is determined to maintain the U.K.’s reputation for rigorous food safety and animal welfare standards, an individual familiar with the cabinet split said.

“He thinks it can be Britain’s USP [unique selling point],” the individual said.

Food price fears

That could prove a difficult argument for Gove to win, however. The falling value of the pound is driving food price inflation in Britain, and with the possibility of tariffs on EU imports after Brexit, supporters of a quick U.S.-U.K. trade deal say agreements with countries in the Americas could ease the price pressure on consumers.

The Adam Smith Institute think tank, which promotes liberalization of global trade, said Monday that U.S. chlorine-washing methods for chicken meat production were a fifth less expensive and that the U.K.’s trade negotiators “should be authorized to permit the import of chemically disinfected poultry.”

Responding to the emerging clash, which goes to the heart of the dilemmas a free-trading, post-Brexit Britain will face, Prime Minister Theresa May’s official spokesperson said he was “not going to comment on hypotheticals,” but added: “Our position when it comes to food is that maintaining safety and public confidence in the food we eat is of the highest priority. Any future trade deal must work for U.K. farmers, businesses and consumers.”

Tough to be the little guy

Britain is styling Brexit as a prime opportunity to cut free from the strictures of negotiating deals as part of the EU, and U.S. President Donald Trump is highly sympathetic to that agenda. The property tycoon said this month that Washington was working on a U.K. trade deal that would be “very powerful, great for both countries” and vowed that it would be concluded “very, very quickly.”

But trade officials in Brussels are also skeptical about the scope of what is on the table. They point out that Britain will have to move very quickly after Brexit to try to replicate the broad raft of EU-U.S. trade arrangements that will no longer apply to London when it crashes out of the EU in March 2019.

EU trade with the U.S. is underpinned by a long list of agreements in sectors ranging from aviation and marine technology to data and wine. Britain will need to replace those after Brexit.

As the far smaller economy anxious for a quick deal, Pierre Defraigne, head of cabinet to former EU Commissioner for Trade Pascal Lamy, noted that London would be on the back foot in terms of securing a good deal.

“From a strictly trade perspective, the U.K. is actually the requesting party and in a hurry. Britain will have little room for maneuver,” said Defraigne, who now works as executive director at the Madariaga-College of Europe Foundation think tank.

“That means America will be able to take advantage of the situation unless it takes into account the so-called special relationship between London and Washington, which I don’t think it will. Trade negotiators are mercantilists at heart and don’t give any gifts away,” he added.

The U.S. trade representative’s office, the government agency responsible for trade policy, declined to comment on the plans.

Shanker Singham, director of economic policy at the Legatum Institute think tank, whose work on the U.K.’s trading future is influential in the U.K.’s trade department, said there was “much to be gained by a comprehensive deal, including even in previously intractable regulatory and financial services areas.”

He stressed that the U.K would “have big interests in improving the regulatory environment for its services exports, ensuring it is not hit by onerous ‘Buy America’ provisions, and improving access for defense and related sectors.”

In a report on a potential U.S.-U.K. trade deal, Legatum said the basis for a deal already existed, with the two countries imposing relatively low tariffs on one another’s goods. The report said the deal should go further and “seek to reduce non-tariff barriers and address behind the border barriers and regulatory distortions” between the two countries.

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However, it also warned that a deal would have a “number of challenges” including U.K. consumers’ concerns over lower regulatory standards on farm products.

Legatum argued that the U.S.-U.K. agreement “can be used to agree appropriate, proportionate standards for such agricultural products, based on sound scientific evidence,” and recommends the agreement “should seek to eliminate unnecessary SPS (sanitary and phytosanitary) measures and import controls that act as barriers to trade.”

A U.S. Commerce Department official said Commerce Secretary Wilbur Ross would welcome any agreement on farm standards that was based on “true science.”

Doug Palmer and Hans von der Burchard contributed reporting.