Stephen Booth: Brexit-related concerns about a Biden presidency are overblown. The reality is more nuanced.

12 Nov

Stephen Booth is a policy analyst and political commentator.

Much of the media commentary in recent days has suggested a potential Biden Presidency will create short-term diplomatic problems for the UK. From this viewpoint, the prospect of a Biden White House in January 2021 – pending the resolution of the US election process and President Trump’s legal battles – heralds a diminishing of London’s standing in Washington and therefore increases the pressure on the UK to accept the EU’s terms for a trade deal.

The reality is likely to be more nuanced and a Biden Presidency would also present opportunities for Britain to work closely with the US post-Brexit.

In certain EU capitals, a Biden win is seen as strengthening the EU’s leverage in the end game Brexit negotiations over the coming days. Asked whether Biden’s projected win would impact the Brexit talks, Simon Coveney, the Irish Foreign Minister, replied: “I think perhaps it does.” EU diplomats have been quoted as saying a Biden win would “put a squeeze” on the UK, as the prospect of a UK-US trade deal could slip down the agenda.

The risk is that Brussels overplays its hand. Past evidence would suggest that the current UK negotiating team is more likely to judge a potential UK-EU deal on its merits rather than on what the occupant of the White House might think. An independent trade policy was viewed by many Leave voters as a benefit of Brexit, but this is not the same as believing Brexit was contingent on a trade deal with the US, much as it might be nice to have.

From what little has emerged from the UK-EU talks in recent days, it appears that the EU remains unwilling to bend on fishing, confident that the prize of market access for other more economically significant sectors is more important to the UK. This still assumes the UK is not prepared to walk away on the point of principle – that Brexit means regaining sovereignty over UK waters – which this government appears willing to do, however reluctantly.

The EU is also confident it has Biden on its side in the row over the Internal Market Bill, which would enable ministers to override aspects of the Northern Ireland Protocol in the absence of a UK-EU settlement. Biden’s comments during the election campaign about a US trade deal being contingent on respect for the Good Friday Agreement (GFA) were significant, but ultimately, it’s not clear how much has changed on this score.

Indeed, the Government’s very argument is that the powers it is seeking are a necessary “safety net” in order to uphold the UK’s commitments under the GFA. And that it is the EU’s maximalist interpretation of the Protocol which threatens to undermine the GFA.

As I have written previously, a workable compromise on the implementation of the Northern Ireland Protocol is in both sides’ interests. This has been underlined this week with Northern Ireland’s First and Deputy First Ministers jointly writing to the EU describing the “unacceptable” and “real threat” to food supplies being shipped to Northern Irish supermarkets from Great Britain.

The cross-community plea from the DUP and Sinn Féin leaders for greater EU flexibility on the need for checks should illustrate to Dublin and Brussels that they cannot take consent for the Protocol for granted if it cannot be made to work for individuals and businesses in Northern Ireland.

Therefore, despite a large defeat in the House of Lords on the Bill, in the absence of a satisfactory UK-EU deal, there is every sign that the government plans to proceed with its current approach with the Internal Market Bill and forthcoming Finance Bill.

However, if there is UK-EU agreement on the implementation of the Protocol – eased by a wider UK-EU trade deal – the issue could be easily defused as there would be no need for the powers. If a solution is good enough for Dublin and Brussels, it will be good enough for Washington. If there is no deal, everyone will be in uncharted territory, including the US.

Meanwhile, Biden’s historical opposition to Brexit should not be discounted but does not mean it will determine his attitude to Britain now that Brexit is a reality. Following his congratulatory call with the Prime Minister, reportedly the first European leader he spoke to, Biden’s team stressed its desire to work with the UK on global issues such as security cooperation via NATO.

We also know that Biden shares the UK’s view that urgent global action on climate change is required. This presents an obvious opportunity, since the UK will host the 2021 United Nations climate summit, COP26.

