Inclusivity in trade policy? It's all about process

Trade policy is highly complex. Beyond big words such as ‘free trade’ or ‘protectionism’, trade policy in practice is about thousands, if not millions of small choices, of diverging rules between trading partners that create trade barriers, and what we should do with them.

The complexity of policy and the sheer range of trade barriers businesses contend with on a daily basis can be seen in the US’s annual report on trade barriers: 500 pages of trade barriers ranging from government procurement rules to food safety or geographical indications, to tariffs and quotas. Every country will have its own trade policy and come to different decisions regarding the barriers that are acceptable, desirable or even necessary. Which barriers are considered necessary, which are problematic, and why, depends fundamentally on who is asking that question and who is answering. This makes the who of trade policy (who gets to decide, who implements, who is consulted) as important as the what (what policy objectives? What answers to major policy trade-offs? What outcomes?).

Our work at Queen’s University Belfast under the umbrella of the new CITP will thus focus on this “who” of trade policy-making, on whether UK trade policy-making is inclusive and how to make it more so.

Brexit has created a unique opportunity to debate trade policy in the UK. After decades of EU membership, UK trade policy is no longer set in Brussels. But with such repatriation of power comes great responsibility. Now that the UK has ‘taken back control’, and is setting out its own trade policy, UK decision-makers need to seriously consider inclusivity in the very making of trade policy. While inclusivity is a good principle for governance in itself, it is especially key for trade policy which can lead to deep popular backlash and lack of confidence from the greater public (e.g. concerns about food standards, data protection or more broadly the impact of trade liberalization commitments on public services, etc.).

For us, a good starting point in building an inclusive trade policy in the UK means actions on the following four different dimensions.

First, to be inclusive, UK trade policy needs to consider the impact on different parts of the UK – including the devolved administrations. For example, while agriculture policy is devolved the sector may be significantly impacted by the outcome of UK trade deals, as seen in the recent media coverage on the potential impact of the UK-Australia deal on Welsh farmers. Taking impacts into consideration, listening to voices from different regions and nations, is easier said than done. There is no one-size-fits-all model for balancing the differing interests within a country with that of the country’s interests as a whole. Ensuring that UK trade policy formulation is underpinned by decision-making processes that give a meaningful role to devolved administrations would help ensure policies that better represent the interests and preferences of the UK’s constituent parts.

Second, and beyond territorial politics, broad-based engagement for inclusive trade policy-making means reaching out to business, trade unions and civil society. Trade policy is about trade-offs – some sectors will win greater access, or better prices, and others will suffer. How the benefits of trade are shared, and the costs (at least partly) compensated for needs to be part of the discussion on trade policy. Greater inclusiveness and transparency in trade policy-making and trade negotiations is therefore needed to ensure that the interests and concerns of those that are most likely to be affected by trade policy choices are heard and to hold those making the choices accountable.

Third, a critical location for such a debate is Parliament. This means Parliament needs a proper role in trade policy-making, and in the scrutiny of trade agreements, and should not simply be involved with ratification. Whether such involvement includes all parliaments and assemblies in the four administrations or is limited to Westminster, having broad debates on trade policy in general, as well as trade agreements, would be beneficial in the long run. Trade agreements can take a long time to negotiate and are infrequently changed once agreed – ensuring that each trade agreement has cross-party support makes them more likely to stick, ensures greater credibility for UK negotiators, greater certainty for businesses and greater buy-in from the electorate.

Finally, even if negotiating trade deals can take much longer than governments may like, the impacts of these deals, both good and bad, will take time to be felt. An inclusive trade policy here needs to be reactive to the impact on the ground of policy. This requires both establishing means to measure the impact of trade (which our colleagues in CITP will do), but also developing a suite of policy instruments to respond to them.

UK trade policy finds itself at a critical juncture.  Post-Brexit, the priority has been to accelerate the process of negotiating and concluding new trade agreements. This approach is understandable in that it is, in part, intended to compensate for the loss of unfettered access to the EU single market and preferential market access under EU trade agreements. However, in this rush to set up an autonomous trade policy and to demonstrate the capacity of the UK to sign (any) new trade agreements, the UK must not lose sight of arguably a much bigger prize: the opportunity to carefully consider and design decision-making processes that lead to a more a coherent and truly inclusive trade policy, taking into account the interests and needs of the entire UK. All of this feeds into a much broader and fundamental debate about the constitutional status and political relevance of devolved administrations within the UK. Eschewing an inclusive approach may lead to very unpopular and divisive policies that further fuel instability and conflict between the four UK administrations at a challenging time for the Union.