Now we’re out of that honeymoon period

Creating an independent trade policy was a major selling point of Brexit – but now the rubber is coming off the road.
Forget the flag-waving Instagram post – post-Brexit Britain’s business dreams are coming back down to earth.

The country’s high-profile deals with Australia and New Zealand are facing fresh scrutiny for their impact on farmers, and the UK’s top trade official – once a darling of the far-right Conservative – came under extraordinary attack from a senior Tory .

It comes as slower-than-expected progress on a long-awaited trade deal with India, a deal with the US still in limbo, and hopes fading that the UK will join a major Pacific trade bloc this year Will be able to
The days of optimistic deadlines, quick wins and colorful social media production by business secretaries are fading into a distant memory.
“There has been a honeymoon period for British business,” said David Hennig, director of the European Center for International Political Economy. “We’re out of that honeymoon period now, and things are getting a lot more difficult.”

While the finer details of UK deals attract mainstream attention, the politics of UK independent free trade policy really involve: winners and losers, disputes and interdepartmental wrangling.

trade-offs require trade-offs
Creating an independent trade policy was one of the main selling points for leaving the EU.

The UK quickly got down to business, creating a dedicated Department for International Trade (DIT) from scratch, recruiting a highly regarded trade expert such as Kiwi Crawford Falconer to form a negotiating team and negotiate with Commonwealth partners. helped get started.

In record time, the UK scrapped many of its deals as a member of the European Union, then made free trade deals from the outset, first with Australia, then with New Zealand, as it races to present a Brexit dividend.

Amidst the headlines, however, were signs of unrest in British agriculture over the terms of the deals, which provide for the phasing out of tariffs on beef and lamb meat and quotas on what nations can send to Britain. UK farmers, who believe the government has liberalized unnecessarily so far, fear an influx of cheap produce with little profit in return.

The UK insists that the deals’ built-in safeguards provide protection, while others dispute the idea that the UK could be flooded with Australian and Kiwi meat, arguing that in trade, geography matters .

Yet this month, well-known tensions between the UK departments for Agriculture and Business were made public following an explosive intervention by the recently sacked former environment secretary, George Eustice.

In an extraordinary speech to the House of Commons, he described the Australian deal as “a really not very good trade deal for the UK”. Negotiators had, he said, been put “on the back” by then-Commerce Secretary Liz Truss, demanding that the terms of the deal be agreed before the G7 meeting in June 2021.

A former government minister said it is ‘surprising’ that the farming community has been ‘thrown under the bus’ in the process. The same person also fears the UK has set a precedent, with negotiating partners Mexico and Canada already demanding equal access to the UK agricultural market. “This has profound implications for trade deals in other parts of the world, which is why screwing Liz Truss is a fucking blow,” he said.

“[Eustice] is right that we took things too quickly,” Truss special adviser Ben Ramanuskas told the DIT, who added that his boss and Boris Johnson had agreed to deliver “a great photo opportunity and a great headline”. 7 deadline was set. To show that Britain can make trade deals again.

He said: “[setting] the deadline was a mistake. There has been a tendency in DITs to do this.

But Ramanuskas thinks Eustis got the substance wrong – and laments the lack of sophistication in the UK trade debate. “They see it as a zero-sum game. They see imports as a bad thing,” he said of Eustice and other critics. “I think imports are fantastic for the obvious reasons: lower prices for consumers and other businesses, more competition, thriving innovation.”

fast talk
Shankar Singham, a trade consultant and close advisor to several former DIT ministers, said experts share a common frustration with the “businesslike outlook” of people on FTAs. “In other words, it is all about exports, current producers, large existing producers and their interests,” he said, instead of considering other stakeholders such as consumers and future industries.

Trade policy expert Katherine Watson of consultancy Flint Global said striking a deal with a trade partner required agreement on both sides. “Yes, the UK probably rushed into the talks because of a self-imposed political deadline to achieve a post-Brexit victory, but Australia and New Zealand had bargaining power beyond that,” she said, one of the UK’s leading Citing proposed membership, the Asia-Pacific trade bloc, of which Australia and New Zealand are members.

