How do we make trade policy in Britain? How should we?

Abstract

Since Brexit the UK has been responsible for its own trade policymaking rather than inputting into the collective policy of the European Union. This paper starts by sketching how that policy has been developed and implemented and how it is turning out. Overall, it is not very complimentary about the UK Government’s efforts and so it then moves on to consider how we might do better. One dimension of this is how trade policy could be made more inclusive in formulation. I propose three (sets of) institutional reforms: increasing Parliamentary (and other) scrutiny of the government’s trade policy plans; after examining how the UK public thinks about trade policy, it asks whether (how) one should take into account public attitudes to trade policy issues; finally it argues for creating an independent source of advice and analysis on trade policy. It concludes by noting that while recent history has been disappointing, trade policy by any government would be improved by the reforms recommended.

Since Brexit, the UK has been responsible for its own trade policymaking rather than inputting into the collective policy of the European Union. This paper starts by sketching how that policy has been developed and implemented and how it is turning out. Trade policy is complex – it covers many products, activities, countries and policy instruments, and it is necessarily spread over several parts of government. One perversity in the UK is that relations with the UK’s largest trading partner (the European Union) are handled in a different department from other trade policy.

Brexit has totally dominated UK trade policymaking since 2016. First, in the name of ‘Brexit opportunities’, the government sought trade agreements with many new partners; there have not been many and the hurry over those that were clinched led to rather unsatisfactory results. Second, trade (and other relations) with the EU proved difficult and resulted in a ‘hard Brexit’ which imposed many new barriers on UK-EU trade as the government sought to demonstrate the UK’s new sovereignty.

One characteristic of the period was an intolerance of opposition and of meaningful debate. The paper argues that some of the mistakes were the result of the absence of constraints on the executive (the UK Government), and it makes three sets of proposals for redressing the balance. In one sense, they reflect my frustration with poor governance in recent years, but the reforms would improve policy outcomes and public confidence in them even with the most competent and enlightened government in place.

The first area is to increase parliamentary (and other) scrutiny of the government’s trade policy plans. The current situation means that, for a mature economy and society, the UK has surprisingly little scrutiny over trade agreements. I propose, inter alia, putting parliamentary scrutiny on a statutory basis. This could oblige the government to keep the relevant committees informed of the progress of negotiations and give them time to examine and report on agreements before parliament has to ratify them; it could also give parliament the right to an affirmative vote on agreements. [At present parliament’s main right is to get 21 days to ratify a trade agreement after it has been presented to them, which occurs only after it has been signed by the government. If it fails to do so, the government can renew the request for ratification immediately.]

The second area starts a conversation about whether and how public views should be included in setting trade policy. It is based on some of the discussion in a series of Citizen Juries run by the CITP around Britain, reporting on two strong results. First, there was notable sympathy for supporting agriculture even at the expense of forgoing other economic gains and, relatedly, a suspicion that sophisticated service sectors and the southeast of England already get enough benefit from trade and that policy should aim more firmly at other regions.

Second, there was a widespread mistrust of government both as a conveyor of information and as a decision-maker. However, in the latter case, several jurists expressed a reluctant recognition that there was no one else to trust with decisions. There was very little support for the idea of formally involving the public in decision-making but a wish to be properly informed and to be heard. On information, great store was set on hearing from independent experts. I conclude, inter alia, that public consultation should be no more than advisory, but that the government should put much more emphasis on informing and hearing from the public, both to hear their concerns substantively and to start to win some trust that trade policy decisions reflect fair trade-offs between different interests.

My third recommendation is that the government should re-configure the Board of Trade to become a genuinely expert and representative advisor on trade, with the resources necessary to contribute meaningfully to national debate. It could conduct evaluations of trade policies and agreements, report on trade and trade policies once a year, and inform and liaise with stakeholders. It should report to government, but to keep its independence it must also have a formal role vis-à-vis parliament and a public profile.

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