Brexit & UK trade, Latest news, Perspectives

Perspectives: UK trade policy – stronger opposition needed for better results

Recent changes to the powers of the United Kingdom’s Trade Remedies Authority and last-minute hiccups in its prized accession to the CPTPP hide a deeper truth about the country’s trade policy.

Lacking a coherent strategy or a strong enough parliament scrutinising its actions the government’s negotiating partners know Britain can give in easily to their demands.

But negotiations on the Northern Ireland Protocol show that strong opposition helps achieve better results for Britain.

The UK is on the cusp of joining the Comprehensive and Progressive agreement for a Trans-Pacific Partnership. But unsurprisingly some of the CPTPP members, including Malaysia and Canada, are making final efforts to maximise gains.

With regard to Malaysia, it appears that the UK has accepted immediate reduction of palm oil tariffs, which will be combined with looser deforestation regulations than applied in the EU, thus making Malaysian exports to the UK easier.

Canada is pushing maximum agricultural market maximum agricultural market access having recognised that another ask, for the UK to accept hormone-treated beef, has been frequently ruled out by the government.

In the meantime UK ministers have given themselves far more powers to overrule independent advice from the Trade Remedies Authorities than originally invisaged.

These developments were predictable. But UK government officials would deny any such thing would happen.

Amusement at the gap between the government’s self-perception and its performance, perhaps in a very British way disguises some disquiet about why this is happening. Some would argue that it is inevitable that trade ‘middle powers’ are being bullied, others that post-Brexit UK just lacks practice.

These explanations have some merit. But there is also something about the UK system of government that is causing problems. With the executive largely not having to worry about parliamentary votes or debates, the cost of making and changing decisions is very low.

Even worse, third countries know that with a single overarching UK trade policy aim of signing free trade agreements, almost everything else is up for grabs in negotiations.

Australian surprise

The FTA with Australia is the precedent almost everyone except the government expected – including Australia.

There was a very good reason why the UK’s first completed free trade agreement concluded after Brexit was with Australia. Disadvantaged compared to neighbours New Zealand in agricultural quotas with the EU, and lagging behind on environmental regulation, it was enormously in Australia’s interests to make sure they were there first, and not let precedent be set by a deal with another country.

From Australia’s point of view, the deal exceeded any realistic hopes as it provided almost unlimited agricultural access to the UK market without conditionality or much reciprocation. In turn, while the deal was subsequently widely criticised in the UK, there has never been any prospect of it being rejected by parliament.

When it was pointed out to the government that this deal would undoubtedly be a precedent that others would seek to follow, that was denied vociferously by government ministers. Yet New Zealand and now Canada saw it exactly that way, and the UK government found it had no defence if it wanted CPTPP accession.

Beyond a handful of red lines such as hormone treated beef, the UK found it had little defence to third country asks. Whatever third countries asked for, in the absence of a good reason why not, UK officials would struggle to say no.

Trade remedies changes a another case of naïve early optimism

In the early days of the UK Department for International Trade, established soon after the 2016 Brexit vote, thegovernment was determined to show the extent to which the UK would be more free trading than the EU.

One facet of this was the intention to ensure that its new trade remedies regime would not be subject to the usual political pressures from powerful lobby groups. This meant establishing an independent Trade Remedies Authority to evaluate trade remedies cases based on economic evidence, and make recommendations that the government could only accept or reject in full.

Given the highly politicised nature of the industries most affected by remedies, however, most obviously steel, this was a bold or perhaps again naïve decision. While again it was unlikely that parliament would be able to vote against TRA decisions, MPs from both parties could and did make their displeasure clear where they thought the steel industry was not being properly protected.

Without a trade or industrial strategy, it is unclear how important the steel industry is economically to the UK, but the politics were clear enough. There was little stopping ministers reversing position, as they duly did.

Windsor Framework: Domestic opposition helps UK negotiators

Where most trade politics receive little UK attention, that is emphatically not the case for deals with the EU, still less when they involve Northern Ireland.

Here, the accounts of negotiating the Windsor Framework are instructive in that both sides were well aware of likely opposition – and worked together to try to find solutions to overcome this.

As yet, it is too early to tell if Conservative MPs or Northern Ireland’s unionists will accept the Windsor Framework. What can be said is that trade specialists have generally been more impressed with the content than in the case of any previous UK agreement. Solutions are creative, and show genuine movement from both sides.

Another previous and incorrect UK government shibboleth, that the EU will only move in negotiations under threat, has been proven wrong.

Whether the UK government can learn from this at least qualified success remains to be seen. At present there doesn’t seem to be the inclination to analyse negotiations collectively, or think beyond simplistic aims to get deals done.

Where the pressure may come from is with CPTPP accession seeming to once again put trade before the environment. This will add to the view from the Australia deal that the balance is not right, in turn affecting acceptability of future negotiations.

Fortunately, it shouldn’t be difficult for the UK government to change course and develop a trade strategy that includes more parliamentary engagement. That will also be the right thing to do.


 David Henig runs the column ‘Perspectives’ on the politics of global trade for Borderlex. He is also a UK director at the think tank ECIPE.

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