15th November 2022
There is one way to get a “quick win” international trade deal.
That way is to just give in to what the other side want, but without gaining anything of equal value in return.
It really is quite easy.
All you have to do is turn up to the negotiation, ask what the other side’s negotiators want, give it to them, and – Hey Peston! – the United Kingdom has a trade agreement.
It is as easy as falling off a eucalyptus tree.
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This week in the House of Commons there was a debate on the Australian trade deal.
In that debate the former minister George Eustice said (and this should be read carefully):
“…the Australia trade deal is not actually a very good deal for the UK, which was not for lack of trying on my part.
“Indeed, as my right hon. Friend pointed out, there were things that we achieved, such as a special agricultural safeguard for years 10 to 15, staged liberalisation across the first decade and the protection of British sovereignty in sanitary and phytosanitary issues.
“It is no surprise that many of these areas were negotiated either exclusively or predominantly by the Department for Environment, Food and Rural Affairs on behalf of the UK team, but it has to be said that, overall, the truth of the matter is that the UK gave away far too much for far too little in return.”
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It gets worse:
“…we should not set arbitrary timescales for concluding negotiations.
“The UK went into this negotiation holding the strongest hand—holding all the best cards—but at some point in early summer 2021 the then Trade Secretary my right hon. Friend the Member for South West Norfolk (Elizabeth Truss) took a decision to set an arbitrary target to conclude heads of terms by the time of the G7 summit, and from that moment the UK was repeatedly on the back foot.
“In fact, at one point the then Trade Secretary asked her Australian opposite number what he would need in order to be able to conclude an agreement by the time of the G7.
“Of course, the Australian negotiator kindly set out the Australian terms, which eventually shaped the deal.”
Ooof.
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As regular readers of this blog will note, this idiotic approach to negotiations was pretty much also that adopted by the government of the United Kingdom with the withdrawal and relationship agreements with the European Union.
Instead of taking negotiations seriously, there were artificial deadlines imposed for domestic and media political consumption, regardless of the quality of the agreement.
In essence: the government of the United Kingdom did not and does not take international agreements seriously.
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Part of this lack of seriousness is down to faux-nostalgia.
The notion that because nearly two hundred years ago the United Kingdom could go around the world agreeing trade deals on its own terms.
The idea that, like some latter-day Richard Cobdens, we can pop across the channel and agree a free trade deal, and still be back for tea.
Indeed, the very phrase “international trade deals” is invoked and bandied about by supporters with Brexit with misty-eyed sentimentality.
Being able to enter into such agreements was, it was claimed, one of the advantages of Brexit.
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But.
International trade agreements are not creatures of sentiment.
International trade negotiations are perhaps the most hard-headed, unsentimental things one can imagine in the commercial world.
Indeed, international trade law is commercial law for grown-ups.
Any real benefits gained from such a deal are hard-negotiated and will come at a cost elsewhere.
And a benefit, in any case, may only have an overall marginal economic effect.
For forty-five years, the United Kingdom benefitted from the experience and expertise of the European Commission in negotiating trade deals, with the commission being able to deploy the clout of the single market and twenty-eight member states.
In this way, the commission were able to negotiate deals with mattered and were worth having.
That has now been thrown away, with the United Kingdom leaving the European Union’s common commercial policy and internal market.
What we have now have instead are bravado and bluster, and Elizabeth Truss asking what the other side want so that we simply can give it to them.
And we also have the moral hazard of Boris Johnson and David Frost agreeing to the Northern Irish Protocol and then saying we will renege on it.
We could not be in a less impressive place on the world stage.
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Yes, perhaps, Eustice should have resigned rather than go-along with what he knew to be a bad trade agreement with Australia.
Perhaps.
But it is a Good Thing that he has set out the real position now on the floor of the House of Commons.
The United Kingdom, in a post-Brexit world, is going to learn slowly and painfully that the superficial approach of Johnson and Truss to international agreements is disadvantageous.
Well, at least the limitations of this approach are becoming apparent.
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Isn’t part of the trouble here also that the Government refused to allow property scrutiny by Parliament before the damage was done?
I hope that the next Government will commit itself to a more open approach which recognizes that the views of others can actually be useful
And more than that, George Eustice made the important point that having a backstop of an additional layer of oversight can be a powerful card in any negotiation: “I’d love to give you that, but it would never get past the boss” will have a familiar sound to anyone who’s argued for more pay or resources at work, with the additional advantage with Commons scrutiny of being very possibly true.
It must have been a Tory educational initiative which used the “how not to” approach to improve future performance by demonstrating the inevitability of failure.
The UK is blessed to have such innovative thinkers. All we need now is some evidence that any lessons have been learned, to demonstrate it is a productive approach.
