North Staffordshire’s ceramic manufacturers could be among the big winners from a trade deal with the United States, Government ministers have claimed.
Pottery firms such as Middleport-based Steelite International currently face ‘highly punitive’ tariffs of up to 28 per cent when they export products to America, putting them at a significant disadvantage to competitors.
But the Government is seeking to secure tariff-free access to the US market for British exporters, as trade negotiations between the two countries get underway.
This could allow Stoke-on-Trent’s ceramics firms to sell more to the US, potentially leading to the creation of more skilled jobs in the city.
The economic benefits of a free trade deal with the US was one of the arguments deployed in favour of Brexit. While it was a member of the EU, the UK could not negotiate its own trade deals, with a ‘common external tariff’ covering the whole union.
But industry leaders have raised concerns that slashing non-tariff barriers could lead to a dilution of standards for ceramic products – which could put UK producers at a disadvantage.
The Department for International Trade (DfIT) has given Steelite International as an example of a British manufacturing business which could benefit from increased trade with the US.
The firm is the largest exporter of dinnerware to American hotels and restaurants, but its products are currently subject to import tariffs of more than 25 per cent.
Steelite, which employs hundreds of people at its Orme Street base, was acquired by American private equity firm Abor Investments last year.
Steelite CEO John Miles said: “As the largest exporter of dinnerware to the US hospitality market, the current 25.5 per cent tariff is highly punitive.
“A reduction of this tariff would not only drive new jobs and investment in the UK, it would also drive investment in the USA operation located in New Castle, Pennsylvania.”
According to DfIT’s negotiating objectives document, the best case scenario, involving ‘full tariff liberalisation and a 50 per cent reduction in non-tariff measures’, would see exports to the US increase by 7.7 per cent. This would give a £3.4 billion boost to the UK economy, equating to a 0.16 per cent increase in GDP.
DfIT says the West Midlands economy would grow by £363 million, making it one of the regions expected to benefit the most from a free trade agreement with America.
Ministers say any trade agreement would have to ‘uphold our high standards on food safety’, following concerns over imports of chlorine-washed chickens and steroid-injected beef from America.
But the British Ceramic Confederation has raised similar concerns over the regulation of ceramic products, due to the Government’s stated aim of cutting ‘red tape’.
BCC chief executive Laura Cohen said: “A USA trade agreement could help our sector. For example, there are high tariffs on ceramic catering-ware imports (up to 28 per cent), and without this barrier our exports to the USA could grow.
“Our members would have concerns if there is so-called ‘mutual recognition’ of standards. They say some other standards in the US allow higher impurity levels or too much flexibility in testing than the more rigorous international standards.
“As a country, we should be worried if this reduces product quality for consumers – remember, ceramics are used in medical implants, cars and planes and our manufacturers would be concerned too as this could damage sales at home of their British-made products.”
The BCC has previously stressed the importance of securing a comprehensive trade deal with the EU, which accounts for more than half of all British ceramic exports. Trade talks with the EU are also starting this week.
Government ministers say they are seeking ‘an ambitious and comprehensive free trade agreement’ with the US, opening up opportunities for British businesses and facilitating greater choice for consumers, while ‘rigorously’ protecting public services such as the NHS.
But International Trade Secretary Liz Truss insisted the UK would drive a ‘hard bargain’ and would not be afraid to walk away from the talks.
She said: “Striking ambitious free trade agreements with our partners around the world is one of the key opportunities of Britain becoming an independent trading nation once again.
“This deal with our biggest single trading partner will cut red tape for our small businesses, cut tariffs for our great products from dairy to cars and increase growth in all four nations.”