Negotiating trade deals doesn’t have to take this long
Negotiating free trade deals is as easy as the parties involved want it to be. The lack of a UK-EU deal is down to the lack of political will
In the years immediately preceding and following the Brexit referendum, categorical speculations have been aired about the length of time required to negotiate a trade treaty. These conjectures appear intended to persuade onlookers that trade treaties variously are easy to conclude and can be negotiated expeditiously or, conversely, are difficult to conclude and necessarily take considerable time to negotiate.
The reality is neither one nor t’other. Like most negotiations of any kind, trade treaty negotiations are as difficult (and thus as lengthy) as the negotiating parties care to make them. It follows from this that the most significant factor – by far – in determining the length of time that it will take to negotiate a trade treaty is the political will of the parties.
For example the CUSMA (the “new NAFTA”) took 13 months for Canada, the USA and Mexico to negotiate and the Japan-UK free trade agreement took three months to negotiate.
Trade agreements are no longer exceptional or mysterious. Like residential mortgage contracts, standard and accepted terms now exist that provide templates for states
Not all trade agreements are negotiated quickly. The recent Regional Comprehensive Economic Partnership treaty, encompassing the ASEAN member states plus Australia, China, Japan, New Zealand, and South Korea, took eight years off-and-on to negotiate. However, that negotiation was slowed by the political will of the parties and was complicated by the interpolation of the Trump Presidency into US Asian trade policy.
Trade agreements are no longer exceptional or mysterious. Like residential mortgage contracts, standard and accepted terms now exist that provide templates for states to deal with most trade issues. Precedents are easily accessible, from which states can and do choose to base the texts of new trade treaties.
Furthermore, there is nothing improper or unusual about states piggy-backing on existing trade agreements. The CUSMA is an example of implicit piggy-backing: in large measure, the CUSMA is a restatement of the Trump-scuttled Trans Pacific Partnership trade agreement. There are numerous examples of agreements between states that explicitly adopt all or parts of other treaties (indeed, the UK and the US just did this for transatlantic flights by replicating between them the existing EU-US open skies agreement).
The UK can avail itself of numerous public international law mechanisms to enter into economic treaties of various kinds on a highly accelerated basis. This includes treaties to ensure the UK’s trade relations status quo continues uninterrupted post-Brexit. Here is the basic initial text for a fully effective, post-Brexit trade treaty between the UK and a state that is a current trade partner with the EU (provided free of charge to HMG – plus VAT):
The United Kingdom and Ruritania hereby agree that the rules and principles of trade between them shall be those which existed between the European Union and Ruritania as at 23h59 GMT on 31 December 2020.
Such a treaty could then adjust those EU-derived rules and principles to reflect factors such as relative sizes of economies. It could also provide that it would remain in effect until modified by agreement. It could include an end date by which the parties need to have renegotiated it. It could include a date by which the parties must begin renegotiations.
Such concise, piggy-back trade treaties would enable the UK and its trading partners to maintain the status quo until they negotiate bespoke agreements.
This discussion leads inexorably to the thorny question of why EU-UK trade negotiations have yet to produce an agreement. The answer is not because trade treaties take decades to negotiate (recall the rapid conclusion of the Japan-UK trade agreement). Nor is the answer because trade treaties between large economies that have become closely interconnected under different trade rules for a significant period of time are highly complex to negotiate (recall the rapid transition from NAFTA to CUSMA).
The reason why there has been no EU-UK post-Brexit trade agreement to date is that the political will of one or both of the EU and the UK is preventing an agreement from being reached. As to which is to blame (or whether both are) and why, those are questions for another day.
Robert G Volterra is a partner at Volterra Fietta and Visiting Professor of Law at University College London