Biden is certainly more pro-EU than Trump has been but it should be noted that President Obama arguably did as much as anyone to pivot the US’ focus and attention from the Atlantic to the Asia-Pacific. This reflected long-term global trends, which individual leaders can amplify or camouflage, but they cannot reverse.

Equally, international alliances are not zero-sum. A rejuvenation of US-EU relations does not have to come at the expense of the UK. Trump’s often combative relationship with the EU has risked forcing the UK to choose between Washington and Brussels when, ideally, it should have workable relations with both.

A US-UK trade deal may well slip down the short-term agenda under Biden but would remain doable. Bilateral trade agreements would not necessarily be his immediate priority, since domestic matters are more pressing. However, post-Brexit, a close UK-US relationship, including deepening the trade relationship, still makes strategic and geopolitical sense, whoever the occupant of the White House.

The UK is a major European power and a top-ranking middle power globally. Nevertheless, the UK might need to be prepared to think more creatively about strengthening US-UK ties. A Biden administration might prioritise large multilateral agreements, such as the Common and Progressive Agreement on Trans-Pacific Partnership (CPTPP), which the UK also hopes to join.

Equally, some of the biggest domestic obstacles to a US-UK trade deal, or indeed UK accession to CPTPP, have not gone away. Improved access to the UK’s agricultural markets is a bipartisan interest in the US. The UK will need to be prepared to liberalise in this area if it wants to further its trade ambitions with US and other trade partners, including Australia and New Zealand.

The UK and the US continue to have many shared interests. And, ultimately, while personalities matter in international relations, interests matter more.

Stephen Booth: To reach a best in class trade deal with New Zealand and Australia, we must liberalise on agriculture

1 Oct

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

While the Brexit negotiations with the European Union have grabbed the headlines, the Department for International Trade has been quietly working away at the UK’s trading relationships with non-EU countries. Much of the work to date has been relatively uncontentious and therefore largely passes under the political radar.

In part, this is because the trade deals concluded to date have focused on securing and maintaining existing market access provided for by EU trade agreements, the UK’s access to which falls away at the end of the Brexit transition period on January 1. For example, the recent successful conclusion of UK trade negotiations with Japan built upon an existing EU-Japan agreement. While the UK and Japan were able to go further in some important areas, such as digital services and visas for business travel, the EU-Japan deal provided the template for much of the agreement on goods and tariffs.

However, the UK is also prioritising its negotiations with the United States, Australia and New Zealand. A trade agreement with the US presents the bigger immediate economic prize, but the negotiations with Australia and New Zealand are nonetheless strategically important. They are not only essential stepping stones towards the UK’s medium-term objective of joining the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) – a trade bloc of 11 countries around the Pacific rim and the third largest in the world. They are also like-minded countries with which the UK can hope to influence others.

The negotiations with Australia and New Zealand should be simpler than those with the US but all three negotiations are truly novel, requiring the UK to break new ground. As a consequence, trade policy is likely to move up the political agenda as the Government seeks to manage the competing interests an independent UK trade policy inevitably needs to reconcile.

For example, last week, the House of Lords amended the Agriculture Bill to stipulate that any agricultural imports must “match or exceed” the UK’s own welfare and production standards. The amendment is supported by industry-led and celebrity-backed campaigns, urging MPs to “save our standards”, and the Bill is expected to return to the Commons later this month.

Of course, maintaining and promoting high standards is a legitimate aim and an important objective for UK policy. However, as we leave the EU’s regulatory system, we need to balance these objectives against the way the world outside the EU operates in practice. Not only might trade partners accuse the UK of using standards as a cloak for protectionism. As the National Food Strategy’s recent report argued, we cannot realistically expect to unilaterally force our standards on others at the same time as we are seeking trade agreements with them.

