Good UK trade policy should start at home



The trade agreement concluded in principle between Great Britain and Australia will establish the basis for the independent trade policy of the United Kingdom. It will be the first deal – excluding the post-Brexit deal with the EU – that does not replace a treaty the UK has benefited from as a member of the bloc. The arrangements will therefore establish a framework for further trade negotiations, showing what the UK is prepared to give to achieve its goals. Equally important, however, is the unfortunate precedent it sets in the management of the country’s trade policy.

The 2016 referendum on the UK’s accession to the EU demonstrated not only resentment over the economic effects of globalization, but also its struggles against political legitimacy. The British, said David Cameron when he announced in 2013 that he would call for an in-out referendum, had “seen treaty after treaty change the balance between member states and the EU.” And note that they never had a say. Yet this latest chapter in British trade policy is being written again behind closed doors.

There has been little parliamentary scrutiny of the Australia trade deal or attention given to interested parties. The most controversial aspect is its impact on farmers who fear facing competition over prices and standards from Australian producers on an industrial scale while being asked to absorb the costs of the green transition. Many Conservative backbenchers, as well as those from opposition parties, agree. Even cabinet members would be divided, with the Department of International Trade on one side and the Department of Environment, Food and Rural Affairs on the other.

It is the norm in the UK, and indeed in many other countries, for the executive to have a free hand in international negotiations. The making of treaties in Britain is a “prerogative power”, or a power exercised by the government on behalf of the Queen; no parliamentary approval is required. Treaties must be ratified but cannot be changed. Even if parliament rejects a treaty, it only starts the clock again; the government can submit it several times to parliamentary assent.

Prime Minister Boris Johnson has agreed on the main lines of the deal with his Scottish salmon and Welsh lamb counterpart, but decentralized administrations have no say. Not being responsible for its content, the Scottish National Party will have an interest in raising fear over the impact of the deal on Scottish farmers. The Northern Irish protocol, agreed with the EU as part of the Withdrawal Agreement, will mean trade deals will not fully apply to the province.

There is a balance to be found. Negotiations require a country to present a united front and speak with one voice. Yet parliamentary buy-in as well as improved transparency and broader political support are essential for the deals to come to fruition. The Swiss government has struck a deal with the EU to improve relations with the bloc, but domestic critics have separated it. In the UK’s Brexit negotiations, the lack of national consensus on what the future relationship should look like has been the biggest obstacle to reaching a deal.

Suppressing disagreements will not make them go away. A suggested 15-year transition period during which the arrangements gradually come into force may limit political difficulties but will even reduce the limited benefits of the deal – estimated to add 0.01 to 0.02 percent to UK national income . The Australian deal is a prize for a government that valued independent trade policy so much that it was prepared to put a border in the Irish Sea. It is also a reminder that the most important negotiations are those that take place at home.

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