Frontier today hosted a seminar that discussed the multiple issues the UK needed to address as it engages in trade negotiations with the European Union and other major trading partners, including the United States.
The seminar was chaired by Gus O’Donnell, and the speakers were Professor Alan Winters ( UK Trade Policy Observatory at Sussex University), Dr. Emily Jones (Blavatnik School of Government) and Amar Breckenridge (Frontier Economics).
Modern trade negotiations are complex and create multiple interactions with regulation and public policy. Such deep agreements can generate better outcomes in terms of trade and investment flows. But their interplay with regulation and public policy means that their design needs to be carefully thought through so that they do infact contribute to higher living standards. The effects of trade-offs inherent in negotiations need to be carefully considered, especially when they have the potential to lead to an unequal distribution of the benefits of trade. Because of all these factors, it is important to have governance arrangements that ensure the proper scrutiny of negotiating processes and outcomes.
The speakers noted that the current trend in the UK was to reduce the role of parliamentary involvement in trade matters. This in part reflected the government’s view that trade negotiations, particularly with the EU, need to be done quickly. This approach is not necessarily to the UK’s advantage. From a bargaining perspective, negotiators can use the threat of parliamentary constraint in order to signal the limits to the concessions they are willing to grant to their counterparts. Whereas signalling that time is short might reduce negotiating leverage. From an economic perspective, allowing more time creates the space to ensure that a strategy on international trade is sufficiently developed and evidence-based, enabling government to identify priorities, and also the potential losers from trade reforms. It would also enable trade policy objectives to be better aligned with other important strategy areas, notably industrial strategy, and green growth, and the UK’s geopolitical positioning.
The speakers also emphasised the importance of broadening participation in trade policy formulation beyond parliament and government departments to include civil society, expert groups and industry. Experts, notably economists, needed more humility and needed to invest more effort in communicating their findings to the public.
Frontier Economics regularly undertakes research and analysis on international trade. It organised this event as part of its leadership of the Trade Knowledge Exchange, an initiative that also involves the UK Trade Policy Observatory and three other organisations.