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23 February 2024

Peter Holmes is a Fellow of the UK Trade Policy Observatory and Emeritus Reader in Economics at the University of Sussex Business School. Sunayana Sasmal is a Research Fellow in International Trade Law at the Observatory.

The World Trade Organization (WTO) dispute settlement system is in crisis. Here, and in a comprehensive working paper, we discuss one potential solution to one of the many issues confronting it. Non liquet is a legal principle that allows a tribunal to decline rendering a ruling when there is no law. We think this concept could partially address the major issue of judicial overreach. But first, some background.

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February 23rd, 2024

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16 February 2024

Michael Gasiorek is Director of the UK Trade Policy Observatory and Co-Director of the Centre for Inclusive Trade Policy. He is Professor of Economics at the University of Sussex Business School. Nicolo Tamberi is Research Fellow in Economics at the University of Sussex and Fellow of UKTPO.

HMRC has just published statistics for trade in goods for December 2023, giving us three years of data after the implementation of the Trade and Cooperation Agreement (TCA) with the EU in 2021. This blog reviews trends in UK trade with the world and the effects of the TCA on UK-EU trade.

There is good and bad news for UK trade in goods. Starting with the bitter pill, the UK’s trade in goods with the world has underperformed compared to other comparable countries over the last few years. Figure 1 shows the exports (panel a) and imports (panel b) of the UK, marked in red, and other OECD countries in blue, together with the series for the OECD total in dark blue. While during the period 2013-16, the UK was in line with the OECD total, the UK’s imports and exports started to slow down since the Brexit referendum in June 2016. For exports, the gap with the OECD total increased substantially with the Covid-19 pandemic. Imputing causation in this setting is not easy; most likely, the Brexit referendum, a slow recovery from the pandemic and the UK’s exit from the EU all contributed to the underperformance of UK trade. (more…)

February 15th, 2024

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4 January 2024
Guest author David Henig is Director of the UK Trade Policy Project at the European Centre for International Political Economy (ECIPE). He has written extensively on the development of UK Trade Policy post Brexit, in the context of developments in EU and global trade policy on which he also researches and writes.


There was relief for Europe’s automotive sector at the start of December when the UK and EU agreed to maintain current product specific rules of origin for electric vehicles within the Trade and Cooperation Agreement (TCA) until the end of 2026. A scheduled intermediate stage of tightening on the way to even more stringent final rules to take effect from January 2027 was abandoned. Industry in both the UK and EU had been warning of potential 10% tariffs without an agreement and welcomed the move.

At the most basic level, this extension demonstrated that the UK and EU can find ways to improve their trading relationship. This had previously been shown with the agreement of the Windsor Framework to supplement the Northern Ireland Protocol to the Withdrawal Agreement, reached in February 2023, as well as full UK accession to the Horizon science research programme, scheduled to take effect at the start of 2024. Many commentators on both sides had doubted such progress would be possible at the start of the 2023.

With the TCA being the most valuable preferential trade arrangement to both the UK and EU, any indications of a better relationship should come as a relief. According to a November European Commission report “on the Implementation and Enforcement of EU Trade Policy”, in terms of EU preferential trade deals 22.5% of their value in goods is with the UK, rising to 46% for services. Meanwhile, despite the UK government’s aspirations for Global Britain, over 40% of its total trade remains with the EU.

Details of the negotiation and agreement over electric vehicles suggest however that it would be premature to expect plain sailing from this point onwards. There were suggestions in October that the broad principles of an extension for electric vehicles had been agreed, yet there were concerns on the EU side about whether this should be done legally inside the TCA or through a separate instrument. Final text which includes a prohibition of further extension showed a certain sensitivity in Brussels. In time this restriction could itself by renegotiated, but a marker not to do so has been laid.

For the EU, sensitivity is almost certainly based on their continued fears of a Brexit UK still expecting the market access of a Member State, in particular in areas of its specific interest. Experience was further that this attitude came with petulance and aggression from UK negotiators when not granted, in public and possibly to a degree inside negotiating rooms. These fears and memories should be of particular concern to a Labour Party committed to seeking TCA enhancements, particularly in terms of mutual recognition through agreements on food and drink, and professional qualifications. While the EU has shown a willingness to talk and does have its own interests, it should be obvious that no deal will be straightforward particularly if the EU is concerned about protection against future UK governments.

Meanwhile UK and EU automotive sectors face the challenge of being some way behind their Chinese competitors. For the time being, with this extension, and with the EU’s investigation into subsidies that may lead to countervailing duties, the industry is being given some time to catch up. There is clearly the expectation of this happening in the next three years, something which industry experts are already suggesting to be optimistic.

Extending and changing preferential trade agreements is never an easy matter, even between the friendliest trade partners. Particular circumstances of the UK-EU relationship make this even more difficult. Given such a background, one should probably see progress this year including on electric vehicles as being as good as it could get. That can perhaps be the foundation for a new approach, in a new year, and possibly even a new UK government, but they would do well to take nothing for granted.


Disclaimer:
The opinions expressed in this blog are those of the authors alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.

Republishing guidelines:
The UK Trade Policy Observatory believes in the free flow of information and encourages readers to cite our materials, providing due acknowledgement. For online use, this should be a link to the original resource on our website. We do not publish under a Creative Commons license. This means you CANNOT republish our articles online or in print for free.

