18 March 2022

EURACTIV: Rush for UK trade pacts risks having little benefit, lawmakers warn

UK lawmakers have warned that “there is no guarantee” that the new international trade agreements being negotiated by ministers “will deliver actual economic benefits”, in a new report

The report, by the influential House of Commons Public Accounts Committee, also complains about what it calls the Johnson government’s secrecy about the deals it is negotiating and the goals it wants to achieve with him.

The prospect of negotiating free trade deals with the United States and other economic powers was marketed by Brexit campaigners as one of the main potential benefits from leaving the EU, who argued that the UK would be able to obtain better terms than Brussels.

As of January 2022, 64% of UK trade was covered by FTAs including the UK’s Trade and Cooperation agreement with the EU which represents 47% of UK trade. The latest pact with New Zealand was concluded in February, and talks with India started at the start of the year.

The government has set a target of having 80% of UK trade being covered by free trade pacts.

However, talks on a trade deal with the United States, seen by Boris Johnson’s government as the main jewel, have stalled since the start of Joe Biden’s presidency. An agreement with the US would cover 16.8% of UK trade, and without it, the government will struggle to hit its 80% target.

UK Environment Secretary George Eustice conceded last year that a trade deal with Washington was “just not a priority for the US administration”.

There is also concern from some sectors, particularly UK farming, that the rush to agree trade pacts could come at their expense. For example, UK farmers have expressed concern that their own products could face competition from imported products including beef and lamb, resulting from the new agreements with Australia and New Zealand.

The government “is really struggling to point to tangible wins for British business, consumers or our own agriculture sector – even as the pandemic and energy price crises demonstrate the critical importance of robust trade arrangements,” said Geoffrey Clifton Brown, the deputy chairman of the committee.

He added that the government is “constrained by the deliberations and choices of our biggest trading partners”, describing this as “a problem of its own making, and for it to fix”.

In their recommendations, UK lawmakers said that the Department must “ensure that its approach to trade has coherence and that there is sufficient clarity about how government is making trade-offs across different policy areas, such as agriculture, the environment and human rights.”

They also emphasised the importance that the government “provides vital support to help businesses use the agreements, particularly for smaller businesses wanting to export worldwide.”

The programme for the coming year of the Department of International Trade, which was created after the 2016 referendum, also includes negotiations on existing agreements with Canada and Mexico, and to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

In the meantime, UK officials are also considering whether to apply to join the North American free-trade zone which encompasses the US, Canada and Mexico.

Joining the CPTPP and a deal with India will only contribute 0.4% and 1.5% respectively to the 80% target.

EURACTIV

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