08 July 2024

ECIPE's Henig: Early reflections of a new UK trade policy approach – tensions to be resolved, narrative created

New UK Secretary of State for Business and Trade Jonathan Reynolds seems to have received that memo. His expressed priorities described before the election were smaller more targeted deals and focus on implementation within the context of a trade strategy.

Many years ago, a veteran trade commentator welcomed me to a field he said was endlessly fascinating but in which nothing actually happened. In further discussion that turned out to mean trade deals that could have significant economic impact such as those at multilateral level or between the USA and EU never happened, and anything that could be agreed didn’t actually make much difference. While completely cynical, there’s a truth within it that becomes ever more visible.

Now imagine that you don’t know much about trade policy and have just watched the last eight years in the UK in which promises of world-leading buccaneering became cries of betrayal. A certain amount of caution to those suggesting this as a source of significant growth is understandable. Learning from my cynical friend may have been wise, and perhaps the new Prime Minister did so.

Keir Starmer, the UK’s new Prime Minister, appears never to have given a speech on trade. From his Shadow Cabinet, the only two individuals who didn’t get full jobs in the transition to government happen to be the two who once shadowed the Department for International Trade. Early indications suggest a man in a hurry to deliver changes to people’s everyday lives, and a feeling trade policy doesn’t offer too much. That instinct isn’t wrong since we’ve long known that the benefits of trade involve painful trade-offs, and in modern politics that is becoming increasingly difficult

This isn’t just about the new government or the UK. A long-time advisor to Conservative governments admitted to me that of late there was a move towards aligning with EU regulations as long as it was kept quiet. New Free Trade Agreements have become almost a protected species in the US and EU. If you were a diligent delivery focused Prime Minister who wanted to minimise political difficulty, how much involvement would you really want? Particularly if you saw what happened with the UK-Australia FTA that so quickly became seen as a vote-loser.

New UK Secretary of State for Business and Trade Jonathan Reynolds seems to have received that memo. His expressed priorities described before the election were smaller more targeted deals and focus on implementation within the context of a trade strategy. Embracing the idea of an independent Board of Trade was to provide a factual basis for difficult trade-offs, while more openness would reduce stakeholder grumbles at secrecy....

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