How on earth is this Government still in power – the amount of economic damage they have caused is mind-blowing. No debate allowed in Parliament – we are living in a kleptocracy and they have the brass neck to criticise Putin!
False nostalgia has been a key to the general support for Brexit, but surely it has not been particularly important with the badly negotiated trade deals. These have been due to the self-aggrandisement of the individuals involved who were playing to the Europhobic sentiments of the Conservative Party. The interests of the country were as nothing compared with this driving force.
Interesting. In more normal times this matter would have attracted a greater deal of publicity than it attracted earlier this week.
A few more facts that may be relevant. Eustice was sacked by Truss when she became PM. He was not appointed to a government post by Sunak. One might assume both a loyalty to Johnson and a chip on the shoulder, though a glance at his CV suggests he doesn’t find changing his mind too tricky.
I’m perfectly prepared to accept that negotiating trade deals is about as tough as negotiations can be. They are certainly very complex, which might or might not be the same thing. It’s absolutely the case that one side showing its time constraints to the other isn’t a good idea, as anyone used to negotiating in car showrooms will testify.
Those who voted for Truss to become our Leader might have learned from this trade deal debacle had it been more widely known at the time. One might also say that no-one in the majority party learned much from the rather similar debacle of the Brexit negotiations.
“How on earth is this Government still in power – the amount of economic damage they have caused is mind-blowing.”
They remain in power because the story the Right wing media provide to the public is rarely, if ever, on even casual nodding terms with the truth, Elizabeth.
Don’t forget the revelations from “allies” that Truss thought her Australian counterpart was inexperienced compared to her and he needed to show “he can play at this level”. And that Truss wanted to speed things up by “putting him in an uncomfortable chair”.
Actually, your own post from 21 April 2021 sums this up rather well.
If only Truss had focussed on the content of the trade deal rather than the promotional posturing…
In June 2021 Eustice said “ Australia is an important ally and this is a good agreement between us.”.
It now appears as if he was part of a team that was selling its own country down the river.
In Eustice’s defence he also said yesterday “…the final clause ….gives any UK Government ….an unbridled right to terminate and renegotiate the FTA at any time with just six months notice.”.
In footballing terms this is akin to passing the ball to your opponent in your own penalty area !
Sunak is unlikely to implement the clause immediately so PMQs should be very interesting.
Successful negotiations are neither a “zero sum” game nor a roll-over to get a quick “deal” which, like marriage in haste is frequently repented at leisure. It is a complex and involved process and requires a deep understanding of what both parties are trying to achieve and unegocentric, intelligent, pragmatic adult interlocutors who have been around the block once or twice; a commodity the Tories appear particularly short of. That the UK has subcontracted trade negotiations to the EU for a generation or more has not helped. But as ever with this administration ideology and political grandstanding has triumphed over reality.
Agree.
I feel, however that the subcontracting was a little more nuanced.
Many of the expert EU trade negotiators were British diplomats, just as many EU law makers were from these islands.
It was the behaviour of the last decade of government, especially that of Johnson which convinced them that their career was better furthered in the EU rather than back home.
Hence, as in all matters pertaining to this government, expert criticism is only from casually dismissed external sources, and then discovered to be correct in hindsight.
The crass laziness of the Johnson era contaminated everything. Who knew that not doing homework, failing to attend important meetings, posturing with a sense of entitlement amd consuming copious quantities of alcohol could lead to such poor outcomes? The nation certainly got what it voted for.
It appears that our electorate are easily taken in by political charlatans.
Is all hope lost?
“It appears that our electorate are easily taken in by political charlatans.
Is all hope lost?”
At least once a week I indulge my fantasy that George Soros (or someone else similarly motived and financially able – warts and all, Mr. Soros seems to me to be the most obvious candidate) buys the Sun, the Daily Mail or the Daily Express, and starts rebalancing the narrative: because – make no mistake – the Right wing client media, not the political charlatans are The Problem here, and only something along these lines will move things back in a more honest direction.
I recently heard an otherwise sensible government minister say in an interview that Brexit had allowed us to be “nimble” on decision making. I audibly groaned, as that’s just another extension of ministers not consulting or listening. Among the powers that we have retrieved from the EU’s central bodies there are very few where nimbleness is required or even sensible. That careful consultation and decision-making is a virtue, possibly boring too, but there’s no problem with that. Ministers flying by the seat of their pants and acting for purely political reasons, is most definitely not a virtue
Really enjoying the return of this sentiment: “The UK went into this negotiation holding the strongest hand—holding all the best cards”
So obvs we must ask if Mr Bun the Baker was still amongst them, or had we already played that one against the EU?