Insight
Dig for Victory?
by Christopher Haskins, Christian Odendahl and Beth Oppenheim 16 November 2017 A UK trade deal with the US will create more problems for British agriculture and food consumers than it would solve. Brexiteers imagine global trade to be a panacea, confident that a deal with the US could offset trade lost with the EU. But US governments are known for driving a hard bargain in trade negotiations, and Donald Trump is pursuing US producers’ interests more aggressively than any administration in recent history. Trump’s trade policy agenda states that the president intends to use ‘all possible leverage’ to gain access to foreign markets. The American farm lobby is also more powerful than its British equivalent, and is likely to fight its corner vigorously. But US demands would threaten the viability of many British farms. Moreover, the conditions set by the US would create problems for a ‘deep and comprehensive’ trading arrangement between the UK and the European Union, as well as for the Irish border. British farmers and consumers would be better off if Britain aligned its policy closely with the European market. When Britain joined the European Economic Community (EEC), the EU’s predecessor, in 1973, the government agreed to make a substantial contribution to the Common Agricultural Policy (CAP), despite Britain’s small rural population, in return for market access to British export goods. For Europe, the CAP was a way of reconciling member-states’ conflicting demands on agricultural policy. But the CAP has been an irritant to politicians of all British parties ever since. It has been seen as protectionist, inefficient, featherbedding farmers, and costly. Leaving the EU, the argument goes, would liberate British agriculture and allow freer trade in agricultural products. The EU has made painstaking progress in dealing with the CAP’s shortcomings. The policy’s share of the EU budget has almost halved since the early 1980s. Subsidies are no longer tied to production but take the form of direct payments to farmers, paid by the taxpayer, not the consumer; and member-states have been empowered to tailor subsidies to local needs by, for example, capping direct payments to large farmers (which the UK government did for Scotland, Northern Ireland and Wales, but not for England). Export subsidies and production quotas have been phased out. And because high standards for food CER INSIGHT: Dig for Victory? 16 NOVEMBER 2017
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