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INTERVIEW: The UK needs better scrutiny for a ‘new era’ of trade policy

Chris Horseman spoke with Labour MP Liam Byrne to discuss improving scrutiny of the United Kingdom’s trade policy and the future of its trade relationship with the European Union. 

Liam Byrne, chair of the House of Common’s business and trade committee

The UK is facing at least ‘three decades’ of geopolitical complexity in which improved parliamentary scrutiny of domestic trade policy will be increasingly vital. 

This is the view of Liam Byrne, chair of the House of Common’s business and trade committee. 

In an exclusive interview, the Labour party politician spoke to Borderlex about the urgent need for improved strategic analysis of trade policy, his desire to see trade policy contribute to creating a more equal society and how improved ‘political kinetic energy’ could transform relations between London and Brussels. 

Borderlex: You have chaired the House of Commons’ business and trade committee for four months now. What are your impressions of the UK’s parliamentary scrutiny system for trade agreements? 

Liam Byrne: They are very poor. The secretary of state [Kemi Badenoch] made a lot of commitments to our committee about triggering a debate, ideally on a voteable motion, on the UK’s accession to the Comprehensive and Progressive Agreement on Trans-Pacific Partnership. But there will be no debate on the trade treaty itself, nor is there any sign of a voteable motion. 

So we have found that the Commons’ mechanism for scrutinising trade treaties is inadequate. 

The UK ratifies trade agreements via the 2010 constitutional reform and governance act – or CraG. Is that act no longer fit for purpose? 

At the time it was adopted, CraG was quite groundbreaking. It was created to put some parliamentary ‘bottom’ on what had hitherto been the prerogative powers of the executive.  

That was in an era before Brexit. But it was also in the era before trade security rose to the top of the agenda.  

We are now in a very different era of geopolitics, which I am sure will be at least three decades long. We will have to navigate new dilemmas that help us balance our ambition for open and free trade with our ambition for economic security.  

There are no easy answers to those dilemmas and we as the western world are going to be feeling our way for some time to come. 

For that, we will need much more parliamentary debate and much more parliamentary oversight of trade policy. We are in new territory and it will probably take 5-10 years before a new consensus is formed. 

If Labour wins the next election [expected in the autumn of 2024], what promises can you make about improving the scrutiny of trade deals? 

I don’t know! That is a question for Jonny Reynolds, Labour’s shadow business and trade secretary. 

If you had been granted a vote on the UK’s new trade agreements with either Australia or New Zealand, would you have voted for or against? 

I would probably have voted for. But that question underlines why the process needs to change. A vote on the final draft of the agreement is much too late – it’s basically a black-and-white choice at that stage.  

A better approach would be for the government to bring a negotiating mandate to parliament at the beginning of the process. This could be approved or amended so that trade negotiators have a much clearer framework to guide their negotiations. 

These debates are going to come up a lot. Unless we get our act together as a parliament, we deny ourselves the opportunity to build the capability that we will need to govern in a very different era of geopolitics. 

What role do you see for business and trade in steering UK trade policy? 

A future government will seek to stimulate economic growth and it will have to set out what contribution it wants from trade in meeting that ambition. 

That will take us to a strategic analysis of where we need to focus our trade efforts. It will beg the question as to whether CPTPP is a priority when it adds such a nugatory amount to trade growth in the future.  

We may well conclude that the real ‘bang for buck’ comes from investing in a much stronger relationship with our closest and largest market, the European Union. 

As a committee, we are currently running a strategic inquiry on export-led growth. Under that topic we hope to produce a number of reports – one on the UK-US relationship, one on UK-EU and one on UK-Asia/Pacific. 

Our goal in producing these reports is to make sure that manifesto writers from all parties have the best ideas on the table, produced out of this strange cross-party grinder called the select committee. 

The enquiry is important because if we can find the overlapping consensus between left and right on trade policy and exports, we stand a better chance of that policy being sustained over the course of many administrations in the next 30 or so years. 

I hope these reports will all be published before July. 

Labour has made a number of promises about forging a closer relationship with Europe if it forms the next government. How realistic do you think those pledges are, given that the EU seems fairly happy with the EU-UK trade and cooperation agreement as it stands? 

It seems clear to me that the EU will drive much harder for strategic autonomy under the next European Commission. 

The EU has a number of challenges to contend with – improving its competitiveness, de-risking critical supply chains and improving supplies of critical minerals. 

But Brussels will not hold out much hope of a stronger relationship with America, regardless of who wins the White House. EU policymakers have told me that if Biden wins it will be truce – but not peace. 

So in that world of new economic risks, the EU will want a closer relationship with the UK to help deliver some of the win-wins that it is going to need on security and economic cooperation. 

But even within the TCA there is plenty to go at in terms of deepening energy cooperation. We have to resolve the ‘cliff-edge’ between the UK and EU carbon border adjustment mechanisms. At current carbon prices, this implies a bit of a tariff barrier in the future. 

The North Sea is potentially one of the world’s biggest power plants [via wind energy], and the net-zero plans of many northern European countries depend on unlocking that potential in the future. 

And then there are shared ambitions around youth mobility. 

So there is a huge agenda there and all of it is good for UK-EU trade. 

Labour has ruled out rejoining the single market and rejects any dynamic regulatory alignment with the EU. So how can you reach a bilateral veterinary agreement, or make any of the other improvements in the EU-UK relationship that you claim to aspire to? 

If Labour party leader Keir Starmer and commission president Ursula von der Leyen are wise, they will try and timetable an EU-UK strategic summit early on in the life of the new UK parliament and new [2024-2029] commission.  

That summit should focus on the future of the UK-EU relationship – not the TCA. 

The scheduled review of the TCA [in 2026] is a bit of a red herring. It will be a dry, technical exercise that is not going to yield much. Most commission officials think that the TCA is about the most ambitious trade agreement you can have, given the red lines that both Labour and the Conservatives have already set out. 

But they would argue that even within the TCA there are plenty of areas that could be developed with a lot more kinetic energy. 

Linking vehicle databases is one thing, mutual recognition of qualifications is another. They are reasonably technical points, but for these things to happen you’ve got to have political kinetic energy.  

At the moment there are no UK ministers visiting Brussels to try and get the bureaucracy moving.  

A different relationship can unlock a different kind of energy. And in that new strategic framework that helps both of us reinforce our economic security you’ve got the makings of a much deeper and richer partnership in which things like the veterinary agreement suddenly become a lot easier. Because it’s politics – ultimately. 

EU officials say that the UK has to stop weaponising visits of UK ministers to Brussels. We need people showing up, doing the work, being creative, finding ways forward and resolving problems. 

Will Labour pursue to a conclusion all of the UK FTA negotiations which are currently in flight? Or might you discontinue some of them? 

I don’t know. What we as a committee will help supply is a clear analysis of where the growth markets are for the future, and then we will provide an assessment as to whether the current trade treaties are in the right places. 

In parliament at the moment there is a lack of strategic analysis as to which are the best places to go for trade treaties if your objective is faster, fairer growth of the UK economy. That’s the kind of analysis that I hope we can set out. 

Would you want to remain in trade policy after the election? 

My principal work is around policies that help deliver a more equal country and trade policy has a really important impact on that.  

I would love to continue in the role that I’m playing at the moment. But that will completely depend on how many seats Labour wins, and the negotiations between the parties after the election as to which party gets to control which committee.

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