11 December 2019
In the lead up to the General Election, we have analysed the manifestos of the five main political parties and what they imply for future UK trade.
Overall, we find that the manifestos in this General Election are incoherent and vague on trade and contain several unachievable targets.
A Conservative manifesto pledge to end the transition period by the end of next year is extremely unlikely.
Moreover, the feasibility of signing a Free Trade Agreement (FTA) with the EU by the end of 2020 is extremely unlikely and is dependent on to what extent the UK is willing to accept the EU position on matters such as fisheries and level playing field provisions.
In addition, the feasibility of signing FTAs with third countries covering 80% of trade within three years is unrealistic. If the UK manages to sign a deal with the EU, that still leaves about 30% of trade to be covered so that means FTAs with another 12 countries or more and that is almost certainly not going to happen within the timeframe.
Meanwhile, Labour’s pledge to renegotiate a new Brexit Deal within three months and hold a second referendum within six would also be very difficult to achieve.
The party’s plans to renegotiate the Withdrawal Agreement within three months and then putting it to the country in a second referendum in six months is ambitious – especially if complicated by coalition negotiations with the SNP.
Furthermore, the Labour manifesto states there will be joint UK-EU trade deals, but it’s not clear what that would mean. It might be possible for the UK and EU to agree on a consultation arrangement where the UK gets some input into EU trade negotiations but it’s very unlikely the UK would get a seat at the table or any veto, so the proposed deal would certainly limit the UK’s policy space in what it could negotiate in its own FTAs.
The Green Party’s ambitions for major subsidies to incentivise industry to cut emissions and farming to take up more environmental practices are also contentious.
The Green New Deal includes subsidies to help firms to decarbonise and for farming to shift to a more environmentally fair and functioning agricultural on policy. The key question to this is how it will all sit with EU rules on state aid and competition, it’s very hard to see how this will work in tandem with EU policy.
On the Brexit Party contract with the people, the party’s objective to sign a Free Trade Agreement with the EU by summer 2020 is even more ambitious than the Conservative Party and therefore even more unlikely if the agreement were to have any significant content.
The Northern Ireland border has been a significant problem for the governments of both Theresa May and Boris Johnson but to the Brexit Party this is not a problem. They argue that Northern Ireland and the Republic already have different currencies and different tax systems and have been fine until now so they don’t see why exit from the EU will require a hard border. If it’s the EU that wants to keep the Good Friday Agreement intact, the Brexit Party argues, it is up to the EU to offer the concessions and exceptions for Northern Ireland. This is extremely worrying.
It seems that the Liberal Democrats’ acceptance of the status quo approach to trade policy making has a “missed trick” in not challenging the current lack of consultation and informed debate about trade policy.
If we are to stay in the EU it would be heathy for us and healthy for the union to have a broader discussion on trade beyond just the sectorial interests of the banks looking after banking trade and the textile producers looking after the textile industry.
Analysis of the five main parties’ manifestos and what they imply for future UK trade was presented at Chatham House on 4th December 2019.
Video: Watch the full discussion of ‘what party manifestos in the 2019 General Election imply for future UK trade‘.
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The impact of rules of origin requirements on key currently integrated manufacturing supply chains and resulting loss of frictionless trade benefits should have been highlighted.
A Conservative FTA will increase both tariff
and non-tariff barriers across these industries with consequent output and employment losses, concentrated in Brexit-voting areas.