Working together openly and competently will improve British trade prospects
Chile, 2018: Ministers from 11 countries gather to sign the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) | Alamy
4 min read
Rather than rerunning the Brexit debate, success depends on recognising our changed position and finding solutions
The United Kingdom was a global trade player prior to 2016 and still is today. Companies operating here make us the second largest global services exporter, with diverse strengths including finance, culture, education, sport, and broadcasting. We are also a manufacturing power in aerospace and defence, food and drink, high performance cars, and much besides.
This should be uncontroversial, but politics have meant otherwise. Brexit divisions are obvious, but equally, the global developed country trend now demands more manufacturing jobs. A government trade policy function with a seemingly single-minded, rather secretive, pursuit of Free Trade Agreements (FTAs) has not helped.
Our approach has to change, is a realisation growing in government. The majority of our trade is already covered by FTAs, and most of the remainder is with China or the United States. More importantly, they do little for services – the main 21st century trade barriers of differing regulations, or the largest emerging issue, namely the transition to the net zero economy.
Understanding what we want from other countries economically and for meeting other objectives, and what they seek from us, is a huge job. Arguably no policy is as sprawling as trade, with the subjects covered and often enshrined in treaty touching on every government department. Public procurement, intellectual property, agricultural tariffs, visas, animal welfare, consumer protections, what and how we regulate, border processes, this and much more form a part.
Fortunately, we start with the advantage of a relatively broad national consensus to balance open trade with conditions to ensure fairness. This should be the basis for a trade strategy that is essential to navigating a consistent path through the varied and often extremely complex trade-offs required in seeking growth consistent with other priorities, such as the net-zero transition.
Arguably no policy is as sprawling as trade
Signing and effectively implementing FTAs will be a part, though only incremental, given limitations and existing volumes of trade. We need to think more widely. Predictability for investors in regulatory and trade policy, greater focus on proximate markets than those more distant, and a strong tie to UK sectoral priorities are all crucial. Other important elements will be regulatory and sectoral agreements, such as on digital trade, resolution of market access issues through effective trade diplomacy, and unilateral actions such as a trade-facilitating approach to visas.
Most modern trade is not of end-products sold from one country to another, but arranged in sprawling regional and global supply chains. Facilitating UK presence in these, particularly for smaller companies, is a crucial challenge, not least given companies in neighbouring countries will often face fewer barriers. Rather than rerunning the Brexit debate, success depends on recognising our changed position and finding solutions.
Joint working between government, business, Parliament and other stakeholders is thus a crucial part of modern trade policy, as others such as New Zealand have realised. Secrecy was appropriate when tariff rates were the main issue, but the complexity of today’s issues requires a genuine partnership in a Team UK approach. Evidence from stakeholders, for example the Hilary Benn co-chaired UK Trade and Business Commission, suggests this is badly lacking.
A difficult context – particularly from global trade powers – adds to the challenges. In their own ways the US, European Union and China are challenging the rules-based system centred on the World Trade Organisation. Protecting it is crucial to UK trade interests, and we should work with other mid-sized powers on this.
Opportunity should also follow this turbulent context. A UK regaining a reputation for openness and stability will be attractive to companies. Rather than world-leading or declining, demonstrating competence and realism by building on our strengths should be the priority for Global Britain.
David Henig is Director of the UK Trade Policy Project at the European Centre for International Political Economy
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