Sat, 13 July 2024

Newsletter sign-up

Subscribe now
The House Live All
New opportunities: strengthening UK & EU relationships once more Partner content
By Christina Georgaki
How clean energy will help deliver UK economic growth Partner content
By Social Market Foundation (SMF)
Pensions are in desperate need of reform - this is how the next government should do it Partner content
Press releases

A trade secret: What are the UK’s aims as it pursues new deals?

6 min read

What are the UK’s aims in the pursuit of new trade deals? It seems such a simple question, yet ministers are unwilling, or unable, to answer it, according to a growing band of critics. Rob Merrick digs into the issue.

More than three years after Brexit, and almost seven years since the referendum was won, critics are warning that the UK’s “priorities and objectives” in its multiple trade talks remain an enigma – an uncertainty damaging to businesses and government alike.

There are fears for firms at risk from cheap imports, that worker protections and economic security are being neglected, that wider opportunities to improve trade performance are being missed and the ‘net zero’ climate promise undermined. And, also, that the government is weakening its own hand in negotiations.

In the words of Michael Gasiorek, a trade expert who gave evidence to a recent parliamentary inquiry: “There is a lack of joined-up thinking about trade policy and how it might be used most effectively to achieve domestic policy objectives. 

“In the face of the challenges we face – geo-political tensions, supply chain resilience, climate change, regional policy, an industrial strategy - there is a lack of a conversation and transparency about those objectives and how we want to achieve them,” the director of the UK Trade Policy Observatory at the University of Sussex warned.

The rebuke opens up a new front in criticism of the post-Brexit trade revolution, which normally centres on the stark evidence that whatever deals are struck can never compensate for the economic harm from erecting trade barriers with the EU.

A chorus of voices is now calling on Kemi Badenoch, the business and trade secretary, to publish a clear “trade policy framework” for proper scrutiny – modelled on the USA and New Zealand – but with little sign she will listen.

Let’s take a step back. Ask the government for its aims and it replies “growing exports and inward investment, “reducing market access barriers” and “championing the rules-based international trading system” – but little else.

What the critics want is the details beneath the gloss: How important are labour and environmental standards? What about boosting the UK’s poorer regions, labour mobility, recognising professional qualifications, tackling climate change, protecting the UK’s economic security and foreign policy objectives? What is the balance between consumer and producer interests? Is the UK prioritising reform of the World Trade Organisation? And much, much more.

Moreover, they say, the likes of the USA and New Zealand have sought to answer these questions – the former with a “worker-centric” agenda, the latter with much-admired commitments to use trade to protect the environment and put climate centre stage.

a boatIt is a far cry from the secrecy surrounding the UK’s new trade agreements. Notoriously, the details of how the 2021 Australia deal opened up access for its farmers were published openly in that country – even as London tried to keep them secret.

Now the issue has been confronted by the House of Lords International Agreements Committee, which has demanded a proper trade framework after speaking to business and union leaders, civil society groups, academics and other experts.

They included the Food and Drink Federation, whose head of international trade Dominic Goudie told The House about the dangers of signing a deal with India without a clear-sighted approach.

Mr Goudie explained that the UK’s “thriving rice-milling sector” would be undermined by “flooding the market with processed rice” from India – which would also remove vital food safety checks and push up prices by running down domestic stocks.

“It could have a chilling effect on investment if those businesses fear the trade deal could undermine their UK operations,” he said, highlighting how attempts to uncover ministers’ intentions have hit a brick wall.

“It’s a question of public safety, price and jobs. It’s not about protectionism, or stopping imports – it’s just stopping that finished product coming in in a volume that could sink a domestic industry.”

For the Trades Union Council (TUC), a crucial weakness is a failure to even debate whether trade deals should enforce workers’ rights, in stark contrast to the 2020 United States-Mexico-Canada Agreement (USMCA).

It boasts an explicit “rapid response labour mechanism” already used to sanction six firms guilty of bad practice or union-busting in Mexico, a “core tenet” of a “worker-centred trade policy” says the Biden administration.

Rosa Crawford, the TUC’s policy officer for international trade, explained: “It stops the race to the bottom, with obligations for all the countries to adopt and respect International Labour Organisation conventions. There’s a legal underpinning through the trade agreement.”

Here in the UK, the TUC is required to sign a non-disclosure agreement to join an advisory group on any proposed trade deal – but protested it is told nothing more about objectives than is made public anyway.

“It’s absurd,” Ms Crawford added. “We sign these agreements, but we only see the text of the agreement when it is finalised and nothing can be done about it. In the US, material improvements were made because trade unions were consulted.”

A major problem is that the trade department, now the Department for Business and Trade since a February shake-up, is viewed as “semi-detached” from a government otherwise committed to net zero carbon emissions and restoring nature.

The Green Alliance said this was laid bare by the way the Australia deal flouts climate goals by expanding its agricultural exports, but also warned the mistake risks being repeated in the hunt for an agreement with the six-nation Gulf Cooperation Council.

It would boost UK’s long-term GDP by as little as 0.06%, the government’s own impact assessment admits – while pushing up carbon emissions from shipping by as much as 43%.

“Why is the government risking significant emissions increases for little to no economic benefit?” asked Shaun Spiers, the Green Alliance’s executive director.

We sign these agreements, but we only see the text of the agreement when it is finalised and nothing can be done about it.

“None of the Gulf states have legally binding targets on net zero and some don’t have any. If the UK is serious about the Cop26 Glasgow agreement and the UK’s environmental leadership, shouldn’t it be demanding more from countries with which it strikes trade deals?”

David Henig, UK director of the European Centre for International Political Economy, criticised “the absence of clear purpose” in trade policy and a “defensiveness that seemingly takes pride in secrecy and resistance to proper scrutiny”.

In an article, he attacked the focus on exporters as “extremely unhelpful, overly simplistic”, and echoed Professor Gasiorek in arguing: “Trade policy must demonstrate what a country stands for, and how the government is seeking to meet broad policy goals.”

In a letter to Ms Badenoch, the chair of the International Agreements Committee, Baroness Hayter, said the need for confidentiality over “sensitive information” is no excuse for the absence of a clear “policy framework”.

Publishing that strategy would “show third countries how any items outwith the agreed framework could jeopardise ratification by Parliament. Such an approach is used by other countries and clearly strengthens their hand,” the letter argued.

However, the Department for Business and trade shows no sign of budging, insisting last year’s Outcome Delivery Plan already charts a clear path forward.

A spokesperson said: “Our strategy is focused on making the UK the best place to live and do business by securing high quality trade deals with the world’s biggest and fastest growing markets, growing exports, and attracting greater levels of inward investment.”

PoliticsHome Newsletters

Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.

Read the most recent article written by Rob Merrick - Building Blocks: How will Labour get housebuilding on track?

Engineering a Better World

The Engineering a Better World podcast series from The House magazine and the IET is back for series two! New host Jonn Elledge discusses with parliamentarians and industry experts how technology and engineering can provide policy solutions to our changing world.

NEW SERIES - Listen now