The crux of the trade negotiations with both Australia and New Zealand is likely to be the extent to which the UK is prepared to liberalise on agriculture in return for a high-quality agreement on trade in services, data and investment. The UK should use these negotiations to push for the best in class FTA on these issues, going further than the commitments contained in the CPTPP because, ultimately, if the UK joins the CPTPP, it will have access to these benefits anyway. Australia and New Zealand are both supportive of the UK’s bid to join and, like the UK, view the bilateral negotiations as important staging posts.

60 per cent of UK exports to Australia are already in services sectors and this could be boosted further by reducing barriers to professional and business services, such as the mutual recognition of qualifications, opening up procurement markets and liberalising visa regimes for business people. Both Australia and New Zealand have requirements on inward investment that are higher than the UK’s and higher than the OECD average. The UK will be looking to reduce some of these requirements in order to ease firms’ ability to invest in those economies as a base for exports into the Asia-Pacific region.

In return, both countries expect the UK to offer greater market access for their agriculture exports. Both countries traditionally seek complete tariff elimination in their FTAs. This is unrealistic, given that the UK is largely maintaining the EU’s tariffs on agriculture products. Nevertheless, the UK will have to be prepared to offer tariff reductions.

The Japanese experience of negotiating with Australia and on its accession to the CPTPP could serve as a model. Japan, which had a highly protected agricultural sector, has undergone tariff liberalisation as part of those agreements, but in some of the most sensitive sectors tariffs have been maintained and reductions have been phased in over 10, 15 and even 20 years.

The issue of standards ought to be less contentious with these markets. The RSPCA notes that New Zealand’s farm standards “have been judged higher than the UK”. Nevertheless, it is worth noting that Australia and New Zealand take a different approach to the EU when it comes to standards. Both joined the US in its complaint against the EU’s ban on hormone-treated beef.

George Brandis, Australia’s High Commissioner to the UK, said recently that “the intellectual argument for free trade in some quarters of the British political establishment is an argument that still needs to be fought and won.” It is true that the UK has much to learn and much to gain from cooperating with both countries on trade policy.

Both have undertaken radical programmes of unilateral trade liberalisation (Australia from the 1970s and New Zealand from the 1980s). Both countries have also liberalised further via networks of trade agreements. Australia’s FTAs with Chile, China, Malaysia, Singapore, Thailand and the US provide for duty-free and quota-free access for all their goods into the Australian market.

As a result, both countries have successfully combined the diversification of their exports while delivering benefits to consumers by lowering tariffs on imports. Just as importantly, both countries have used the moral and political capital earned from unilateral reforms to place themselves at the forefront of global initiatives to promote free trade.

New Zealand is a founding member of the Digital Economy Partnership Agreement (DEPA), together with like-minded Chile and Singapore, which is at the cutting-edge of innovation in digital trade. It was with these countries that New Zealand initiated the process that ultimately led to the CPTPP. Meanwhile, Australia is the joint leader of the 23-party negotiations on the Trade in Services Agreement at the World Trade Organisation.

If the UK wishes to be at the forefront of the argument for global free trade, this is the sort of company it should be keeping.

Richard Holden: Three opportunities that open for us in an Australian trade deal

20 Jul

Maddisons Coffee Shop, Front Street, Consett

On Saturday, I did my sixth “Lockdown Litterpick”, around the beautiful Bollihope Common. A group of us bagged up five bin bags full of cans, bottles, pizza boxes and the general detritus that had been dumped in one the most beautiful spots in my constituency.

While chatting to my Association Chairman as the rubbish was collected, one of the volunteers revealed that she had emigrated from Canada to marry a Brit almost 40 years ago. Later that afternoon, I spoke with an old friend who had worked with me when I was a Special Adviser, before getting married and returning ‘down under’ to work for the Australian Government.

And later that afternoon still, on my way to my constituency office, I listened with interest to Times Radio as one of their correspondents gave an update on the New Zealand election – where the newly-elected National Party leader, Judith Collins, seems to be clipping the wings of Jacinda Ardern in an election that had until a couple of weeks ago looked as though it was shaping up to be a Labour landslide.

