Sir Crawford Falconer Interview: “The House Is Still On Fire" After Trump's Tariffs
“At the moment, the house is still on fire,” the trade negotiating New Zealander says (Dinendra Haria)
8 min read
Sir Crawford Falconer was the UK’s chief trade negotiation adviser until the end of last year, when his contract ended – and the Labour government declined to renew it. To scrap the post makes for an interesting decision now that questions around global trade are so dominant.
“At the moment, the house is still on fire,” the trade negotiating New Zealander says of Donald Trump’s return to the White House and its implications for the UK. “I don’t see this as benign. I’m not that naïve.”
Caught between the US and EU, Keir Starmer’s government is being forced to make tough choices on who to prioritise. Ideally, ministers would strike a trade deal with the US before the EU-UK summit in London begins on the 19th of this month, allowing the UK to get the best out of both. What are the chances of that happening?
“You could get a deal over the line on Sunday,” Sir Crawford says, “but it depends whether it’s good or not.”
He continues: “If what both parties want is something that looks like a real agreement, it’s very difficult for a long-in-the-tooth, ex-negotiator like me to see that being ready to ink in a matter of weeks. It seems unlikely.”
Sir Crawford reckons there has been naivety around the prospect of a quick deal. The bane of any negotiator’s life, he says, is “wishful thinking”.
When he packed up his desk in December, the world was wondering what a second term under Trump would look like. Four months later, politicians were left scrambling as the US President announced his “liberation day” tariffs from the White House rose garden, arguing that the US had been “treated unfairly by trading partners, both friend and foe”.
The UK appeared to have got off lightly compared to other countries, being hit with the minimum penalty – a 10 per cent tariff on all imports to the US. But a 25 per cent tariff imposed on the steel and car industries, as well as the potential for the UK medical and pharmaceuticals to be targeted in future announcements, have raised serious concerns.
Even after Trump’s decision to suspend the harshest tariffs, Sir Crawford is wary: “Having seen the behaviour, you’re never sure whether that lesson learned is accepted and people aren’t going to go back and repeat themselves.”
So, has the world entered a new era of protectionism? Sir Crawford acknowledges there has been a “significant shift” from the US, but remains optimistic: “I don’t get the sense that we’ve yet crossed the threshold of abandoning the basic shape of sensible economic policies.”
I’m yet to see the part of the play where I could say, ‘Ah, so that’s what he [Trump] was up to’
He recommends that the UK trade negotiators take a two-step approach to any agreement with the US: first, a short-term quick fix to relieve pressure; second, negotiations for a more enduring agreement. The problem, the expert negotiator warns, is that Trump’s end goal is still unclear.
Is Trump a good negotiator? “Well, if he is, I’m yet to see the part of the play where I could say, ‘Ah, so that’s what he was up to’,” Sir Crawford replies. “It’s not difficult to daze and confuse people, but what’s the point of it?”
And, from the UK’s perspective, what would a good deal with the US look like? “There’s a spectrum,” he says cautiously.
A tech-focused US deal was floated when he was in post, he points out. “Even under the Biden administration, I don’t think I’m giving away too many secrets at the confessional when I say there were groups of people who said, ‘let’s forget about trade agreements and just do this’,” he says, referring to a deal on tech. “Well, that’s okay, but they’re not trade agreements.”
There are concerns such a deal could wave through big tech’s wish list. On this, Sir Crawford has a clear view: no deal should compromise the effectiveness of the Online Safety Act, seen as a key pillar in protecting children from online harms – that would be too high a price to pay.
“It seems to me that you’re wandering into dangerous territory,” he says. “To be saying ‘you’ve got to change your online safety to get rid of these tariffs’, that’s kind of like ‘we’ll be insisting that they get rid of the death penalty, otherwise we’re not going to lower our tariffs’. You don’t want to go there.”
As for a deal with the EU, he does not foresee the UK being given anything on services or an easy ride on regulatory arrangements on goods. He also highlights that there is a bigger deal overshadowing any the UK might make with the EU or the US: China.
A “double decoupled world”, as he calls it, with China “decoupled” in trade terms from the US, and the rest of the world “semi-decoupled” from the US, is “a very scary world”. That scary world is not just fantasy but “visible in the distance”, Sir Crawford says – before adding that he is keen not to be a “doomster”.
Building bridges with the EU is a theme Sir Crawford knows well, having headed up work to negotiate the UK’s trade deals after Brexit. Brexit was hailed for the opportunities it would offer the UK, so have we done enough with those open doors?
Sir Crawford does not think so, and puts it down partly to the government lacking the necessary experience. “Because the UK had effectively outsourced so much of that to the [European] Commission in the past, and to a brokering inside the EU, my view was that there was not the acute sensitivity to how you position yourself to deal with the global economy at a government-to-government level.” He describes this simply as “a factual consequence of having spent so long inside the EU”.
The UK has made progress forming other partnerships since Brexit, however, notably joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in December last year.
The CPTPP offers free trade between 12 countries. Does Sir Crawford think the UK needs to be deepening the relationship with CPTPP amid Trump turmoil?
I’m not in the game of a beauty contest between CPTPP and the EU. I’m sick of it
“In a Trump world, its value has increased,” he says, calling CPTPP one of the “real treasures that we have achieved in a post-Brexit world”.
But he also says he is tired of comparisons. “I’m not in the game of a beauty contest between CPTPP and the EU. I’m sick of it,” he declares. “The British public decided they were leaving the EU.”
“It’s our job to move on and to do as best we can with what we’ve got… There’s no point crying over spilled milk.”
Some have questioned whether, given Sir Crawford’s departure, the Department for Business and Trade now has a good set-up for negotiating the trade deals being sought by the government. He claims not to be too bothered by the scrapping of his post as second permanent secretary.
“In the minds of ministers, that was something that was needed at a particular point in time,” he explains diplomatically.
But he adds: “The only thing I would worry about is that it’s a straw in the wind that you don’t have an independent trade department, and you don’t have a leadership figure at that level on trade, making you more vulnerable to capture by domestic interests.”
Since Sir Crawford spoke with The House, the UK has a long-awaited trade deal with India, with the former trade chief saying the agreement makes "huge strategic sense" and "gives a platform for further progress in the future".
Pointing out that as more trade deals are done, more resources will be freed up, he says: “I could tell you 20 things that are wrong with the Whitehall bureaucracy when it comes to resourcing and all the rest of it for negotiations. But it has worked, and it sort of continues to work.”
Among critics of Labour’s decision not to extend Sir Crawford’s contract were the Conservatives. Before the general election, Sir Crawford worked with Kemi Badenoch as business and trade secretary. Now leader of the opposition, she is under fire from her own party – but Sir Crawford’s appraisal of her abilities is no less than glowing.
“I found her amazing,” he says, and dismisses accusations of Badenoch being “lazy” and “running on Kemi time”. That was not his experience, he emphasises.
“I think it’s pretty obvious why people would say that about a politician. You would go into her office, and you would not be going into a sleepy secretary of state. You’d better be at the top of your game if you’re going to see Kemi, that’s all I would say.”
While it was expected that Sir Crawford would soon be returning to New Zealand, where his wife and children live, the 71-year-old is yet to leave. He is not sure what he will do yet, saying: “I haven’t got anything.”
He is still getting dragged into politics – albeit of a very local character. He tells The House how he has been unexpectedly drawn into a dispute over access to a shared garden square on his street. He is insistent, however, that he will not be involved in the negotiations.
