US-UK Trade Deal: Northern Ireland

Monday 12th May 2025 Commons Chamber

16:11

[Jim Allister (North Antrim) (TUV)]

(Urgent Question): To ask the Secretary of State for Business and Trade if he will make a statement on the US-UK trade deal, with particular reference to the impact on Northern Ireland.

[The Secretary of State for Business and Trade (Jonathan Reynolds)]

With your permission, Mr Speaker, I am grateful to be able to give a statement today, following that given by my right hon. Friend the Minister for Trade Policy and Economic Security on Thursday, to update the House on the agreement we have reached with the United States and specifically to address the important circumstances of Northern Ireland.

I can confirm that we have closely considered the impacts of this agreement on Northern Ireland. I have personally spoken to the First Minister and Deputy First Minister twice while negotiating this deal, the first time alongside the Prime Minister. I want all Northern Ireland colleagues to know that the importance of Northern Ireland in this deal, and all trade deals, is paramount to me personally, and I commit absolutely to working with any colleague from Northern Ireland on the implementation of agreements of this sort.

First, as Northern Ireland is part of the UK’s customs territory and internal market, Northern Ireland exporters can access the US market under this deal on the same preferential basis as the rest of the UK. Secondly, this deal does not affect how imports to Northern Ireland operate. US origin goods will be able to benefit from this deal where they are not at risk of entering the EU. As a result of the Windsor framework, Northern Ireland businesses importing eligible US goods under this deal can avoid any unnecessary duties with established schemes such as the UK internal market scheme. Thirdly, there is a comprehensive tariff reimbursement scheme. The difference between the UK and EU duty can be claimed back, so long as it can be demonstrated that the goods did not enter the EU single market. The customs duty waiver scheme also allows at-risk duties to be waived entirely regardless of the destination, subject to an overall limit. As we have said all along, we have continued to act in the best interests of all UK businesses, which very much include those in Northern Ireland.

More broadly, I can confirm that this agreement saves thousands of jobs, gives the UK an advantage over other countries in relation to trade with the US, and confirms a process of potentially securing a much wider trade agreement between our two countries. The UK-US trading relationship, which is already worth £315 billion, is important and growing. We have £1.2 trillion invested in each other’s economies, employing around 2.5 million people across both our countries. That is why this deal was so important. Throughout our negotiations, businesses have consistently praised our calm-headed, pragmatic approach to working with President Trump’s Administration and I thank them for their engagement, their support and their advocacy.

Turning to the detail of the agreement, in no industry was the potential impact of tariffs more acute than in our automotive sector. We have therefore negotiated a quota of 100,000 vehicles where tariffs will be reduced from 27.5% to 10%—

[Mr Speaker]

Order. I gently say that answers to urgent questions are only meant to last for three minutes. I can see that you have quite a few more pages; I am happy to take them because I think it is important that the House knows about the deal, but we need to understand what we have granted and what we have not granted. I do not want to go back over the events of Thursday, when nobody seemed to understand the procedure of the House, and I recognise how important this issue is to hon. Members but, seriously, we should know the rules and I just wonder how this has gone wrong again.

[Jonathan Reynolds]

Mr Speaker, I am incredibly grateful for your forbearance. If it is okay, I will continue to these words, given how important I know the matter is to all Members of the House.

[Mr Speaker]

Order. If it is so very important, why was it not presented to the House as a statement or converted? That is what I would say. I never quite understand—the other day, we could not convert them quickly enough, but today we do not want to.

[Jonathan Reynolds]

Mr Speaker, I would have been more than happy to make it a statement, and I was hoping to be able to do so.

We have negotiated a quota of 100,000 vehicles where tariffs will be reduced from 27.5% to 10%, and secured an agreement for associated car parts, recognising the vital role that this sector plays in our economy.

For steel and aluminium, this deal will remove the 25% additional tariffs that were put in place earlier this year, reducing US tariffs on core steel products to zero. This will provide a critical lift for the steel industry, which has been brought back from the brink of collapse, allowing UK steelmakers to continue exporting to the US. This follows our intervention last month to take control of British Steel and save thousands of jobs in Scunthorpe.

For pharmaceuticals and life sciences, this deal provides assurances that we will receive significantly preferential access in case of any new US tariffs, something that, so far, only the UK has secured. As the pharmaceutical manufacturing sector contributes £20 billion to the UK economy a year and employs around 50,000 people, this was a priority for us.

