If and when Brexit finally happens Liam Fox will be able to conclude trade deals with other countries, including the USA. This is going to present our industries with a lot of challenges, some of which you can see in the 2018 National Trade Report on Foreign Trade Barriers (HERE) published by the Americans. The US has a lot of negotiating heft when it comes to trade but they complain loudly about their trading partners and what they claim are barriers to trade. The whole thing is 500 pages of which 48 pages are devoted to complaints about the EU, some of which go back years, many raised at the WTO but remain unresolved.
Several things are apparent. First of all, just how many countries the US is at loggerheads with over aspects of trade. I imagine smaller countries might be prepared to bend more than bigger ones and I think it shows just how hard it is to sign trade deals. But regardless of the deal we end up with these are the kind of issues the UK will have to resolve with the EU and with every other country with whom we trade. It is an object lesson in how international trade works.
Secondly, it shows how slow the WTO is in resolving inter government trading issues. The WTO proceeds mainly on consensus and doesn't really have a quick or efficient mechanism for dispute resolution. This may be an advantage if you are being complained about but not if you are the complainant.
Thirdly, it's clear how difficult it is even for the USA to argue against the EU. They have a lot of perhaps fair points especially about standards setting bodies that exclude non EU countries. I'm not sure what the EU is supposed to do. The Americans seem to want to influence the EU standards but I'm not sure they would welcome European countries being represented and having voting power on their own standards bodies. This is how the UK will be post Brexit, but with even less influence than the US. So much for mutual recognition of standards.
And finally, the US seem to rely a lot on basic international standards where they exist and unlike the EU, show no inclination to improve standards for evolving environmental or health reasons. Their own standards, once adopted become ossified whereas the EU is a sort of standards beaver, constantly revising and introducing new ones. The approaches are quite different.
Note these points (in italics) taken from the American document (page 155 onward):
On Customs administration:
Notwithstanding the existence of customs legislation that governs all Member States, the EU does not administer its laws through a single customs administration. Rather, there are separate agencies responsible for the administration of EU customs law in each of the 28 Member States. Institutions or procedures are not currently in place to ensure that EU rules and decisions on classification, valuation, origin, and customs procedures are applied uniformly throughout the Member States.
Whereas our trade with 27 countries is frictionless now with zero customs administration, we will soon have to deal with 27 separate customs agencies! I don't know if this is generally appreciated by UK exporters but it will add a lot of bureaucracy and paperwork where there was none before.
On Technical Standards:
The CEN or CENELEC technical committees that draft the European standards generally exclude non-EU nationals. In the limited instances where non-EU nationals do participate, they are not allowed to vote. Accordingly, when a U.S. producer uses an EN, it is typically using a standard that has been developed through a process in which it had no meaningful direct or representational opportunity to participate or provide technical input. This has a pronounced impact on small and medium sized enterprises and other companies that do not have a European presence. The opportunity for U.S. stakeholders to influence the technical content of EU legislation setting out essential requirements (i.e., technical regulations) is also limited.
This is precisely the position we will find ourselves in. The reference to CENELEC may not be accurate since CENELEC is not an EU body so I'm not sure we will lose our seat, but it will apply to many other bodies. We will have little or no influence over many regulations that, like it or not, our manufacturers will have to comply with if they export to the EU.
On Country of Origin Labelling (COOL):
Eight European Member States – Finland, France, Greece, Italy, Lithuania, Portugal, Romania, and Spain – are in the process of developing and implementing a variety of national COOL schemes that apply to different types of ingredients and finished products, have varying implementation times, and require different wording on labels. The information required on packaging varies according to each individual Member State and can include the country of birth, fattening, and slaughter of animals; country of milking, packaging, or processing for dairy products; and country of cultivation and processing for wheat.
Inside the EU gives us a privileged position. Anything made in the UK is either made to a harmonised EU standard - called an EN - or is mutually recognised. So, from our perspective it's a cohesive bloc. But recently the Commission has allowed EU members to develop their own Country of Origin Labeling (COOL) which is going to make life far more difficult and complex for UK manufacturers.
