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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