Future UK trade policy: protecting vested interests or delivering for consumers?
Gail Orton, Director, Government Affairs
| Tate & Lyle Sugars
When the UK repatriates its trade policy, will it protect vested interests or deliver for consumers, asks Gail Orton.
As the UK formulates its own trade policy, questions are rightly being asked about how we improve upon existing arrangements and ensure consumers are prioritised in the midst of protectionist voices. We have followed closely the EU’s trade policy and free trade agreement (FTA) negotiations with third countries. There are three elements of the EU system that the UK will be able to improve upon: the pace of negotiations, giving a more prominent role to consumers, and handling the politics of trade policy.
The EU process for negotiating FTAs is painfully slow. The EU negotiates on behalf of its member states which means that not only is the European Commission negotiating with a third party, it is also managing an internal process among 28 EU countries. The preparations and negotiations themselves take time (three to four years sometimes), but the ratification process then adds 18 months to two years before the benefits of the deals can be felt. A recent example is the EU’s agreement with South Africa. A modest volume of raw cane sugar was included in the agreement reached in 2014, but it was not until November 2017 that the first shipment of sugar arrived from Durban at our jetty in east London. Given the very tangible benefits of improved trading relations, the UK will want to establish a process that allows it to move quickly, both in terms of the negotiations themselves but also in terms of ratification.
As the saying goes, ‘the squeaky wheel gets the oil’. In trade negotiations, it tends to be the loudest voices that obtain the concessions, regardless of their economic weight. In the EU, there is a strong protectionist movement when it comes to free trade negotiations. The talks with South Africa were a prime example. By far the loudest voices were those seeking to protect the EU market from imports of agricultural products. But this ignores the potential benefits that more open markets will bring to you and me as consumers in terms of choice and competition. Nowhere is this more striking than in the food and drink sector where tariffs very clearly do not benefit consumers. The European Commission has no formal process for capturing the economic benefits to EU citizens as a whole as it focuses on balancing the vested interests of its different stakeholders. There is a lesson for the UK in that. The Trade Bill and the Taxation (Cross-border Trade) Bill will set out the role MPs will play in this area. While there will frequently be constituency interests to protect or promote, how will MPs take account of the broader consumer benefits?
Finally, when the UK repatriates trade policy it will also repatriate the politics of trade. We had a flavour of that in relation to the now stalled EU-US Transatlantic Trade and Investment Partnership (TTIP) where the potential impact on the NHS became the focus of debate in the UK. Reading the commentary, it was difficult to identify any potential benefits from what would have been the largest bilateral trade deal in history. It will be critical for the UK to better involve the public and explain the benefits of the trade policy it is pursuing. One immediate upside of Brexit is that we are collectively learning how our country is governed, where our food comes from, the impact of tariffs, how we trade with third countries. If that learning process can continue, we will all benefit. There will always be vested interests and those pursuing their own goals, but the better informed we all are, the easier it will be to identify them.
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