With Biden and Trump set to go head-to-head in the US Presidential election in November, and the UK also confirmed to go to the polls this year to decide on its next Prime Minister, this blog looks at the evolving landscape of UK-US trade deals and the potential impact on the British dairy sector. It might well be described from enthusiasm to reality.
Brexit trade deal optimism
Remember the optimism during the EU Leave campaign? Amidst the debates and promises, one point of reassurance stood out for many UK businesses, including British dairy: the prospect of a lucrative trade deal with the US. At the time, then-President Donald Trump suggested that such a deal could be quickly and easily achieved. This potential agreement was painted as a major benefit of leaving the EU, offering new opportunities and markets for British products.
Fast forward to today, and the landscape looks quite different. With Joe Biden now in the White House, the enthusiastic predictions of a swift UK-US trade deal have not materialised. Biden’s administration has shown little interest in prioritising a standalone deal with the UK, shifting focus towards other domestic and international concerns.
For British dairy farmers, this change in the political wind leaves many questions unanswered. Why hasn’t a deal come to fruition, despite the earlier optimism? What are the main obstacles standing in the way? And how could a potential trade deal, or lack of, impact livelihoods?
The reality check: political changes in the US and obstacles to a UK-US trade deal
The initial optimism surrounding a UK-US trade deal was significantly influenced by the political climate in the United States. During his presidency, Donald Trump expressed a keen interest in forging a strong bilateral trade agreement with the UK. This stance was part of his broader approach to redefining America’s trade relationships worldwide, prioritising deals that he believed would benefit the US economically and strategically.
However, the political landscape shifted dramatically with the election of Joe Biden in November 2020. Biden’s focus has largely been on domestic issues, such as managing the COVID-19 pandemic, economic recovery, and infrastructure improvements. Internationally, his administration has prioritised addressing global challenges like climate change and strengthening alliances with NATO and the European Union. This broader, multilateral focus means a standalone trade deal with the UK is not at the top of Biden’s agenda.
Moreover, Biden has personal and political ties to Ireland, which have influenced his cautious approach towards UK trade negotiations, especially considering the sensitive issue of the Northern Ireland Protocol. This agreement, part of the Brexit deal, aims to avoid a hard border between Northern Ireland and the Republic of Ireland, and any trade agreements must respect this delicate arrangement.
One of the most significant obstacles preventing the realisation of a UK-US trade deal is aligning regulatory standards. The UK and US have different approaches to food safety, agricultural standards, and environmental regulations. For instance, the US allows certain farming practices and food additives that are banned in the UK and the EU. Bridging these regulatory gaps is complex and politically sensitive.
Implications for British dairy farmers
For British dairy farmers, the absence of a trade deal with the US presents both challenges and opportunities. On one hand, a trade agreement could provide access to new markets for British dairy products, potentially boosting exports and providing new revenue streams. However, the regulatory differences and potential competition from US dairy imports could pose significant challenges. Without a trade deal, British dairy farmers must navigate a landscape of uncertainty and adapt to the existing trade environment. While the US market remains a potential opportunity, farmers should also explore alternative markets and strengthen existing trade relationships within the EU and other regions.
Maintaining high standards for food safety and environmental practices can help UK dairy products remain competitive and trusted in international markets. Advocating for government support and policies that bolster the dairy industry will be crucial. This includes subsidies, trade promotion, and investment in sustainable farming practices.
Alternative markets and strategies
Given the current challenges in securing a UK-US trade deal, exploring alternative markets is essential. The UK has recently signed trade agreements with several countries, including Japan and Australia, which could offer new opportunities for dairy exports. These agreements often include provisions for reducing tariffs and improving market access for British products. For example, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a major trade deal between 11 countries in the Asia-Pacific region that reduces tariffs and sets shared rules for labour, the environment, and intellectual property. The UK joined in 2023, helping it trade more outside of Europe after Brexit. This gives UK businesses better access to a large market, boosts investment, and strengthens the UK’s role in the Asia-Pacific. The membership is set to increase UK exports, ensure fair competition, and support economic growth through more international cooperation.
Navigating uncertainty
The initial optimism surrounding a UK-US trade deal has given way to a more complex reality. Political changes in the US, regulatory differences, and shifting priorities have all played a role in delaying a potential agreement. For UK dairy farmers, this means adapting to the current trade environment and seeking opportunities in alternative markets. By focusing on maintaining high standards, exploring new trade agreements, and advocating for supportive government policies, UK dairy farmers can navigate these uncertain times with resilience and hope. The future of UK-US trade may be uncertain, but with strategic planning and adaptability, the dairy industry can continue to thrive.