In the immediate aftermath of the vote to leave the EU, several political figures such as Boris Johnson, Liam Fox, Jacob Rees-Mogg and Nigel Farage were constantly on TV boasting that countries would be lining up to agree trade deals with UK now we were free of the hindrance of the EU?
Fox trumpeted about deals that were already in the bag – until the media latched on to the fact that they were ‘rollover deals’ from our EU membership.
Johnson’s much-vaunted ‘oven-ready’ deal with the USA never got off the ground. The UK was, as Barack Obama had predicted, at “the back of the queue”.
Trade deals with Australia and New Zealand, agreed by Liz Truss (then the trade secretary), had British farmers going on TV to say how bad they were, even before the ink was dry!
Sweet-talking came to naught
Tory secretary of state for international trade Kemi Badenoch tried to open talks with the USA and flew to there for meetings that yielded nothing. She tried shmoozing the tough US trade negotiator Katherine Tai in London, but that got nowhere, so she resorted to striking pretty worthless ‘mini trade deals’ with individual US states.
The UK applied to join, and eventually joined, the 12-country Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which Johnson and the Brexit-loving media said would provide a trade bonanza – but not yet, it won’t.
The Financial Times put it in a nutshell recently, saying, “It is reasonable to see trade policy as the biggest failure of Brexit. It’s the story of successive governments not wanting to hear that deals don’t come easily, that you need to prioritise by country and sector, offer things to get something in return, and focus on implementation”.
The challenge to repair the Brexit trade deal
Labour now has the unenviable task of trying to improve the ‘botched’ Brexit trade deal.
TUC general secretary Paul Nowak recently issued a joint statement with the European TUC, saying:
“It’s time for a common sense trade deal that works for workers and business in the UK and EU. After years of muddling through, we need a new approach that honours the referendum result while giving us a much-needed closer trading relationship with EU.
“With an increasingly volatile and unpredictable global economy, it’s more important than ever that we secure our trading relationship with our closest neighbours.”
The elusive US trade agreement
As for the prize of a US trade deal – a day is a very long time in Trumpworld. Trump’s change of heart and muddle-headedness over tariffs (with those whom the USA has agreements) is, as a figure in the US auto sector says, “like a monkey at a keyboard”.
Government updates indicate that the number of trade agreements listed has been revised from ’70+’ to ‘39’, with 73 partners, reflecting that some agreements encompass multiple countries.
The EU and India say they hope to finalise a free-trade agreement this year – but Johnson and Sunak fell foul of their promise of ‘getting it done by Diwali’.
India will be seeking major concessions from the UK, including more employment opportunities for Indian workers in the digitech and fintech sectors, as well as upping the number of Indian students having access to UK universities.
Global trade – the allies and the obstacles
It remains to be seen when talks with Japan, which have been ongoing since 2020, will be finalised. The Tories had hoped to secure trade deals with South Korea, Switzerland, Canada (the current deal with Canada is essentially a rollover of the EU’s CETA deal), Mexico, the Gulf Co-operation Council, and Israel.
But Labour should expect opposition from UK unions, especially those with strong international links. The TUC has opposed trade deals with Israel, South Korea, the Gulf Co-operation Council, India and Türkiye.
Rosa Crawford, the TUC’s international trade and UK-EU relations policy officer, said of these countries: “As trading partners, they don’t respect workers’ rights, so trade deals with them threatens good jobs in the UK by making it easier for countries to dump goods made through exploited labour in our markets.”
Labour’s strategy for growth and workers’ rights
Winning new trade agreements is central to Labour’s drive for growth. However, how will we fare, with the UK’s Business and Trade department facing staff cuts of ‘up to 40%’?
The FT reported that leaked documents suggested “two units involved in promoting the UK as an investment destination” will be merged, and that there are plans for job cuts in export promotion teams. “We’ve been told it will mean reduced capacity overall, and no expansion of headcount or services”, said the director of one UK regional trade promotion body.
A seat at the table is a must for trade unions
Labour must guarantee trade unions a seat at the negotiating table. Acceptance of trade deals with weak or no workers’ rights clauses and a commitment to uphold International Labour Organization (ILO) conventions on labour and human rights are crucial to avoid falling out with Labour’s most steadfast backers.
According to Rosa Crawford of the TUC, “The most important trading relationship is with the EU. They are the only trading partner we have that respects high standards of workers’ rights, and we have a valuable opportunity to influence this with the UK-EU summit coming up on 19 May”.
Labour faces a tough road ahead to repair the trade missteps of Brexit. In the face of global competition and trade union concerns, success will depend on a balanced approach that strengthens economic ties yet protects employees’ rights. The upcoming summit provides a good opportunity to do this and make up lost ground.
