Tariff deal a pick-me-up for whisky

European Union commissioner for Trade Karel De Gucht has warned of severe consequences if Britain leaves EU. Picture: AFP

Karel De Gucht, who will be in Gleneagles as the year-long countdown to golf’s Ryder Cup begins, will tell an audience of business leaders and politicians that Scotland’s national drink will gain from a “larger and more open” market if talks over the transatlantic trade and investment partnership (T-Tip) prove fruitful.

The United States is Scotland’s biggest overseas trading partner, with Americans buying £3.5 billion in Scottish goods in 2011, including £758 million of whisky.

Speaking to Scotland on Sunday, De Gucht said: “In all of the free trade negotiations I’m conducting, I discuss Scotch whisky. You really should be happy that the world likes your whisky – I do as well.”

Whisky already enjoys a zero-tariff arrangement with the US, but the Scotch Whisky Association (SWA) said the T-Tip has the potential to open up more markets where distillers could be struggling to grow their exports.

For example, India is the world’s largest consumer of whisky, but Scotch accounts for just 1 per cent of the market, which the trade body blames on “exorbitant” import duties of 150 per cent.

David Williamson, deputy director of international affairs at the SWA, said: “Whatever is agreed by the European Union and the US has the potential to set precedents for trade deals with other markets where there may be more issues for whisky producers looking to grow exports.

“An agreement with the US could set globally relevant rules and guidelines.”

T-Tip talks began in July, with an aim of completing the negotiations by autumn 2014, and De Gucht said the deal was a “priority” for Europe. A second round of discussions is due to be held in Brussels next month.

De Gucht, the former deputy prime minster of Belgium, added: “We have a common aim to get to an agreement as soon as possible. This would be a terrific boost for our economy and that of the US. It could really help us out of the crisis in a sustainable way.”

Along with a goals of eliminating tariffs on “99 per cent” of products, he said the T-Tip could save European households an average of ¤545 (£460) a year by slashing red tape such as costly safety checks in the US for cars that have passed stringent tests in Europe.

“We have a lot of red tape, or non-tariff barriers, and they impact on the price of products,” De Gucht said. “We estimate it’s 10-20 per cent on the price of a product, which compares with typical tariffs of about 4 per cent between the EU and US.”

De Gucht refused to be drawn on questions about “constitutional arrangements in the member states” with Scotland’s independence referendum.

However, with Prime Minister David Cameron promising an “in-out” vote on EU membership, De Gucht said it would be a “terrible mistake” for the UK to leave the bloc.

First Minister Alex Salmond said: “The ability to take advantage of massive trade agreements such as this is one of the fundamental reasons why it is so important for Scotland to remain in the European Union.”