Negotiations have begun on a trade deal between UK and the Gulf Cooperation Council (GCC), a loose alliance compromising the rich autocratic states of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (UAE). When signed and sealed, the deal will no doubt be heralded as a triumph of Britain’s negotiation skills and a vindication of Brexit, which allows the UK to regain its ‘sovereignty’ in making our own trade deals.
Contrary to such claims, our power as a world trader has been diminished since Brexit, as early moves in the UK/GCC negotiations show. In addition, this deal will require the UK to turn a blind eye to human rights, workers’ and environmental abuses.
The UK has shot itself in the foot on trade deals
Since Brexit, the UK has negotiated its own trade deals, which have been slight adaptations of the existing EU deals with third countries. These have been tweaked and are known as ‘roll-overs’. Since its inception, the EU, in cooperation with member states, negotiated framework deals with third parties. Within these frameworks it was up to the individual member states to exploit these deals to the advantage of their own traders.
In trade, size matters. What other countries want in return for concessions is access to the single market of their prospective partner. This was a point grasped and presented most persuasively by Margaret Thatcher in her Mansion House speech of April 1988, when she sang the praises of the European single market:
“Just think for a moment what a prospect that is. A single market without borders…giving you direct and unhindered access to the purchasing power of over 300 million…on your doorstop…It’s not a dream. It’s not a vision. It’s not a bureaucrat’s plan. It’s for real.”
Britain’s attraction as a destination inside the EU was not just Britain’s own market of 60 million but the access to the EU’s 500 million potential consumers. After Brexit, at a stroke, our bargaining power outside the EU was dramatically reduced, and the world knows it. Alone, the UK’s market can only offer sixty million, quite a reduction bargaining power.
Our poor hand is visible to all
The Brexiters are desperate to show Brexit is a success, and the world knows. The former Kiwi prime minister, the admirable Jacinda Ardern, said she was amazed how favourable the UK/NZ deal was to New Zealand. The vaunted deal with the USA, which, even by the government’s own best estimates might boost the UK economy by 0.16%, has still not materialised, despite the hapless Theresa May’s toe-curling appearances with Trump.
The negotiators of the GCC have certainly noticed all this. Rather than as a supplicant, they have arrived with a threat. Dr Thani bin Ahmed Al Zeyoudi, trade minister of the UAE, has warned the UK to remain silent on human rights in the Middle East if it wants trade. The UK must “tone down provisions for workers’ rights, if they want more market access and business opportunities”.
We have lost our hard-earned position on the moral high ground
It took a long struggle to get the EU to accept the notion that human and social rights had a place in trade agreements. ’Human rights’ in trade are still trumped by the consideration of profit and the power of the other partner. It is much easier to demand respect for human rights in say, Myanmar, than to demand human rights in a deal with China.
However, progress on human and social rights conditionality in trade has achieved considerable success in the EU. Basically, this means the domestic situation of the partner is taken into account. For example, if the country is suppressing workers’ rights as a way of increasing their competitive edge, this is unfair trade, as well as a moral issue.
The international trade unions movement has long argued that suppressing workers’ rights is ‘unfair’ trade. China is the supreme example; much of its international competitiveness is based on low wages and conditions tantamount to slave labour. Like China, the UAE does not allow independent trade unions.
The EU finally conceded to pressure from the European parliament and the lobbying of the international trade unions and NGOs, and from the mid-1980s onwards all EU trade agreements have included social rights conditionality. International Labour Office (ILO) core standards which include “Freedom of association and the effective right to collective bargaining” and “abolition of slave labour” are used as a yardstick. The ILO principles also include “the right to a safe and healthy workplace”.
Further, the EU has a mechanism for scrutiny of trade deals and the European parliament has the right to ratify and monitor the implementation of the trade deals.
We now have to look the other way when rights are abused
Conditions for workers, almost entirely migrant labour, are shocking in the GCC countries. The spotlight shone by the world cup on Qatar laid such abuses open to a wider audience and wider concern is growing over Gulf states ‘sports-washing’ their human rights record.
Shadow trade secretary Nick Thomas-Symonds says under Labour human and social rights will be ‘embedded’ in trade deals, but he offers no clue as to how.
Unlike many other parliaments, the House of Commons has no rights to scrutinise or ratify trade agreements, there is also no mechanism for civil society or unions to be consulted on trade as there is in other democracies.
Far from trading our way to a brave new world, Brexiters are opening the door for grubby and shameful deals.