On aerospace, we agreed that UK aerospace exports, such as Rolls-Royce engines and plane parts, will have a specific guarantee of zero tariffs as a result of this deal. This will be a huge boost to the sector, which supports 450,000 jobs in the UK.

To secure this deal, we have made agreements with the US on beef, ethanol and economic security. On beef, we have agreed a new quota of 13,000 metric tonnes, and have reduced the UK tariff on existing US imports coming through a World Trade Organisation quota limited to 1,000 metric tonnes. Crucially, I can confirm this will comply with sanitary and phytosanitary standards, in accordance with the commitments that we have always made.

The increase in the quota of 13,000 tonnes compares with the 110,000 tonnes in the Australia deal negotiated by the last Conservative Government. Even more importantly, the deal is reciprocal, meaning our UK beef farmers will have unprecedented market access to the US. Our farmers will be able to export their high-quality beef through an exclusive UK quota to a market of over 300 million people, providing unparalleled access to the world’s largest consumer market.

On ethanol, we already import a significant amount of ethanol from the US and have agreed a duty-free quota capped at 1.4 billion litres. We are working closely with our domestic sector to understand its concerns and any potential impacts to businesses, including what more Government can do to support the sector.

Finally, the UK and US will strengthen our co-operation on economic security and work together to combat duty evasion. We will continue to use investment screening measures already in place, and we will work together to protect our existing supply chains from any third-country investment that concerns either one of us. This Government will take a consistent, long-term and pragmatic approach to managing the UK’s relationships with third countries, rooted in our UK and global interests.

As we have made clear, the aspiration on both sides is that this is just the beginning, with the US agreeing to deepen transatlantic trade and investment further, and to progress discussions towards a transformative UK-US technology partnership. This deal has seen jobs saved and jobs won, but it is by no means job done. The siren voices of the extremes can claim to be the voice of working people all they want, but we know that on matters of action on wages, security and opportunity, it is this Government who will make the difference.

The deal comes on the back of our India trade deal earlier last week and on the promises that many Governments have made to secure trade agreements with the US. Although many people have talked about those deals, it is this Government that have got them across the line for every bit of the UK, including Northern Ireland.

[Jim Allister]

For all his verbosity, the Secretary of State came nowhere close to addressing the issues that arise from the fact that this Government and this House do not control the trade laws of a part of this United Kingdom—namely, Northern Ireland. Under the Windsor framework, Northern Ireland was placed under the EU’s customs code, so it is therefore its tariffs, not the UK’s tariffs, that govern the imports to Northern Ireland. With the EU having no trade deal with the US or India, the resulting tariffs on imports under this deal will be higher when the goods come to Northern Ireland than when they come to GB. For manufacturing and consumers, that creates huge disadvantage and fundamentally contradicts the equal citizenship that is supposed to denote a United Kingdom.

The Secretary of State referred to the convoluted and tardy system of possible recoupment of tariffs, but the onus there is on those applying to prove that anything they produce will never go into the EU. It is no answer to Northern Ireland’s subjection to foreign trade laws, which we do not make and cannot change. The Secretary of State would not contemplate that for his own constituents, but he expects us to sup it up in Northern Ireland.

I will ask the Secretary of State about three specific issues. Under the deal, will it not be easier for US manufacturers to buy tariff-free steel from Great Britain than for manufacturers in Northern Ireland to buy the same steel from their own country to bring it into their own country? That steel will be subject to EU tariffs. How can that ever be compatible with Northern Ireland supposedly being part of the EU’s internal market? In terms of beef and the tariff-free trade within the quota that has been set, how can—

[Mr Speaker]

Order. I am sure that the hon. and learned Member must be coming to an end. Just because the Secretary of State has taken advantage of the Chamber, I certainly do not expect every other Member to do so—Front Benchers, yes, but the hon. and learned Member will know that he is limited to two minutes.

[Jim Allister]

Where there is a set quota for imports of beef, how can Northern Ireland participate in that if the UK cannot offer a reduced tariff rate in Northern Ireland? Does that mean that our beef-exporting farmers in Northern Ireland will be excluded? Surely all these trade deals expose the folly of surrendering part of our territory to foreign customs control.