And James Manning, a former UK trade negotiator who worked on the Australia deal, argued that FTAs ​​are “always” the result of a negotiation, and “getting them across the line may require making concessions in sensitive areas”. Is.” “Given the importance of agricultural exports to Australia and New Zealand, it is difficult to see how these agreements would have come into force if the UK had not made market access commitments to these areas,” he added.

It is not just Eustice’s criticism of the Australia deal that has attracted attention. In scathing remarks, the former cabinet minister called on Faulkner, the DIT’s acting permanent secretary, to be ‘replaced by someone who understands British interests better than him’.

There is little sympathy for Eustice’s comments among UK business watchers, who argue that blame was wrongly assigned and was irrelevant, given Faulkner’s inability to respond as a civil servant. Singham said, “I hope [Eustice] finds some way to apologize because it was completely unfair,” adding that Falconer’s international reputation “couldn’t be any brighter.” Ramanuskas continued, “I thought his comments about Crawford were mean and misguided.” Another former DIT special advisor said that the responsibility ultimately lies with politicians, as “civil servants advise, ministers decide”.

A person close to Commerce Secretary Cami Badenoch said: “With more than 25 years of experience, Crawford is widely regarded as one of the world’s foremost experts on global free trade and does an exemplary job.”

Although many hold the charismatic Kiwi in high esteem, Eustice’s attack was very different from the reverence Falconer received from Tory MPs including the influential Brexiteer faction, the European Research Group, when he was first appointed to the DIT in 2017. “The party authority and the ERG at that time worshiped him as a kind of god,” said another former DIT special advisor.

And while there is no shortage of people who would defend Faulkner, others feel that attacks on officials are common in trade policy. “Fair or not, trade isn’t fair. Trade policy isn’t fair,” said Hennig, who noted that the UK’s former chief Brexit negotiator, Ollie Robbins, had received his share of criticism during the Brexit years. “Honestly, I think we’ll just have to get used to that stuff.”

On the friction between DEFRA and DIT, the experts also stress that the vacillation between trade policy and agriculture is typical of a free-trade nation – and show that the UK is now discovering how to really chart its own course. What does charting mean? “There is always tension in trade talks between agriculture ministries and trade ministries, but it is usually not resolved at the negotiating table,” Singham said.

However, the problem for some is that DIT is not ready for recent results. “The main criticism is that [Falconer] didn’t toughen up the department,” Hennig explained. “Trade. This is contentious territory, and the department doesn’t feel prepared for it. It feels a little complacent.”

A DIT spokesman said the department had ‘led the charge to show the UK’s strength as a free trading nation’.

He pointed out that the government has signed trade agreements with 71 countries as well as the European Union since 2016 and removed hundreds of trade barriers. “We don’t stop there,” said the spokesperson. “Our trade strategy aims to forge ambitious agreements with CPTPPs in India, the Gulf, Canada, Mexico, Israel and the Indo-Pacific, while ensuring that our agreements are reciprocal and in the best interests of the people and the British economy.

“brake”
Prime Minister Rishi Sunak, himself a critic of the UK’s earlier post-Brexit deals, has signaled a change in British trade policy. Choosing to prioritize depth over speed, Sunak avoided setting a time frame for the British negotiations, while his government is also considering reviewing Britain’s trade relationship with the European Union because of the pressure imposed by Brexit on businesses. Struggling with obstacles.

Locked in tough negotiations with notoriously difficult negotiating partners like India, and expected to navigate through a messy CPTPP Pacific bloc membership process, the UK is now through a more exclusive experience for the free-riding nation He is going.

It has raised hopes that Britain can finally have a mature discussion about what it really wants from its newfound independence – and face the realities of trade policy with it.

“Frankly, the level of interest in this has been negligible,” said a former government minister. “I hope people start paying attention to this. They really need it.”