This post is by former MEP Michael Hindley. He is now trade policy adviser to the European Economic and Social Committee (EESC).
Consideration of the UK’s trading relations post Brexit has brought trade policy issues into the spotlight, and particularly trade policy formation, as never before.
Free trade is the one colour the Brexiteers have nailed to their mast. Their gamble to launch a bright new world for the UK outside the EU is predicated on making a success of an independent trade policy.
First, a general point: free trade, as practised since the 1990s, has not delivered, and more of the same is not the answer. The cliché of the 1990s that ‘a rising tide raises all ships’ has been proven, beyond doubt, to be illusory. The EU’s own trade strategy reviews acknowledge, with understatement, that the benefits of trade have not been widely shared.
No UK mechanism exists
The UK has not negotiated trade agreements for over 40 years. Practically, this deficit is going to be rapidly filled by consultants hired at great cost. But, equal to this lack of negotiation experience, if not more important in the long run, is that the UK government has no mechanism for formulating, implementing or monitoring trade policy.
Other countries and the EU itself have worked to make their own trade policies accountable and transparent. We now need to open up the debate in the UK to ask: how should we trade?
Recent government statements indicate that trade policy will be kept a closed esoteric area in the hands of the executive. Labour maintains a sphinx like silence, as on other areas of Brexit policy.
The prime question is, who will issue the mandate on which future bilateral trade negotiations take place? Presumably, it will be the trade secretary, but that mandate must be made available to parliament so that a relevant committee can follow the negotiations. There is a good case for that mandate being made public.
Structures can be established which allow representatives of stakeholders – for example, unions, business, civil society – to follow the negotiations. Negotiators should report regularly to a parliamentary committee and, most importantly, the final agreement must be subject to parliamentary approval by vote.
All trade deals made by the EU make reference to the UN’s sustainable development goals (SDGs). The EU’s agreements all make reference to environmental protection, social and human rights conditionality.
SDGs (Sustainable Development Goals) have become the ‘apple pie and motherhood’ of present trade talks. Who could possibly be against them? But the issue is not actually the signing up to such commitments but the monitoring, implementation and assessment of them.
Civil society should have oversight
And who should do the monitoring? The European Economic and Social Committee (EESC) has called for civil society to be involved in monitoring EU trade deals. The same call should be made in any future UK bilateral agreements.
Signing up to international standards is one thing, but the implementation is another matter. It is futile to ask the developing countries we trade with to implement standards when they do not have the human resources to do so. This is a great opportunity to supply the technical aid for implementing the standards which advanced economies demand.
Assessment is the final part of the equation. What happens if a partner fails to meet its SDG commitments? All trade agreements are time limited and there should be a final evaluation of the agreement before any renewal. Again, this should be subject not only to parliamentary scrutiny but also to stakeholders like the TUC, CBI and NGOs.
WTO needs monitoring, too
Multilaterally, the UK will continue to act under the auspices of the World Trade Organisation (WTO) which, for all its limitations, is preferable to a free for all. The rules of trade should be internationally agreed and disputes should be first avoided by trade diplomacy or settled by arbitration, and definitely not resolved through aggressive litigation.
Any future bilateral trade deals will have to be WTO compatible, so it is vital that parliament monitors actions at the WTO. A workable precedent exists. The European Parliament receives an annual report on EU Commission actions at the WTO which can form the basis of parliamentary questions and debates. This WTO report is a public document which allows access to all interested parties.
Finally, we must revive the idea of a role for UN in world economics, particularly in its trade policy arm, UNCTAD, which is a rich but sadly sidelined source of trade analysis and recommendations.
Trade matters and trade under sustainable conditions matters. But democratic trade policy formulation, scrutiny and evaluation need to be on the agenda, too.
[Image: MSC Shuba B by Robert Orr from Flickr Creative Commons]