[Jonathan Reynolds]

I am grateful to the hon. and learned Member for bringing this urgent question and for putting his community’s concerns on the record; I understand how strongly he will feel about them. There is much that I could say and criticise about the previous Conservative Government’s approach to a lot of things, but the approach that they took with the Windsor agreement to balance the obvious, practical problems and realities of Brexit—of leaving the single market when Ireland is in the EU and the customs union—alongside our commitments under the Good Friday agreement to observe what we have all signed up to and want to support is fundamentally better than when they threatened to break all kinds of international laws and agreements with key partners. It was the better way to find a way through them.

I absolutely accept and understand that this issue is difficult and complicated, but I can tell the hon. and learned Member that that is not just the perspective of the UK Government, in terms of working with our colleagues and ensuring that these issues are reflected in the agreements, but what we hear from the other side in these agreements. When we explain what we need to see happen around agreements such as this, we see that the US is absolutely committed to peace, to the Good Friday agreement and to the sound working of the Windsor agreement.

The hon. and learned Member has raised a number of specific questions, and I will ensure that we deal with them. We will meet with him and a delegation of MPs and ensure that we are in correspondence with him, as we have promised to be with the First Minister and Deputy First Minister. This approach is complicated, but it is far better than the one we briefly glimpsed in that difficult period when the Conservative Government did not have the Windsor agreement in place. Fundamentally, there is a difference between goods entering Northern Ireland and therefore entering the UK and goods entering Northern Ireland if there is a risk of them entering the single market more widely. This is a sound system to deal with that, and I accept that we must make it work.

This is not our system, but we recognise what the previous Government were trying to do. Whether the hon. and learned Member wants it or not, I offer him an absolute, unequivocal agreement that we will work with him on any concerns he or his community have to ensure that we get this right to the maximum degree possible.

[Rosie Wrighting (Kettering) (Lab)]

Can the Minister update the House on the Government’s engagement with the chemicals industry?

[Jonathan Reynolds]

Absolutely. Whenever any trade agreement of any sort is agreed, there will obviously be domestic impacts if our trading partners have requested further access to the UK market. That is particularly the case for the agreement on bioethanol. Senior officials from my Department have been meeting representatives of the domestic industry, and I have a personal meeting set up—on Wednesday of this week, I believe. A lot of the issues we need to address are wider than what has been agreed through this trade agreement, but our commitment to working with the domestic industry to help manage any trade-based transitions is absolute.

[Mr Speaker]

I call the shadow Minister.

[Greg Smith (Mid Buckinghamshire) (Con)]

I congratulate the hon. and learned Member for North Antrim (Jim Allister) on securing this urgent question, although I agree that the Government really should have offered a statement to the House on this important subject.

Of course, the House has still not yet seen the full detail of the trade agreement with the United States of America. The Secretary of State says that this is just the beginning, but there are still a great many unanswered questions about what we have so far, including what are clearly ongoing negotiations on pharmaceuticals. In his answer, the Secretary of State said that the UK will have significantly preferential rates, but what does that mean in practice? Where is the detail about what “significantly preferential rates” actually means? There are similar questions about the digital services tax.

Last week, the shadow Secretary of State for Business and Trade, my hon. Friend the Member for Arundel and South Downs (Andrew Griffith), asked the Trade Minister a straight question: whether this trade agreement would

“protect the special status of Northern Ireland”.—[Official Report, 8 May 2025; Vol. 766, c. 899.]

The Minister was unable to provide an answer at the time, and I remain unconvinced by what the Secretary of State has had to say today—there is still a lot of talk about the risks of goods entering the European Union. Clearly, this is a far more complex situation than the Secretary of State would like us to accept. As the hon. and learned Member for North Antrim made clear, the EU is still hugely influential in Northern Ireland trade law. The points he made about steel, for example, were accurate and deserve clear answers.

It is clear that this deal will have a number of implications for the functioning of the dual customs regime, yet businesses in Northern Ireland have been left in the dark for too long by the lack of detail in last week’s announcement. I would therefore be grateful if the Secretary of State would confirm what discussions he has had with his US and EU counterparts about rules of origin and the green lane in Northern Ireland. What specific measures are the Government implementing to ensure that Northern Ireland businesses are not disproportionately burdened by increased costs and administrative complexities as a result of this trade agreement? Finally, given that the Prime Minister is gearing up for his surrender summit with the European Union next week, can the Secretary of State confirm that there will be no backsliding on Northern Ireland’s place as an integral, absolute and total part of our United Kingdom?

