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UK must recruit 'hundreds of negotiators' to reach quality trade deals

July 22, 2016 10:00 AM
By Alan Bullion
Dr Alan Bullion

Dr Alan Bullion: "The United Kingdom will have to employ hundreds of trade advisors and negotiators to successfully conclude post-Brexit bilateral trade deals over the next decade or so."

This should be combined with a commitment to quality trade deals, even if these take a bit longer than 'quick and dirty' agreements, experienced hands from Australia and New Zealand advised today (July 18) at a Policy Exchange event in London.

"The more I look at the post-Brexit outlook for the UK on trade deals under the World Trade Organisation, the more complicated it becomes," said Dr Geoff Raby, former Australian ambassador to China and the WTO.

Australia and New Zealand have already offered 'technical assistance' to the UK on negotiating trade deals. But while the UK can start these discussions now, nothing can be signed off until the UK has triggered Article 50 and formally left the EU, which could still take up to two years, with Scotland's first minister Nicola Sturgeon trying to delay the process.

Even so, in the meantime, "working out the UK's own relationship to the WTO schedules will be essential before bilateral and plurilateral progress," Raby advised. "And the sooner, the better these talks are commenced," he urged.

This will fall to the ministerial triumvirate of David Davis, Liam Fox, and Boris Johnson. It has now emerged that Fox will mainly be dealing with international aspects of world trade, such as with Australia and New Zealand, while Johnson will primarily be dealing with EU member states.

Changed world

But Raby explained that the world trading system had changed considerably since 1973, when the UK first joined the then EEC. Since then, the WTO was formed in 1995, with agriculture coming into the equation.

"Many trade deals are not as 'open' or 'free' as implied, and the UK has over forty years of catching up to do here," Raby observed.

It has been estimated that the UK will need at least 300 trade negotiators post-Brexit, but Australia alone has over 160 officials committed to trade issues full-time, with a further 30 just devoted to agriculture, another 30 on dumping and customs issues, and so on.

"Ironically, post Brexit, the UK trade area alone is likely to create more migrant labour for experienced lawyers and officials," Raby mused.

This has previously been emphasized by former UK deputy prime minister Nick Clegg's wife, lawyer Miriam González Durántez, who said that London has only 25 trade specialists, and needs at least 500 for the unit set up by senior civil servant Olly Robbins.

DSM units

The UK also needs to get to grips quickly with the WTO's system of dispute settlement mechanisms (DSMs) on anti-dumping issues, Raby recommended.

This will also require a further layer of dispute settlement advisers, he added. China and the US, for example, have whole teams of people working on these.

And the UK should also develop its own trade schedules with the WTO, to determine policies for tariff rate quotas, agricultural subsidies, and service, Raby said. Without these, for example, a bilateral trade between the UK and United States could not be concluded.

'EU Plus'

The likely scenario for the UK would seem to be an 'EU Plus' deal under the WTO for the UK, Raby said, but he conceded that agriculture was a "sensitive area", and while some more liberal WTO members might accept a de minimis 'cut and paste' scenario, other developing countries like India might raise more objections.

In the WTO ambit, the UK would have to deal with 162 other member states, as opposed to 27 in the EU. Even so, Raby thought that London could more easily conclude deals with similarly open economies, such as Australia, New Zealand, the US, Chile, China, Japan, South Korea and Singapore were also mentioned as strong possibilities, from the experience of Canberra and Wellington.

On the other hand, an Australia-China trade deal took 10 years, with agriculture being a key barrier to eventual entry into force, said Raby. "We could conclude similar deals with the UK, but beef and sheepmeat might be sticking issues for Australia and the UK, and dairy for New Zealand and the UK, for example," he observed. The more issues there are on the table, the longer a deal will eventually take.

Here the UK could have a competitive advantage though over the EU. "The inherent protectionism of the CAP is a barrier for Australia," Raby said, referring to much protracted negotiations. But with new UK environment secretary Andrea Leadsom taking a more liberal approach to farm subsidies, this could chime with Canberra and Washington.