Good UK trade policy should start at home


The trade deal agreed in principle between Britain and Australia will set the baseline for the UK’s independent trade policy. This will be the first agreement — excluding the post-Brexit deal with the EU — that does not replace a treaty that the UK enjoyed as a member of the bloc. The provisions will therefore set a framework for other trade talks, showing what the UK is willing to give away to achieve its goals. Just as important, however, is the unfortunate precedent it sets in how the country’s trade policy is managed.

The 2016 referendum on UK membership of the EU demonstrated not only resentment about the economic effects of globalisation but also its struggles with political legitimacy. Britons, said David Cameron when he announced in 2013 he would seek an in-out referendum, had “seen treaty after treaty changing the balance between member states and the EU. And note they were never given a say.” Yet this latest chapter in Britain’s trade policy is again being written behind closed doors.

There has been little parliamentary scrutiny of the Australian trade agreement or heed paid to interested parties. The most controversial aspect is its impact on farmers who fear they will face competition on prices and standards from industrial-scale Australian producers while simultaneously being asked to absorb the costs of the green transition. Many backbench Conservative MPs, as well as those in the opposition parties, agree. Even members of the cabinet are reported to be split, with the department for international trade on one side and the department for environment, food and rural affairs on the other.

It is the norm in the UK and, indeed, many other countries for the executive to be given a free hand in international negotiations. Treaty-making in Britain is a “prerogative power”, or one the government wields on behalf of the Queen; no parliamentary approval is required. Treaties must be ratified but cannot be amended. Even if parliament rejects a treaty, this just restarts the clock; the government can resubmit it repeatedly for parliamentary assent.

Prime Minister Boris Johnson agreed the broad outline of the deal with his opposite number over Scottish salmon and Welsh lamb but the devolved administrations lack a significant say. With no responsibility for its contents, the Scottish National party will have an interest in scaremongering over the deal’s impact on Scottish farmers. The Northern Irish protocol, agreed with the EU as part of the withdrawal agreement, will mean any trade agreements do not fully apply to the province.

There is a balance to be struck. Negotiations require a country to present a united front and speak with one voice. Yet parliamentary buy-in as well as improved transparency and wider political support are vital to see deals over the line. The Swiss government agreed a deal with the EU to upgrade its relationship with the bloc but domestic critics picked it apart. In the UK’s own Brexit negotiations, a lack of domestic consensus over what the future relationship should look like was the greatest barrier to striking a deal.

Bottling up disagreements will not make them disappear. A suggested 15-year transition period in which the provisions gradually come into effect may limit political difficulties but will reduce even the limited benefits of the deal — estimated to add 0.01 to 0.02 per cent to UK national income. The Australian deal is a prize for a government that valued an independent trade policy so much it was willing to put a border in the Irish Sea. It is also a reminder that the most important negotiations are those that happen at home.


Leave A Reply

Your email address will not be published.