[Jonathan Reynolds]

That was a fairly odd stream of consciousness, if I am being totally honest. It appears that I have given a stronger defence of the Windsor agreement negotiated by the former Conservative Government than the Conservative party has managed today.

The shadow Minister has asked for detail. I acknowledge that, particularly when dealing with the US and the style of the US system, negotiations have a pace—a pulse—and they are perhaps different from how we would present the detail of a complete trade agreement, such as the one we agreed with India. However, I think he would acknowledge the importance of last week’s announcements, because such a significant part of our exports to the US is covered by its sectoral tariffs, not the reciprocal ones. Businesses would have had to start planning this week for a world of—in some cases—25% tariffs, which would have had major repercussions for jobs, businesses and growth in the UK. Being able to give those businesses reassurance, alongside a clear indication of the ongoing nature of the negotiations, is a significant win for British business. I hope the Opposition recognise that.

The hon. Gentleman asked specifically about preferential rates on pharmaceutical products. Those in the United States have not yet completed their own investigations in respect of some of the sectoral tariffs to which they have alluded, and have not announced what they are putting in place. The nature of the agreement, given that it covers the sectoral tariffs, is to recognise that we would want the UK to be in a preferential position on those as well, rather than agreeing what we have already agreed on sectoral tariffs and then seeing further sectoral tariffs announced in future.

The hon. Gentleman asked about the digital services tax. It is not in the agreement; it is not a part of what was announced last week.

As for the question of the special status of Northern Ireland, this is the agreement that the Conservative party struck. It manages two very difficult countervailing pressures. The Conservatives might have thought more about this during the Brexit process, but they did not. They had to resolve the issue after the agreement, and to be honest, I do not think they did a particularly bad job in reaching the compromise that Windsor represents.

Exports from Northern Ireland are covered by the preferential trade terms that we have secured with the United States. When goods come into Northern Ireland, there is a differential depending on whether they are staying in the United Kingdom or there is a risk of their entering the EU’s single market. That is what the Conservative party agreed. I think that the new degree of complexity comes from differentials between the EU’s approach to trade and trade defence, and our own, but surely we all recognise that part of what we are talking about here reflects the fact that we are not in the European Union. The hon. Gentleman again engaged in some language about the European Union.

This country did a trade deal with India last week, one that the Conservative party promised many times but never delivered. We reached an agreement with the United States in the same week. We have the EU summit coming up. Everything that we have said about how this country does not have to pick just one trading partner—it can be the best connected market in the world—is borne out by the agreements that we have signed. Every Member of this House should get behind a UK that is strong on the world stage and connected to each and every one of the major economic markets that we need to be our partners.

[Joe Morris (Hexham) (Lab)]

I congratulate the Secretary of State first on being papped in the away end on Friday night, and secondly on, twice in one week, upholding our world-leading environmental and welfare standards. Can he assure me that as these conversations—and, indeed, conversations with future trading partners—develop, further deals will always prioritise high food standards to protect both our farmers and our consumers?

[Jonathan Reynolds]

Last week was a good week all told, on footballing and trade matters. You may be noting, Mr Speaker, that my voice is a little hoarse as a result.

We on the Government Benches were elected on our manifesto commitment not to alter our sanitary and phytosanitary regime and our food standards. Some people said that a deal with the United States would not be possible if we stuck to that, but we did, and we have an agreement. That proves everything we said about why that issue is so important to us.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Clive Jones (Wokingham) (LD)]

Please bear with me, Mr Speaker, because I think that I too am losing my voice.

Parliament must be given a vote on the United States trade deal and all future trade deals, which must be properly scrutinised by Parliament. Let me remind the Secretary of State that Labour party policy was to have a vote in Parliament on trade deals. What a massive U-turn has taken place over the past few months. Trump’s trade war threatens jobs across the United Kingdom and especially in Northern Ireland, where there is heightened uncertainty because of the Tories’ botched Brexit deal. What is the Secretary of State’s assessment of the impacts of Trump’s trade war on our small businesses and our living standards, and what will he do to address those impacts?

