UK-US Trade

Baroness Gustafsson Excerpts

Monday 12th May 2025 Lords Chamber

[Lord Lamont of Lerwick]

To ask His Majesty’s Government what further action they plan to take to protect and increase trade between the United Kingdom and the United States.

[The Minister of State, Department for Business and Trade and HM Treasury (Baroness Gustafsson) (Lab)]

My Lords, on Thursday 8 May we were delighted to announce the agreement of a landmark economic deal between the United Kingdom and the United States, making the UK the first country to get an agreement with President Trump. It was the second major trade announcement of the week, following the India free trade agreement on Tuesday 6 May. What we have agreed will provide the foundation for a new reciprocal trading partnership between the US and the UK and secure actions that will protect jobs across the country and protect British businesses.

[Lord Lamont of Lerwick (Con)]

I thank the Minister for her reply, but after all the self-congratulation has faded away, is it not clear that this agreement is very far from being a comprehensive trade agreement of the type that ought to be possible in this post-Brexit world? Is it not the case that British firms are now worse off than they were before 2 April—so-called “liberation day”—because of the 10% tariff? Although it is welcome that the worst draconian tariffs have been reduced on motor cars, British firms are worse off than they were before. If the Government regard this as just a transition to a more effective, more comprehensive deal, is it not important that they give that priority and do away with thinking about dynamic alignment with the EU market?

[Baroness Gustafsson (Lab)]

The noble Lord is right that there is still a lot of work to be done. But having spent time with the many very capable and hard-working officials who have been part of this deal, it is worth acknowledging the hard work that has gone into this, which we are very appreciative of. The reality of this situation is that it has lifted some of the barriers to trade for many of our industries and some of the key sectors that we really value—for example, the automotive, steel and pharmaceutical industries. The noble Lord is right that there are still a lot of industries that have not been covered by the scope of this agreement. We are just starting on our journey, making sure that we can build on the strong trading relationship between the US and the UK and continue this approach of removing the onerous tariffs and supporting the people, industries and sectors supported by this.

The areas that have been covered by this agreement employ over 320,000 people within the UK, with a further 260,000 jobs within the UK supporting these sectors. Yes, it is just the first step in negotiating the fuller economic situation with the US, but I think the noble Lord will agree that it is a very powerful one.

[Lord Watts (Lab)]

My Lords, is it not the case that no matter how good a deal we do with America, Europe is our most important trading partner and the one that we should concentrate on and get the most out of?

[Baroness Gustafsson (Lab)]

I agree with my noble friend that our trading relationship with the EU is incredibly important. I do not believe in the premise of false dichotomies or that we are picking between one and the other. This is a continuing relationship and dialogue. I note that there is a very important EU summit coming up in May, which should really endorse and build on our relationship with the EU.

[Lord Purvis of Tweed (LD)]

My Lords, if this is a first step, was the Minister not as confused as I was yesterday to hear our ambassador to the US say on CBS’s “Face the Nation” that this was a finalised agreement? There is no impact assessment that we have been presented with in Parliament, so when is that impact assessment going to be laid before Parliament? He also said that film and technology were included, but there is no reference to that within the text of the announcement last week of the framework to start negotiations. Is it the Government’s intent that this will not be laid as a treaty that would then be ratified by Parliament? If it is not, and it is not a preferential trade agreement, does the Minister agree that we will have to apply all the terms in this framework to all other countries under WTO rules?

[Baroness Gustafsson (Lab)]

To clarify, a lot of key sectors are covered in this framework, and this framework is a final decision on how those key sectors will be treated when it comes to trading between the UK and the US. Those sectors are things such as automotive, steel and pharmaceuticals, but also beef and ethanol, which we have heard so much about. But they are not all the sectors where trade is a part of the UK-US relationship; it could be areas such as technology and how we think about the relationship with that. So yes, this is a final agreement for the sectors that have been covered, but it does not necessarily cover all the sectors. There is still work to be done to understand what those future trading relationships look like with respect to those other sectors.

With regard to how this will be treated within Parliament and whether it will be ratified as a treaty, forgive me—I could not comment on that specifically. I would very quickly run shallow of my parliamentary journey of knowledge, which is still at its earliest stages, but I will be sure to write to the noble Lord on the specifics.

[Lord Inglewood (CB)]

My Lords, I refer to my declaration of interests. Does the Minister believe that British agriculture’s profitability will be increased or diminished by this arrangement?

[Baroness Gustafsson (Lab)]

What we see in this relationship with the US is an opportunity to think about the opportunity it presents to all our British industries and how we can open that up to best effect. When we think about farming, the key area of the trade in beef is a real opportunity here. For the first time, the US ban on importing British beef has been lifted, and 13,000 tonnes of British beef can now be exported to the US. That is a real advantage for UK farming.

[Lord Forsyth of Drumlean (Con)]

My Lords, it is delightful to hear the Minister extolling the real opportunity that comes from a future deal with the United States. Last week I asked the Front Bench to confirm that none of this would be possible if we were still in the European Union. I was told that was a matter of opinion. Can the Minister confirm that this is a fact?

[Baroness Gustafsson (Lab)]

I will offer up that I agree that that would be a matter of opinion.

[Lord Foulkes of Cumnock (Lab Co-op)]

My Lords, is the Minister, like me, fed up with the moaning coming from the Opposition? Does she agree that they had 14 years and did not negotiate any trade deal with the United States, so they are the last people who should be critical?

[Baroness Gustafsson (Lab)]

I would be very delicate about suggesting such a thing, but one of the things that we do really well within this nation is that, whichever side of the House we are sitting on, we all want to see the opportunity to trade and understand the value that it contributes to the UK economy. I think we can all agree that this is a really powerful first step that supports the great nation that we all operate within.

[Baroness McIntosh of Pickering (Con)]

The noble Baroness will be aware that one of the reasons we were unable to negotiate a trade deal with the EU was that we did not wish to introduce hormone-produced beef. If the animal is fed with hormones, it does not show up. How can she reassure the British consumer that we will not import any beef produced with any hormone whatever?

[Baroness Gustafsson (Lab)]

I thank the noble Baroness for her question. It is an important point that we have been able to open up such trading opportunities while protecting our incredibly powerful and well-respected food standards. I am not necessarily familiar with the specifics of how we can detect whether those standards have been complied with, and I will endeavour to write to her to follow up on that matter.

[Lord Londesborough (CB)]

My Lords, I give some credit to the Government for signing a damage-limitation deal with the US, for that is what it is, but this five-page agreement does not actually constitute a legally binding document. Can the Minister confirm that, currently, it can be terminated at will by either side? If so, what longer-term assurances can the Minister offer to UK exporters, given the erratic nature of US trade policy?

[Baroness Gustafsson (Lab)]

We are operating in incredibly fast-moving times. This agreement lays down those anchor points and principles to allow our great industries to be able to continue to trade, but there is more work to be done in fleshing out the specifics and making sure that this is enacted and is something that people can use day to day in their trade. Our brilliant team of officials are working very hard on ensuring that this gets done within the coming weeks.

[Lord Sharpe of Epsom (Con)]

Following on from the Minister’s last answer, can she say what steps the Government intend to take to address the continued imposition of the 10% baseline reciprocal tariffs on most UK goods entering the US?

[Baroness Gustafsson (Lab)]

For the remaining areas of trade that are not covered by this agreement, where there still are reciprocal tariffs, there is a number of industries that we identify as key and there is an ongoing dialogue and conversation. It is important to note that this agreement is not an end. It is not a conclusion of all the conversations. Those negotiations are happening all the time, and we should anticipate seeing more agreements of this nature.