LONDON — Britain is trying to negotiate post-Brexit trade deals that normally take years in under 12 months — and businesses and unions worry it’s setting itself up for a fall.
Last year Britain raced to maintain its trade relationships, rolling over 63 deals it was already party to as a member of the EU. Now it’s in a “sprint” to land a deal with Australia before the G7 summit in June. Talks on that one started less than a year ago.
At the same time, Britain is “intensifying” negotiations with New Zealand and juggling preparations to join an 11-nation trade bloc — all while lining up talks with India and several others for later this year.
The speed of negotiations and the number of deals underway have companies, labor groups, and experts looking on with a mixture of skepticism and concern. The deals, they say, need to be negotiated carefully so they stand the test of time, and don’t come back to bite Britain.
“There is now more than a hint of desperation as Boris [Johnson] and his ambitious Trade Secretary Liz Truss scramble to demonstrate that there is a post Brexit dividend,” Mike Rann, Australia’s former high commissioner to the U.K., told POLITICO.
Rann said Britain is still “struggling with post-Brexit terms negotiated” by Johnson in the EU exit deal, and warns “farmers and unions will want more than the trappings of substance in new trade deals.”
Ad-hoc or thin consultation on the EU deal, and the fact bodies meant to scrutinize new trade deals have either not been set up or allowed to see the full text, doesn’t bode well, those POLITICO spoke to said.
‘Take your time’
In the past week alone, farmers across the U.K. have warned provisions in Britain’s much-hoped-for deal with Australia will set a precedent for other negotiations that could decimate their industry in the long run.
Striking the right balance in trade is essential, these groups argue, to avoid a political backlash further down the road. But balancing is hard when you’re in a hurry.
“From our perspective, it’s take your time, get it right,” said a senior member of Britain’s business community. Like upcoming reforms at the World Trade Organization, they explained, “you’re not gonna be doing it twice.”
It is essential, they said, that the U.K. “don’t rush through” negotiations and “therefore weaken our negotiation positions too far.” They called Truss’ plan to get an agreement in principle with Australia before the G7 summit in June “an ambitious timeframe.”
Similar deals usually take at least a couple of years or more to thrash out. A big concern among British businesses, said another senior business leader, is that the U.K. is “just rushing to try and do these trade deals because of the political importance of doing trade deals.”
It’s “unhelpful,” they said, that the government continues to put time limits on negotiations. In January, a Truss ally told the Sun a deal with New Zealand would be done by Easter. That date has long since passed. Hurrying to get trade deals over the line, the person said, “is more likely to lead to bad deals than good deals.”
Apart from Australia and New Zealand, negotiations to join the 11-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are about to start. If that wasn’t enough, the trade department launched public consultations Tuesday for negotiations with India this fall. Talks for new deals with Canada and Mexico (two CPTPP nations) are also launching this year, and a deal with a six-nation bloc in the Middle East is “in the pipeline.” A deal with Israel has been floated and there are plans brewing for South America.
Businesses are keeping an eye on “just the sheer number of trade deals that are ongoing at the moment,” said the first business leader, noting the agenda is already “a lot of work.” Part of their hesitation is about capacity, they said, explaining “a lot of resources have shifted towards looking at India” and doing a trade deal there.
Public consultation is also key to strike balanced deals backed by voters, argue both business groups and organized labor. The speed the government is negotiating at when it doesn’t have the “machinery in place for consultation,” said Rosa Crawford, trade policy officer at the Trades Union Congress (TUC), “means it’s likely they’re going to ram these deals through.”
“What is driving this haste?” Crawford asks. “It just feels like it is for the symbolism” of getting a deal outside the EU, she said, rather than asking “is this worth having? or are there negative aspects of having it in place?”
Consultation with trade unions, employers and other civil society groups needs to be comprehensive to score the right agreements, she argues. Hasty negotiations, she said, mean Britain has little time to use “its leverage to insist on respect for human rights or labor rights.”
A spokesperson for the Department for International Trade said that “as the International Trade Secretary has clearly stated, we will not sacrifice quality for speed” and insisted that any deal would be “fair and balanced, work for producers and consumers and be in the best interests of the whole of the UK.”
The Trump warning
Deals can boomerang politically if they don’t strike a balance, experts say. The perceived failure of trade pacts to benefit workers was a key message Donald Trump used in his 2016 U.S. election campaign. A review of Trump’s public statements from January 2016 up to his election on November 8 shows he mentioned NAFTA at least 531 times, calling it the “worst economic deal in the history of our country” that either destroyed jobs or sent them overseas. He called the Trans-Pacific Partnership “a disaster” and warned it would do the same — eventually killing the deal during his first days in office.
Trump was able to leverage public backlash to tank the TPP deal, said Chris Southworth, secretary-general of the International Chamber of Commerce UK. The backlash seen from British farmers against the deal with Australia is a prime example of “what it looks like in practice when you don’t get it right,” Southworth added.
If British farmers and fishermen get sacrificed without robust governance, consultation and more transparency around the deals “all that does is riles everyone up and creates more division and anger,” Southworth argued. This is “really unhelpful when you’re trying to get deals done,” he added, “because people remember that and when the next deal comes around it will be twice as hard.” Other nations, he said, are also looking on and expect the same market access.
Southworth warned that the trade department’s current consultation forums mean “no one is seeing any substantial text in the trade negotiation drafts,” putting business and other groups “at a significant disadvantage compared with competitors who are seeing [the] text.”
The government argues its scrutiny arrangements for deals are robust, transparent and as strong as in other parliamentary democracies. It argues it conducted ample economic scoping assessments of its deal with Australia and laid out its negotiating objectives ahead of talks.
“British business wants a good, long-term trade deal, not one that just looks good on the day of a jingoistic ‘Britain is back’ announcement,” said former Australian High Commissioner Rann. The government’s “desperate rush” to agree on a deal, he said, “should make business rush to the fine print, or even better, to see that fine print before a deal is signed.”
This article is part of POLITICO’s premium policy service Pro Trade. From transatlantic trade wars to the U.K.’s future trading relationship with the EU and rest of the world, Pro Trade gives you the insight you need to plan your next move. Email [email protected] for a complimentary trial.