In Wokingham, where I live, Shinfield Studios employs hundreds locally. We are the Hollywood of the UK. What steps are the Government taking to protect the UK film industry from potential tariffs, and thus to protect jobs in Wokingham and in other parts of the UK, including Northern Ireland?

[Jonathan Reynolds]

We have discussed this issue across the Chamber on several occasions. We as a Government are not proposing any changes in how the UK and Parliament ratify treaties. I have never given the promises that the hon. Gentleman has mentioned; I have not changed my position. The position is as it always has been—that Parliament has a key role in scrutinising treaties, and any changes that require legislation or alterations in our domestic laws go through Parliament in the usual way.

I think the hon. Gentleman will recognise that this week there could have been announcements of job losses and restructuring that would have been very difficult for a range of important sectors in our economy, and I do not think any Member of Parliament would have wanted to see that happen because of a parliamentary process. I understand that the Liberal Democrats want us to rejoin the customs union, and that therefore trade deals with the United States or India would not be possible. That is consistent and fair, but it would have been very painful if that had been the UK Government’s position going into negotiations.

The hon. Gentleman asks about the impact of any potential issues in the global trading system on small businesses and the wider economy. They are significant for our bilateral relationship, but he will also know that the UK is very exposed to wider relationships because we are an outward-facing economy. That is why we have to be on the pitch with our sleeves rolled up, trying to find solutions for ourselves that other countries can follow.

The hon. Gentleman asks a very pertinent question about the film industry. Again, for any area where there has been the suggestion of sectoral tariffs but they are not yet in place—to be honest, it is not entirely clear what would be the subject of a tariff in the case of a film—we have language in the agreement that reflects that. We would cite that as an existing area where there is a really strong and mutually beneficial bilateral trading relationship between ourselves and the United States.

[Chris McDonald (Stockton North) (Lab)]

I welcome this trade deal, and particularly the beneficial impact it will have on the steel and automotive sectors. I was pleased to hear the Secretary of State mention his discussions on ethanol, where I know some concerns have been raised. I have spoken to industry representatives, and they are confident that they have a solution that will work well for the Government’s trade deal. Notwithstanding his meeting with Ensus on Wednesday, will my right hon. Friend meet me and senior representatives of the UK’s two bioethanol producers to discuss how they can make the Government’s trade deal with the US a major success?

[Jonathan Reynolds]

I am grateful to my hon. Friend for his question, and for his industrial expertise. I promise to have that meeting. Whenever trade arrangements have an impact on domestic industry, it is important that we work as a partner to industry in order to address that. He is right to say there are two substantial bioethanol plants in the United Kingdom that might be affected, and we are already setting up a process to work with them, as he has requested.

[Sir Julian Smith (Skipton and Ripon) (Con)]

This deal, as with the India deal, is good for the UK. It is particularly good for Northern Ireland, which in turn can also access the single market. However, the urgent question has some merit, because the reimbursement scheme is quite onerous, and I urge the Secretary of State and his team to look into where efficiencies could lie. Will he clarify how his Department can help Northern Ireland businesses to expand in the US and take advantage of this deal?

[Jonathan Reynolds]

First of all, I am extremely grateful to the right hon. Gentleman for pointing out that, across this House, there should be unanimous agreement that trade agreements with the United States and India are in everyone’s interests. I have been a bit dismayed by some of the feedback from those on the Conservatives Benches—not Back Benchers, but Front Benchers—because we should all recognise that such deals are important not only for our bilateral trading relationships with those key markets and for the potential growth that comes from that, but because they send a message to the rest of the world about free, fair and open trade at a time when that message is very much needed.

Feedback on the performance of the duty reimbursement scheme has been significant and we are working with partners in Northern Ireland, and with the Treasury, to see how we can improve the scheme. I think people recognise the fundamentals of the scheme and what it is trying to do, but there are complaints about how easy it is to access. I recognise that and commit to working on it.

We have a whole range of export programmes, as the right hon. Gentleman might be aware, but how exciting it will be to have businesses from Northern Ireland and every part of the UK take advantage of some of the new, liberalised trading relationships that we have in place. They are not only preferential to what we have had in the past, but preferential to what other countries have. For instance, the deal with India offers access to Indian Government procurement that no other country in the world has. I am excited by that, and I hope other colleagues are too.

[Chris Vince (Harlow) (Lab/Co-op)]

I thank the Minister for his vital work on this trade deal—I am feeling more and more like Jim Shannon all the time.

