Caroline Spelman MP: Let's hear it for a US/EU trade deal - which could account for half of global trade

Caroline Spelman is the Member of Parliament for Meriden and is a former Environment Secretary

Hardly a week goes by in which I don’t see a huge car transporter making its way to Southampton docks from my constituency in the Midlands - the embodiment of our export-led recovery. Did you know that a white Range Rover is the chauffeured car of choice in emerging markets retaining at £200,00 a pop? The luxury brands are selling well, but so too are British-made mass volume cars and for the first time in a long time we are a net exporter of cars. 

These market opportunities could be greater still if a bi-lateral trade agreement could be struck between the US and the EU - as envisaged by David Cameron, who announced formal negotiations to reach one yesterday. The motor manufacturers on both sides of the Atlantic can see huge advantages in mutual recognition of each other’s regulations, since this would save costly adaptation of models without compromising safety.  A US-EU trade deal would account for over 50 per cent of global trade, and the significance of this is that we can then call the shots on standards.

This is incredibly important at a time when emerging markets are growing in significance because we need the global standards to be ours. The likelihood is that manufacturers like those in Japan would want to join our standards, and that is the way a global standard is born.  That would give our industry a huge advantage, and enshrine the high standards we expect to protect motorists, their passengers and other road users. It would have been a triumph of global diplomacy if a global trade agreement had been achieved under the Doha round, but this proved just too big a mountain to climb in these difficult times.

So bi-lateral trade deals are second bes -, but one between the world’s two biggest trading blocks would be a very good second.  It is estimated that an EU-U. trade agreement could be worth £19bn to the UK economy.  The attraction to the US of accessing the EU’s 500m consumers on preferential terms is mirrored by the attraction to EU exporters of an American market of 316m consumers buoyed up by cheaper energy than ours. The political leaders see the opportunity, but Barack Obama has made it clear this deal needs to be done in timely fashion, and not drag on as Doha did. 

The European Commission will lead these negotiations but Ken Clarke carries the responsibility for alerting them to UK interest on this. My own experience of negotiating internationally under an EU banner is that an enlightened Commissioner will maximize the benefit of special relationships such as ours with America.  The motor industry is just one example of what could be achieved through a bi-lateral trade agreement, but it is a good one since American companies are heavily invested here and there are close links through the US ownership of British companies. The tie up between FIAT and Chrysler is just one example of this.  

The motor manufacturers see regulatory reform as a top priority and have been working through a process in Geneva to narrow down the sticking points. An example of this is that European cars for export to the US have to pass a safety test for unbelted occupants, as seatbelts are not compulsory there.   This intriguing example shows how mutual recognition of manufacturer’s endeavours to improve safety would open up new opportunities.

This is especially important for specialist manufacturers of, for example, sports cars - because the smaller production numbers make the extra hoops and hurdles uneconomic. Emissions standards are another example, since the individual states in the US have different ones, making it harder for our exporters. whereas in the EU we have a common standard and that brings savings to our manufacturers and those who export to us. It is projected that a US-EU trade deal could increase motor vehicle exports from the UK by up to 25 per cent and jobs by 7 per cent.

So I would expect to see many more lorry loads of cars from the Midlands manufacturing - but his time heading to the Atlantic gateway. The Transatlantic Trade and Investment Partnership (TTIP) is a once in a generation opportunity to boost the economies on both sides of the Atlantic by billions of pounds at a time when we really need it.