A UK Trade Strategy: What the ‘experts’ think

At a recent event, in which there was discussion of the new UK Government’s approach to its forthcoming trade strategy, one commentator suggested that it would not be that difficult to write down on a piece of paper the top five to ten things that should be included.

On the back of that, we asked our own trade team at Sussex (20 respondents) to put down what their five priorities would be. We also ran a public poll over a two-week period to elicit as many responses as we could from those interested in trade. We had 30 external respondents to the poll, 85% of which indicated that they were either very well informed or quite informed about trade issues. So, with a bit of hand-waving, these two polls can just about be said to represent the view of ‘experts’.

Each respondent was asked to list their top five priorities and the answers ranged from one-word answers to short sentences. Note that some responses covered more than one issue, for instance, “digital trade and human rights”. In these cases, each of the constituent categories was included. The chart below gives the share of responses (as opposed to respondents) which identified the priority listed. The chart lists the top ten issues identified by our public poll. For comparative purposes, the chart also gives the results of our internal poll. There is a strong correlation between the two sets of results - although the Sussex team saw both climate change and economic security as slightly higher priorities, and food / agriculture and trade administration as lower priorities.

There are several features of these results which are striking:

First, the overwhelming priority in both polls was to improve economic and trade relations with the EU. This came in different flavours with some wanting the UK to rejoin the EU single market, or Customs Union or both, while others focussed on specific elements be this a veterinary agreement, labour mobility or standards/regulations. The share of respondents who identified this as one of their top priorities was just under 50%. The remaining issues have somewhat similar response rates to each other give or take a few percentage points.

The second most important group of issues is subsumed under the category ‘growth and competitiveness’. This includes all policy areas that are related to improving the economic performance of the UK economy. Given, first, that the primary aim of trade policy and agreements is economic and second that increasingly the focus in trade policy is on additional objectives, this is perhaps reassuring.

Third, we see the importance of international partnerships, which covers all those responses that were concerned with how the UK collaborates with other countries outside of signing formal, binding agreements such as free trade agreements. This reflects the recognition of the challenges in contemporary trade policymaking as well as the need for the UK to work with other countries in meeting these challenges. Note that this category does not include mentions of the World Trade Organization (WTO) – more on this later.

There is a range of concerns with what was referred to above as ‘additional objectives’. This includes economic security, inclusiveness (be this across people or regions), climate, and the environment. Each of these four categories figure in the top ten priorities. I wish I could have run this poll ten years ago, as I wonder how many of these, if any, would have figured in experts’ priorities back then. It is clear that these are important issues which should be addressed in the UK’s trade strategy. Note, that we have separated out climate and the environment here, though there is potentially considerable overlap. The term environment could capture concerns regarding climate change, but equally could reflect a concern with biodiversity or deforestation. As this was not always clear from the response they are treated separately.

The final two categories of interest are ‘trade policymaking’ and ‘trade administration’. The former refers to the process of making trade policy in the UK, i.e. who is involved, how much scrutiny there is, the quality of impact assessment etc. This was considered the seventh most important priority by the public poll. Trade administration refers to the bureaucracy surrounding trade including customs procedures, etc. This issue came across very strongly in our recent roundtable held with the CBI on policies to support exports and competitiveness, where it was described as the need to get the plumbing right. Sometimes the policies that have the most impact are those that deal with the practicalities of getting a good or service from A to B.

The preceding discussion focuses on the categories/issues that made it into the top ten priorities. Yet, what is also interesting about these polls is what did not make it into the top ten. There are two conspicuous absences. First, ‘free trade agreements’ is not seen as a top ten priority. This does not mean it was not mentioned, but it was only 13th in the list of priorities. Remember, this was the previous government’s principal focus in its (largely non-articulated) trade policy. The current government has indicated a desire to continue with free trade agreements but has not made these a centrepiece of its strategy (as far as we know). This would be consistent with this poll.

Conspicuous too is the absence of the role of the WTO as an important priority. The post-Second World War trading system was built on the foundations of a rules-based system, with the WTO as the current incarnation of that. Yet, the WTO came close to last on our list of priorities. Many have commentated for some time about the crisis in the WTO, the decline of the WTO, and the undermining of the WTO in different ways by different states, ranging from the US to China, as well as India. The apparent only slight relevance of the WTO in this poll is striking, and if it is a strong reflection of the lack of relevance of the rules-based international system, then it is deeply worrying. But then, with the election of President-elect Mr Trump, we probably should be a lot more worried than a month ago.

So, if anybody in Government is reading this piece, I hope at a minimum this is interesting, but more than that – although these results are not based on a representative poll – they are highly indicative, I strongly recommend they are taken seriously. As the commentator I mentioned in the beginning said – perhaps it is not that difficult to identify key priorities. It will be a lot harder to put them into action.