[Madam Deputy Speaker (Caroline Nokes)]

Order. The hon. Member means “the hon. Member for Strangford”.

[Chris Vince]

Apologies. I am feeling more and more like the hon. Member for Strangford (Jim Shannon) all the time.

Can the Minister give the House some additional detail on how this trade deal and others will protect jobs in both Northern Ireland and Harlow? Does he agree that these trade deals mean that we avoid a trade war, which is good for everybody?

[Jonathan Reynolds]

I thoroughly endorse that. There are some significant headline wins from these trade agreements. Obviously, we are focused in the main on headline reductions in tariffs—whether that is whisky going from 150% to 40% under the India deal, or the removal of sectoral tariffs through the US deal—but there are other things. I have mentioned procurement from the Indian Government, but what really interests me is how we can remove frictions for smaller businesses and how we could have greater access to the US market. Trade—liberalised trade and free trade—is one of the absolute certainties for growth, for jobs and for investment. That is why I want all colleagues to be behind these deals. At times in the UK’s history, there has been a genuine cross-party consensus on the benefits that trade can bring, and I want to see every colleague on either side of the Chamber get out there and sell the benefits to businesses in their own communities.

[Stephen Gethins (Arbroath and Broughty Ferry) (SNP)]

This trade deal with the United States does not even touch the sides of the trade deal promised by Brexiteers. Neither does it touch the sides of the damage done by our being ripped out of the customs union and the single market. I have heard the Minister talk about the challenges, but there was a compromise that Labour used to back, or certain Labour Members would back, of remaining part of the single market and the customs union. What is it about a Reform and Tory Brexit that he embraces so well?

[Jonathan Reynolds]

That has never been our position. It was never the position in our manifesto and it was never our position after the introduction of Brexit. The hon. Gentleman talked about the promises that Brexiteers made. I am not accountable for those and never have been, and frankly I am relieved about that. I would simply ask him whether an economy of our size—a G7 economy—can contract out trade policy to a customs union when we are not part of the political arrangements sitting behind that. I just do not see that as realistic.

I hear the hon. Gentleman not get behind, for instance, the reduction in the Indian tariff on Scotch whisky from 150% to 40%, but he should promote his own interests a bit more strongly. Regardless of how Members voted in the referendum on the European Union, they should get behind the benefits for every part of the United Kingdom, whether in the deal with India or that with the US. It will not be the same as being part of the single market—that political decision was taken in the referendum—but despite that we can build the best possible position for every bit of the United Kingdom. I think we should look to the future, rather than relive the battles of the past.

I know this will not mean much to the SNP, but the political uncertainty after the referendum while we did not have the new arrangements in place really did cause harm to the UK. It was in itself a detriment, and that is exactly why the continued obsession about the constitutional position of Scotland is not in the interests of Scottish businesses. We are looking to the future, and agreeing deals that benefit every part of the UK, and if the hon. Gentleman cannot get behind that, so what? We will defend Scotland’s interests, and make sure it is getting better access to every market in every bit of the world.

[David Mundell (Dumfriesshire, Clydesdale and Tweeddale) (Con)]

Although it pains me, as it does, to do so, I have to concede that whiskey is produced in Northern Ireland. When the Minister for Trade Policy and Economic Security made the statement on the Indian trade deal, he understandably placed great emphasis on the benefits to the Scotch whisky industry and indeed the UK whisky industry from that deal, but when he made the statement on the US deal, he said precisely nothing about whisky. Can the Secretary of State clarify exactly what is the current position on whisky with the US, and what is his aspiration?

[Jonathan Reynolds]

First, while we would all recognise the superiority of the quality of Scotch whisky, the deal with India also covers exports of gin. I was at the Beefeater factory, not far from here, last week. The deal also covers Northern Irish whiskey; Bushmills is part of this deal, too.

The right hon. Member’s question on the US is about the reciprocal tariffs put in place; obviously, no sectoral tariffs have been put in place on anything affecting whisky production. That conversation is part of the wider ongoing discussion about the reciprocal tariff, or the 10% as it is sometimes referred to. I believe there is no need for that and that it can come down, but there will have to be movement on the US side for that.

