US Trade Deal Would Boost Welsh Economy

Last December’s general election saw fourteen Conservative MPs elected in Wales. The crumbling of the red wall demonstrated that at our heart, we are a country that embraces enterprise, opportunity and hard work.

Despite the challenges that the Covid-19 pandemic has shown us, we are a country that pulls together in times of need. It is this spirit that will allow us to make the best of the opportunities open to us in the coming months and years.

A key opportunity will be increasing trade with partners around the world. That is why the Government has formally commenced negotiations with the US. This is a major effort for both parties, with both sides deploying over a hundred negotiators - via video-conference at first and when safe to do so, face to face.

Trade is not a threat.  It is a great opportunity that has served more to fight global poverty than most aid schemes.  Increased trade with diverse partners provides us with stronger supply chains and opportunities for Welsh businesses to access new markets. This will result in higher wages and more jobs across the country. 

In signing trade deals with like-minded allies, businesses will be able to increase exports (already making up 31% of GDP) all the while lowering costs for consumers and producers alike. Already 950 business in Wales trade with the US and the port of Pembroke handles the largest value of goods traded between the US and UK from Wales – trading £3bn with the US in 2018 alone. 

The evidence is clear that companies that export are more productive, leading to higher wages.  Wales exports over £4.6k of goods to the US, every minute. A deal with the US could boost the local economy significantly. As we emerge from the current crisis, let’s ensure we have taken every opportunity to the give economy a lift and keep more of our hard-earned money.

As part of a trade deal, the UK will be able to sign up to advanced data and digital chapters, enabling greater information sharing and access to US markets. With Wales already exporting £122m of scientific equipment, reducing the barrier to trade in innovative sectors and making agreements on data flows could widen opportunities for our pioneering companies. 

Wales is proud of its significant automotive sector and in 2018 exported £4.8bn in vehicles and transport equipment across the globe. Yet, only £92m of these exports went to the US.  Aston Martin in St Athan provides an excellent opportunity to grow this further if we can reduce or eliminate the tariffs. 

A free trade deal is a great opportunity for Welsh farmers, who already export £100m of meat. With US beef already 6% more expensive than EU beef there is a market for our high-quality product.  The US is also the World’s second largest importer of lamb.  None is currently sold to the US.  Liz Truss and I raised this with Vice President Mike Pence during his visit last year.  These are only some of the opportunities that a deal could offer the Welsh economy.

Our world class negotiators will not only focus on key sectors, they will also be looking out for those small business that have been severely affected by Covid-19. Our deal will include a dedicated SME chapter that will cut red tape and remove unnecessary regulations for the UK’s 5.9 million small businesses.

The Government has been clear that our negotiators are to purse the UK’s economic interests, for all parts of the nation and to be robust in doing so. That means that the NHS, the price it pays for drugs and its services are not on the table and there will be no compromise on high environmental protection, animal welfare or food standards. 

We are an innovative and hardworking nation. One that will pull together and make the best of any opportunity. So now is the time to harness the indomitable spirit shown in recent weeks and strike ambitious trade deals across the world.  A US deal offers us the most exciting and newest of opportunities. 

 

Rt Hon Alun Cairns MP

Member of Parliament for the Vale of Glamorgan and Vice Chairman of the All Party Parliamentary Group for International Trade