I mention these things because they to remind us that the ties that bind the United Kingdom with Canada, Australia and especially New Zealand are incredibly strong. Yes, they’re linguistic and historic, but they’re also based on families and friendships, and shared mature democratic systems of government underpinned by the rule of law.

As has been seen in recent years in both Australia and the United Kingdom, our Parliaments are more powerful than their premiers and the people aren’t afraid of switching out either if they’re not getting what they want. While Britain has spent the last few decades concerned over and trying to reform the nature of our relationship with the EU (which in 1980 made up 30 per cent of global GDP, but has shrunk to just under 15 per cent today) our CANZUK allies have been reaching out into the world.

I am very aware of how much with the grain some of these thoughts are in traditional conservative circles. But it’s increasingly clear to me that the opportunities presented by closer bonds with our Commonwealth allies are not some nostalgic pipe dream, but instead absolutely central to our future global ambitions, as well as the fillip our post-Coronavirus economy will need.

Our trade deal with Australia looks a though it might be one of the most comprehensive of the ones currently on the table, and there are three aspects of it that I’d like to flag.

First, Australia currently has a 20 per cent tariff on imports of luxury cars. Like the UK, the country is also right-hand drive. With our Range Rovers, Aston Martins and other top marques, surely this must be top target for negotiations.

Second, we’re much more understanding of Australians who want to come and work in the UK than the other way around. As we end our open borders with the EU and look at our Australian-style points-based immigration system, more mutual measures with our cousins in this regard must be a basis of future agreements.

Finally, Canada, Australia and New Zealand are all very developed service sector economies, but even our biggest companies are dwarfed by those of our American cousins. By opening our services sectors up to each other, we’ll drive competition, lower prices, increase productivity and, crucially, enable the formation of global firms with the diversity and reach across the globe.

That’s not to mention the new security integrations between our counties as the power structures of the globe tip towards the Pacific more generally and in which Canada, New Zealand and Australia all have a massive stake. We should be looking to leverage our foreign, defence and international assistance policies more generally on these security and international arrangements, as well as looking to build closer ties with an old ally of manufacturing in the North East of England – Japan.

China’s recent actions towards Hong Kong, the Pacific island nations, the South China Sea and, domestically, to its ethnic minority populations should give us all pause for thought. At the forefront of the minds of our allies across Asia and the Pacific is Chinese outward expansionism, control and internal repression

For Britain, out into the world is our call now. The tectonic plates of geo-politics have shifted to the Pacific; away from Europe to the wider globe. The world, not just the continent, is where Britain is at home. Now we’ve got to make the most of the opportunities on our global doorstep – and that starts with building our relationships with our old allies facing a new world on the Pacific rim.

Stephen Booth: Joining the CPTPP is how this country can show it’s serious about being “Global Britain”

9 Jul

Stephen Booth is Head of the Britain in the World Project at Policy Exchange.

Last week, the Prime Minister announced that in the wake of the pandemic the Government will “double down on levelling up”. It is clear that the domestic political agenda will be driven by this overriding social and economic objective, not to mention electoral imperative, as the country emerges from the Covid-19 crisis.

However, the UK also needs a narrative for its new place in the world, which promotes our interests and frames how we would like to be viewed by others. The question is not so much what Global Britain should “stand for”: the rules-based international system, open markets, defence of human rights and the rule of law. The question is by what means does the UK continue to further its interests and values in the new post-Brexit, post-corona world and how best do we resource ourselves to do so.

Ultimately, medium-sized powers will struggle to achieve their global ambitions on their own: the UK must invest in deepening its networks of alliances and building new relationships to form effective coalitions. And in that regard, next year will be an important one for UK diplomacy.

The UK’s exit from the Brexit transition period on January 1, 2021 will coincide with the UK taking on the annual presidency of the G7 and hosting the delayed UN climate summit, COP26. The UK has placed itself at the forefront of the ambition to build a “greener and more resilient global economy.” Meanwhile, the pandemic has also delayed to next year the World Trade Organisation (WTO) ministerial conference, the organisation’s topmost decision-making body that usually meets every two years.