I think we could reach agreement on a whole range of tariff lines and product areas that would further deepen the trading relationship between ourselves and the US, and that is why we are committed to continuing this conversation. Of course, the UK is not a high-tariff country—as it is, what tariffs we have in place are relatively modest—and we therefore have to make sure that what we agree is in the interests of both countries. However, that will be part of the ongoing conversation, which includes the digital agreement we are seeking to strike and a whole range of other areas of interest to Members across the Chamber.

[Sammy Wilson (East Antrim) (DUP)]

The Secretary of State spent about five minutes of his response evading the question that was asked: what will the impact of this trade deal be on Northern Ireland? The fact of the matter is—and he has already said it—that this will be difficult and complicated, and we have to remember that the EU has a single market to protect. It seems he is more interested in protecting the EU from the dribble of goods that goes into the EU than protecting the internal market of the United Kingdom. The fact of the matter is this. The Secretary of State may say, “Well, provided that businesses can prove that parts and other things do not go into the EU, they can then get the taxes back.” But the process for doing that is so complicated, so convoluted and so time-consuming that very often businesses are without the money for a long, long time, with all the cash-flow problems. Then the Treasury spends an age getting the taxes—

[Madam Deputy Speaker (Caroline Nokes)]

Order. We do need to have a question.

[Jonathan Reynolds]

I understand that the right hon. Gentleman feels strongly about this, but I say again to him that any difficulty or complexity is not caused by this trade agreement per se. There is an arrangement in place—one that the Government support and one that, I believe, those on all sides of the House adhere to—that manages the particular situation that Northern Ireland was put in as a result of Brexit. That is the reality.

Where we have a lot of tension in the global trading system and differentials between ourselves and the EU—there are going to be differentials at times—it is incumbent on us all to manage them and ensure that Northern Irish businesses and consumers are getting the benefits of the trade agreements we are seeking, and that where there is that relationship to the wider European Union, we operate all those schemes in a way that is to their maximum utilisation and efficiency. I recognise that there are complaints about the duty reimbursement scheme, and we have worked with colleagues on that, but it is not these trade deals that caused that complexity; it was the particular situation that the previous Government needed to find a solution to—and, to be fair to them, they did find a solution. We, on all sides, are committed to honouring and making sure it is working.

[Dr Andrew Murrison (South West Wiltshire) (Con)]

As skilfully drafted as the Windsor framework certainly was, it could not possibly have fully anticipated President Trump and his tariffs, or the prospect of an EU-US trade and tariff war. Does the Secretary of State understand how concerned small and medium-sized businesses in Northern Ireland are? Suddenly, they are placed, potentially, at the epicentre of that trade war. It is all very well to say that they can claim back the differential in tariffs, but the bureaucracy involved in such an exercise, as the Secretary of State will understand, is substantial and significant. What will he now do to mitigate it?

[Jonathan Reynolds]

I understand the reasonable point the right hon. Gentleman is making—that perhaps large parts of the global trading system did not anticipate the position we find ourselves in today—but I believe it was drafted recognising that there would likely be divergence in trade policy between the United Kingdom and the European Union, and that is what we are seeking to manage. He mentions—I understand this, because it is the feedback we receive in the Department as well—things like the complexity and the functioning of the duty reimbursement scheme, and how it needs to work better. I hear that from businesses in Northern Ireland and I am hearing it very clearly in the Chamber today. Obviously, that relates to His Majesty’s Revenue and Customs and a Treasury responsibility, but I give him an absolute assurance that we are listening and we are committed to doing this. But it is incumbent on all of us to make it work.

[Robin Swann (South Antrim) (UUP)]

I thank the Secretary of State for his extended answers. In his original answer, he said that he had spoken with the First Minister and the Deputy First Minister twice. Were they supportive of the Government’s approach? Did they raise any concerns? How were those concerns mitigated? Did they agree to the final deal? With regard to the EU re-set negotiations of 19 May, are the Government engaging with the Northern Ireland Executive parties?

[Jonathan Reynolds]

I regularly meet all colleagues across the United Kingdom to keep them updated on matters of trade. Those were specific meetings in relation to what was being negotiated with the US. The final decision on any trade agreement is with myself and the Prime Minister. We do not seek formal agreement per se from colleagues in the devolved Governments, but we keep them informed as to what we are negotiating, the kinds of issues coming up on the other side and how we deal with that. It is not for me to reveal the content of those conversations, but the kind of reasonable concerns being aired in the Chamber today, about how things like the reimbursement system works and the feedback from Northern Ireland businesses, were of course a part of that conversation. We committed again, as I have done here at the Dispatch Box, to work with them on effective solutions to those problems.

