How can new trade deals work best?

Paul Goodman, writing for Conservative Home, discusses Policy Exchange’s recent event about Britain’s post-Brexit trade strategy.

The article can be viewed on Conservative Home by clicking here or read below.

Against a backdrop of world unrest, how our new Government will handle the challenges and opportunities arising from the recent referendum’s result remains undetermined. Some of the most pressing questions relate to what Brexit means for British trade. Should we find a way to stay in the Single Market? How could we best profit from the advantages of going it alone? To which non-EU countries should we be looking for inspiration? Who should be our closest partners? How could we guarantee their interest? With a nascent international trade ministry, and an urgent need to ensure economic stability through a new generation of commerce arrangements, many have been wondering: how should Britain negotiate trade deals post-Brexit?

Policy Exchange’s seminar yesterday How should Britain negotiate trade deals post Brexit?  – starring a panel composed of three leading Commonwealth experts on trade – was quick off the mark in answering the relevant questions.  At a lunchtime event tasked with addressing this, Australians and New Zealanders not only confirmed that countries such as theirs were eager to forge trade alliances, but also argued persuasively that there were blueprints ready for adaption, and that the adoption of those could place Britain in a stronger position than ever.

The economist, trade negotiator, and former Australian Ambassador to China and the World Trade Organisation, Dr Geoff Raby, admitted that the UK faced the ‘unknown unknowns’ of an ‘immensely complicated’ task. But our trading ‘dance card’ was ‘likely to fill quickly’, and – as we know from this weekend’s news – Australia has ‘already offered its hand’. Although being well prepared to establish bilateral deals is essential, however, he reminded us that it is ‘legally unclear’ when Britain (while it remains a member of the EU) can enter official negotiations with individual countries. Schedules must be settled with the EU and the WTO before we can embark on these ‘unchartered waters’. Moreover, Brussels has led European trade policy for the past half century, and – as Raby emphasised – Britain will have to invest in even more highly-skilled negotiators and experts than we might think, not least because the trade deals we will be seeking will be both new and simultaneous.

Some have called for Britain to pursue a ‘delete and replace’ conglomerate arrangement with the WTO, but Raby pointed out that = with almost 200 countries’ agreement required, some of whom might see the EU as a ‘bigger prize’ than the UK – the necessary ‘broad support’ might be hard to attain. Bi- and plurilateral deals seem vital to Britain’s success, therefore. And ‘clarity of purpose’ and ‘Government cohesion’ are key here, Raby asserted, together with a need to begin with top ‘quality’ agreements to ‘set the bar high’. While attaining an accord with US must be a priority, that will expend a vast amount of resources, he suggested; deals with medium-sized countries that have prior experience of FTAs (such as Canada, South Korea and Australia) should resolutely be sought, therefore – alongside those with smaller, but similarly-experienced, countries (such as New Zealand, Chile, and Singapore). It will also be important to take countries’ geopolitical goals into account, as well as their track records in negotiation: India can be ‘difficult’; Japan will be keen.

Alexander Downer, the Australian High Commissioner and former Australian foreign minister, concurred on a preference for high-quality alliances over ‘symbolic’ or ‘quick dirty deals’, and stressed that the UK should enter the field as an ‘open and liberal economy’. Both men contended that EU-style ‘protectionism’ and a desire for ‘political bolt-ons’ – demands regarding human rights standards, for instance –  would be unhelpful, and were typical decelerators of trade negotiations. The ‘template’ wasn’t the problem, Raby added – rather, the ‘devil is always in the detail’. For historic reasons, and the benefit of similar outlooks, therefore, Commonwealth countries would make excellent trading partners for Britain; developing countries, which were less ‘like-minded’, might prove more tricky.

Sir Lockwood Smith, the New Zealand High Commissioner and a former international trade minister himself, concluded the event by reiterating Raby’s point about purpose. Agreements that lack clarity, or were insufficiently comprehensive, would be ‘worse than none at all’; good agreements offered ‘building blocks to a wider strategic approach’. This was Britain’s opportunity to ‘position itself globally’: we should ‘get out there to run the race and win it’.

A useful discussion: more of them are needed in due course to allay risk-ridden uncertainty, and to propose advantageous solutions to our new Government.


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