On Nutritional Labeling:
EU framework Regulation 1169/2011 on the provision of food information to consumers went into effect on December 13, 2014, except for the provision on mandatory nutrition labeling, which became effective December 13, 2016. The measure regulates the display of product information on product packaging and online stores ostensibly to provide consumers with information related to nutrition, ingredients, and allergens.
The United States has concerns that Regulation 1169/2011 appears to provide wide latitude for Member States to adopt non-uniform and potentially inconsistent implementing regulations. U.S. stakeholders are thus concerned about the burden of meeting multiple labeling requirements, particularly if those requirements cannot be met through stickering or supplemental labeling.
UK manufacturers will also presumably be subject to the same COOL requirements. So, up to now where a supplier had just one label to think about, even if exporting to all 27 member states, they may now face multiple labels depending on which and how many countries they export to. I don't see this in the press so it may not be understood widely but it is bound to have an impact and in many cases a big one.
On Geographical Indicators [Champagne, Parma Ham, etc]:
The United States has further argued that new certification and labeling quality schemes not be required for market access; however, where the EU implements such schemes, efforts should be made to acknowledge voluntary U.S. industry definitions. Similarly, U.S. processes and procedures should be acceptable for labeling requirements, and system and process comparability with industry definitions should be sought in order to minimize any negative market access impact for U.S. exports.
The US are quite happy to have quite loose voluntary US industry definitions, perhaps reflecting their attitude to environment impact and so on.
Distilled Spirits Ageing Requirements
The EU requires that for a product to be labeled “whiskey” (or “whisky”), it must be aged a minimum of three years. The EU considers this a quality requirement. U.S. whiskey products that are aged for a shorter period cannot be marketed as “whiskey” in the EU market or other markets that adopt EU standards, such as Israel and Russia. The United States has a long history of quality whiskey production, particularly by micro-distillers, which has not entailed minimum ageing requirements, and views a mandatory three-year ageing requirement for whiskey as unwarranted. Recent advances in barrel technology enable U.S. micro-distillers to reduce the ageing time for whiskey while producing a product commensurate in quality. In 2017, the United States continued to urge the EU and other trading partners to end whiskey aging requirements that are restricting U.S. exports of whiskey from being labeled as such.
Note that Russia and Israel have adopted EU Standards and this blocks some US exports or prevents the products being marketed as the manufacturer wants.
Animal Welfare
They don't seem to worry about animal welfare as much as we Europeans do. Chlorinated chicken is one of the manifestations. They don't bother about the conditions chickens are kept in and are happy to solve any health issues by dunking them in a chlorine wash at the end. Europeans prefer to have higher welfare standards.
The EU requires animal welfare statements on official sanitary certificates. The EU’s certification requirements do not appear to advance any food safety or animal health objectives and thus do not belong on sanitary certificates. The U.S. position is that official sanitary and phytosanitary certificates – the purpose of which is broadly limited to prevent harm to animal, plant, or human health and life from diseases, pests, or contaminants – should only include statements related to animal, plant, or human health, such as those recommended by Codex, World Animal Health Organization (OIE), and the International Plant Protection Convention, or have scientific justification.
Sanitary and Phytosanitary Barriers
The United States remains concerned about a number of measures the EU maintains ostensibly for the purposes of food safety and protecting human, animal, or plant life or health. Specifically, the United States is concerned that these measures unnecessarily restrict trade without furthering their safety objectives because they are not based on scientific principles, maintained with sufficient scientific evidence, or applied only to the extent necessary. Moreover, the United States believes there are instances where the EU should recognize current U.S. food safety measures as equivalent to those maintained by the EU because they achieve the same level of protection. If the EU recognized the equivalence of U.S. measures, trade could be facilitated considerably.
We have been sheltered from these issues for 44 years and I think many Brexiteers are under the illusion we will be treated by prospective trade partners as if we are the EU. Our diminished size and market will seriously weaken our negotiating hand but this has not yet been recognised.