[Caroline Voaden (South Devon) (LD)]

The Secretary of State says that free trade is essential for growth. What a shame that the trade across the UK is still so badly affected by us not being part of the customs union. When Labour was in opposition, he called for

“a proper role for Parliament in how trade deals are ratified”,

and argued that there needed to be

“a much higher level of scrutiny than we are seeing now”

under the previous Government. There are clearly many questions about how the deal will affect businesses in Northern Ireland. We have seen how the Australia trade deal has been allowed to undermine British farmers across the UK, animal welfare and food standards, thanks to a lack of parliamentary scrutiny under the Conservatives. Farmers in my constituency are worried that American agribusiness will undercut them with inferior meat. I hear what the Minister said about upholding SPS—

[Madam Deputy Speaker (Caroline Nokes)]

Order. Can the hon. Lady get to the question, please?

[Caroline Voaden]

Will the Minister provide reassurance that Members of this House will be given the opportunity to fully scrutinise and vote on the new trade deal with the United States?

[Jonathan Reynolds]

The hon. Member will have heard my earlier answers. I believe that Parliament should play a role in scrutinising trade legislation, and indeed any international agreement, but it is not the case in the United Kingdom that we have formal “up or down” votes on any treaty. We vote on the implementation of those agreements, and the responsibility for negotiating and agreeing those is with the Government, rather than Parliament. I am not aware of any substantive proposal to change that system. It is certainly not something that the UK Government today are committed to doing.

The hon. Member talks about the impact of leaving our existing trade relationships in the customs union. That was part of that referendum. I understand how people feel intensely about that. [Interruption.] People have different interpretations of why they voted. We can relive the argument forever or we can focus on the future, on reducing barriers to trade and on the kinds of agreements delivering advantages for every part of the UK, and that is exactly what we are doing. Had we in this case still been part of the customs union, there would be no breakthrough with the US or the India trade deal. All colleagues need to balance up the two things alongside each other. In relation to the automotive sector, that lack of a breakthrough would have meant significant job losses this week in the United Kingdom, and that would have been very painful for all of us.

[Madam Deputy Speaker (Caroline Nokes)]

With what I am sure will be a pithy final question, I call Jim Shannon.

[Jim Shannon (Strangford) (DUP)]

You have set me a challenge, Madam Deputy Speaker. I thank the hon. and learned Member for North Antrim (Jim Allister) for securing this urgent question. It is so important to talk about this issue in this place. It has caused considerable problems for my Strangford constituents. In particular, I mention three distilleries—Echlinville, Rademon and the Hinch—but many other businesses are affected, too. How does the Minister plan to address the tariff differentials that may arise for Northern Ireland following the UK-US trade deal? It may see any EU retaliatory tariffs on US goods being applied to US goods entering Northern Ireland, potentially creating an Irish sea border for US goods.

[Jonathan Reynolds]

There is only one Member for Strangford, and no one could mistake him for anybody else in asking a question of that sort. He asks about the definition of whether goods are at risk of entering the single market when they come into Northern Ireland. That is based on a percentage differential in the tariff between the United Kingdom tariff rate for a good or tariff line and that for the EU. I believe that a 3% differential puts a good coming into Northern Ireland potentially at risk and therefore considered for the higher tariff up front. In this case, that would be the EU one, and it would then be reimbursed. I understand that it is a more complex position for businesses in his constituency than for many other things, but we have to make this work. We have to be committed to working with businesses in his area, in Northern Ireland and in the wider United Kingdom, and specifically with political leaders, to ensure that we are getting this right. I am hearing, and I have heard many times, about how we can make that system smoother, more reliable and more efficient. We will take that away and work with our colleagues to do that.

However, the system in place is balancing many different competing pressures, and there are no obvious or easy solutions. I was a parliamentarian when we went through all the potential outcomes when a different party was in charge. Let us make it work. Let us listen where we need to improve things, but let us recognise that this agreement fundamentally addresses some of the core problems that existed when this country chose to leave the European Union.

[Madam Deputy Speaker (Caroline Nokes)]

I thank the Secretary of State for his very detailed answers this afternoon.