Trade is the area of UK international engagement most transformed by Brexit, since 2021 marks the point at which full responsibility for trade policy returns to the UK. Brexit also emphasises the need for the UK to recalibrate its relationships with the world’s three major economic and geopolitical hubs – North America, Asia-Pacific, and Europe.

The pandemic has resulted in a steep decline in global trade when protectionism is already on the rise, fuelled by increasing US-China tensions that look set to continue. The current crisis has understandably prompted calls for greater national resilience.

Strategic stockpiling for a limited array of products may be part of the solution. But the UK’s wider interest is served by counting on security and diversity of supply chains. The UK must also seek to influence the terms of trade in services, data and the new technologies, where our comparative advantage increasingly lies. This requires international rules and willing allies to uphold them.

Multilateral efforts at the WTO would be best, but these have faltered in recent years. The Government is therefore embarking on an ambitious strategy of concluding free trade agreements covering 80 per cent of UK trade within the next three years.

As we know, negotiations with the European Union are in a critical phase and while the prospect of a deal before the end of the year looks more promising, it is not guaranteed. Talks with the US have begun and any conclusion will now have to wait until after the Presidential election later this year. The UK may be able to make swifter progress with Asia-Pacific economies.

The top priority is securing a successor agreement with Japan, as the existing EU-Japan deal will cease to apply to the UK in January. Japan is keen to move quickly on a bespoke agreement. The UK has also officially opened negotiations with Australia and New Zealand.

All of these agreements, and a Japan deal in particular, would provide trade benefits in their own right but the bigger strategic prize is UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The CPTPP is the third largest trade area in the world and has been signed by 11 countries around the Pacific rim, including Japan, Canada, Australia, New Zealand and Singapore.

Last week, Policy Exchange held a webinar with a stellar cast to discuss the UK’s accession to CPTPP. It was surely significant that Liz Truss, Trade Secretary in this “Get Brexit Done” government, and Lord Mandelson, an arch-Remainer, both stressed the strategic value of the UK joining.

Truss made it clear that she sees CPTPP as “part of a broader strategy of the UK becoming a central hub in a network of free trade agreements, a networked Britain if you like rather than a fortress Britain.” Lord Mandelson emphasised that the process may take time but “the UK aligning itself with a Pacific Rim agenda of this kind is a good thing.”

Chan Chun Sing, the current Singaporean Trade Minister, stressed how keen he would be to see the UK join, while Tony Abbott, the former Australian Prime Minister, noted that joining “would be the best possible sign that Britain really does want to be a global country again.”

Joining CPTPP will not be without its challenges. Stephen Harper, the former Canadian Prime Minister, noted that “[j]oining a plurilateral trade agreement is not frankly going to be a matter of a lot of negotiation. The others are largely going to have a take it or leave it approach.” He added, “You can seek tailor-made provisions, but that will add time to what will be a long process”.

Nevertheless, the prize would be hugely strategically significant. Grouping together with like-minded nations would provide the UK with a new platform to promote global trade liberalisation and multilateral reform.

It would enable the UK to join others in addressing China’s global rise from a greater position of collective strength. Indeed, this was an original objective of the project. Although potentially a long process, UK accession might help to convince the US to join the agreement, following President Trump’s decision to pull out of the precursor Trans-Pacific Partnership.

As Harper noted, Britain joining would offer some significant advantages to the existing members. “This would go from being a purely regional pact to now being the beginning of an alternative global order,” he said.

It might be tempting to view “Global Britain” as a distraction or diversion from pressing domestic issues. However, it is a necessary compliment to levelling up. Global Britain does not just mean reaching out to other countries, it means enabling more of the country to benefit from and compete in a globalised world. Moving forward with the CPTPP would demonstrate that the UK is serious about furthering both of these goals.