In this article, which first appeared in the New Statesman 1 September 2016, David Martin fears the Tories’ ideological commitments will cloud the UK’s weaknesses in negotiating new trade deals and calls on Labour to set out its vision for a progressive trade policy.
For over forty years the UK trade relations have been forged in Brussels.
The magnet of access to a market of half a billion people has brought the world to the EU’s door. The EU has agreements or is negotiating deals with around two thirds of the world’s population. This has opened up previously closed or partially closed markets, creating and protecting millions of British jobs.
Following Brexit the UK will have to negotiate fresh deals to protect the preferential access we have to numerous markets across the globe. They will face two handicaps. Firstly, there is no expertise in Whitehall in negotiating trade deals and it will take years and a significant growth in staff for the UK to be in a position to negotiate on an even basis with other countries. Secondly, we are an important market of 60 million consumers but that is a fifth of the clout that the EU currently brings to the table.
My fear is that the Tories will use their ideological commitment to the free market as a short cut to overcome these weaknesses. Although not always successful as we would like, the EU pursues certain values in its trade agreements - the protection of labour rights, human rights, the environment and our public services and welfare state.
It is therefore absolutely essential that Labour sets out its vision for a progressive British trade policy - an effective opposition demands it. This are my priorities for Britain’s future trade relations with the world.
British trade deals must work for the many and not the few
Services represent 78 per cent of British GDP and employ almost 80 per cent of our workforce. This includes financial services, which employ around two million people across the UK. However, services are not covered anywhere near to the same extent as goods in free trade agreements (FTAs), even modern ones. This is something that will have to change in order for the most citizens as possible to gain from trade.
This is because many barriers to the trade in services are not tariffs, but more complex regulatory differences. We must remain vigilant that the process of bringing economies together leads to higher common standards, not a race to the bottom. In this way, cooperation can benefit businesses and their workers, and yet also improve and reinforce our international governance of systemic economic sectors, like banking. It is also imperative that trade deals do not impinge on a governments’ right to provide public services like education and health as it sees fit.
British trade deals must reinforce our values at home and abroad
Trade deals can be a positive force for social change in the world. Cross-border commerce must not be an excuse for us to export poor working conditions across the globe.
The UK is the world’s fifth largest economy and other countries will still want to do trade deals with us. However, judging by the behaviour of the Tory ministers in the EU Council and their MEPs, workers’ rights and provisions protecting the environment in trade deals are often seen as a hindrance rather than an opportunity. Instead, a Labour trade deal would set high enforceable standards for our partners - including, for example, the ratification of core International Labour Organisation (ILO) conventions, or measures aimed at protecting our forests and oceans from environmental degradation.
British trade deals should be transparent
Labour MEPs have been at the forefront of calls to open up the EU’s rather opaque negotiating procedures, and great strides have already been made. In order to properly engage with the policy process, citizens need to have the relevant information at their fingertips. The obvious urgency of Britain’s situation could be used as an excuse to keep the details in the dark. This is not acceptable - better policy-making requires input from civil society.
British trade deals must protect British steel and other manufacturing from unfair competition
As I wrote at the time, last year’s steel crisis was a bed that the Conservative government had made for itself. The EU’s efforts to update its trade defences against the unfair dumping of Chinese steel were continually thwarted by the UK government’s veto. In 2015 alone, 5,000 jobs were lost in this sector, and the Port Talbot plant is still struggling to find a buyer.
It is therefore absolutely crucial that British trade policy provides us with the necessary tools to protect our industry where there are clear cases of government subsidies by foreign governments. We don’t want a return to protectionism. What we want is a level playing field for British steel and other manufactured goods on the world market.
Leaving the European Union means sailing out into uncharted waters. On trade, the UK government will soon be on its own. There will be strong winds buffeting it towards a future of deregulation and cross-border casino capitalism. Labour should strive against this with all their might and offer a progressive alternative.