Britain will strike a “hard bargain” with the US in looming trade negotiations and will not put NHS drugs pricing on the table, Liz Truss, international trade secretary, said on Thursday as she mapped out a post-Brexit commercial policy.
Ms Truss said Britain now had “an opportunity to re-emerge after decades of hibernation as a campaigner for free trade”, suggesting Britain’s EU membership had stifled the country’s ability to promote open markets.
But she gave the most explicit statement yet that the NHS, its drugs pricing policy and the services it provided would “not be on the table” — a position which will be an impediment to any deal with Washington.
Under any trade deal with the US, Washington could demand full UK market access for pharmaceutical products and medical devices, requiring changes to NHS pricing restrictions and potentially increasing the cost of drugs.
Ms Truss was giving a brief written statement on the government’s priorities in a trade negotiation with the US, which Donald Trump hopes to conclude by the summer — ahead of the presidential election in the autumn.
Liam Fox, Ms Truss’s predecessor, has argued that Britain should not rush into a deal and that it should take the time to negotiate a full agreement increasing export opportunities in the services sector.
Ms Truss said Britain would seek “far reaching and mutual beneficial tariff reductions (taking into account sensitive UK products)” and would seek to boost exports in services in areas such as finance, telecoms, transport and business services.
She added: “A free trade agreement with the US will encourage the mutual recognition of UK and US professional qualifications, by strengthening regulatory co-operation.”
The Treasury calculated in 2018 that even an ambitious trade deal with the US would boost British GDP by only 0.2 per cent, far removed from Mr Trump’s claim that an agreement could “quadruple” trade flows.
The prospect of an ambitious deal will be constrained by Conservative manifesto pledges to ringfence the NHS in any trade deal; Ms Truss also confirmed that Britain would not water down its animal welfare and food standards.
That could make it harder for US farmers to gain access to the UK market; there is strong political opposition in Britain to American intensive farming methods, including genetically modified crops and hormone treated beef.
Barry Gardiner, Labour’s trade spokesman, said he feared that such products could yet be allowed into the UK market if the government applied “equivalence” standards, which concluded that US food products were safe.
“The government is playing a three-card trick on the British public,” he said. “They say they will maintain food and animal husbandry standards in this country but this could end up undercutting our domestic producers.”
Mr Gardiner said he did not dispute that US chicken — for example — was safe to eat, but that poultry in America was dipped in a chlorine bath because it was produced in intensive conditions unacceptable in the UK.
It would also be cheaper than British-produced chicken and could drive poultry reared to higher standards out of the market.
Meanwhile Ms Truss launched a four-week consultation on a “new global tariff policy” that Britain would apply from January 2021, when the Brexit transition period ends, to those countries where the UK did not have a free trade agreement.
The new “most favoured nation” tariff schedule states that the UK under World Trade Organization rules would simplify tariffs by removing import taxes of less than 2.5 per cent and tariffs on “key inputs to production”. The DIT document adds that tariffs would also be scrapped where there is zero or limited domestic production of the products being imported, to lower prices for consumers.
Britain would trade with the EU [and other countries under these WTO rules if no free trade agreement is in place along with other countries where there is no FTA. Cars and agricultural products are among those likely to attract the highest tariffs under the new regime.
Dominic Raab, foreign secretary, is in Australia attempting to pave the way for a trade deal, while the UK is also looking to strike deals with Japan and New Zealand.
Source: Economy - ft.com