January 4th, 2024

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Share this article: Facebooktwitterredditpinterestlinkedinmail13 December 2023

James Harrison is Professor in the School of Law at the University of Warwick. Emily Lydgate is Professor in Environmental Law at the University of Sussex and Deputy Director of the UK Trade Policy Observatory (UKTPO).  Ioannis Papadakis is a researcher at the Centre for Inclusive Trade Policy (CITP) and a Research Fellow in Economics. Sunayana Sasmal currently serves as a Research Fellow in International Trade Law at the UKTPO. Mattia di Ubaldo is Fellow of the UKTPO and Research Fellow in Economics of European Trade Policies. L. Alan Winters is Founding Director of the UKTPO,  Co-Director of the CITP and Professor of Economics at the University of Sussex.


In answering this important question, different disciplinary approaches have emerged as have a range of different and sometimes contradictory findings. At the moment, scholars from the different disciplines are not talking to each other about the implications of this. The authors of this blog suggest it is vitally important that they begin to do so.  

Trade agreements around the world increasingly include environmental and labour provisions. Their presence attests to policymakers’ recognition that trade agreements cannot simply focus on economic issues. They should also address environmental and social concerns. But the existence of these provisions on paper is not itself a cause for celebration. Such provisions are only meaningful if they have positive outcomes in reality – if they, for instance, lead to decreased carbon emissions or enhanced conditions for workers.

Different methodological approaches to researching this issue have come to different conclusions about their real-world impact. First, quantitative studies, largely undertaken by economists, have tended to identify significant and generalised positive impacts for at least some provisions.

On the environmental side, one early influential study found that EU FTAs with environmental provisions improve environmental conditions in countries with strong civil societies. It also concluded that US FTAs are effective during the negotiation period in improving the environmental policy environment of partner countries. Another, covering 680 PTAs with environmental provisions, found that environmental provisions can help reduce dirty exports and increase green exports from developing countries.

In relation to labour provisions, one study found that the likelihood of a state fully protecting workers’ rights rises by 10% once it has signed an FTA with the EU which contains labour provisions. Another study found that labour provisions had a positive impact on (particularly female) labour force participation rates (although not on other labour rights).

On the other hand, more recent work, carried out with more advanced statistical techniques and more granular data on both the content of FTAs and the environmental outcomes, tends to find only mixed evidence: some specific provisions on greenhouse gases appear to be effective, but results are not consistent across models. No significant effects are found for labour provisions. Some recent work has also focused on specific outcomes produced by environmental provisions. Thus, one study, focused on deforestation, found that environmental provisions are effective in limiting deforestation following the entry into force of FTAs, but only because FTAs without such provisions increase deforestation and the provisions offset this.

There is also some indirect evidence of the effects of FTAs.  One study suggests a positive relationship between domestic environmental legislation (not environmental outcomes) and preferential trade agreements with environmental provisions, while another finds that FDI is deterred if FTA labour and environmental provisions have a higher degree of legalization. However, others suggest that such provisions might increase the costs of trade and production.

To sum up this first side of the literature, quantitative studies tend to suggest that some generalisable, although often limited, effects can be ascribed to labour and environmental provisions in FTAs. Across a wide range of different agreements, these studies suggest that some changes will happen as a result of the presence of some types of provisions – for instance that deforestation will be limited or domestic environmental legislation will be signed.

Legal scholars are often puzzled by these results. Environmental and labour provisions take multiple forms in different FTAs and are often not the kind of binding and enforceable provisions that are expected to produce significant results. In high-level summary, trade and sustainable development (TSD) chapters (as found in EU FTAs) and equivalent provisions in other FTAs often consist of ‘best endeavours’ clauses that commit parties to work towards high standards; cooperation on thematic issues, including through upholding agreements such as conventions of the International Labour Organization or the Paris Agreement; and obligations not to reduce levels of protection, often described as non-regression clauses.

Much debate has focused on whether these non-regression clauses should be tied to sanctions, as the US has done, and more recently the UK, Australia and New Zealand. In contrast, EU FTA commitments emphasize implementation through stakeholder dialogue of bespoke committees, such as a Civil Society Forum and Domestic Advisory Group. The EU has unveiled a plan for a limited increase in the use of sanctions in TSD chapter enforcement, and the USMCA has introduced new and innovative forms of labour rights enforcement.

Enforcement mechanisms remain an important focus for legal scholarship, as does the influence of FTA negotiations in changing domestic environmental and labour laws. However, focusing solely on treaty texts and the strength of the bodies that potentially enforce them, doesn’t provide a full account of the impacts of particular provisions.

Qualitative studies have been used by political scientists, geographers, business and socio-legal scholars to attempt to understand how obligations contained in treaty texts have translated into changes in labour and environmental outcomes. Such studies have generally involved case study methodologies and techniques such as in-depth interviews, focus groups and participant observation that allow deep exploration of the causal effects of certain sustainability provisions.

Most of the detailed studies have focused on EU trade and sustainable development (TSD) chapters and the labour standards provisions therein – although as environmental provisions are implemented and enforced in the same way, there are some learnings from these studies on the environmental side. Case studies on impacts in the EU’s FTAs with the CARIFORUM countries, Colombia, Korea, Moldova and Peru have found little or no evidence that the existence of TSD chapters led to improvements in labour standards governance, nor that there were significant prospects for longer-term change. Less robust studies of labour standards provisions in individual US agreements have led to similar conclusions. Positive impacts have been found to occur only in very limited scenarios when accompanied by specific actions by key actors (government officials, civil society actors, trade unions etc.), in relation to specific trade agreements where those issues became politically contentious, such as prior to the ratification of the EU-Vietnam FTA.

Overall, the findings of the studies presented here are very different. But their methodological strengths and weaknesses can also be contrasted. Quantitative studies are able to consider labour and environmental provisions across a wide range of agreements, thereby providing information about general tendencies. But these studies, particularly the earlier ones, are less compelling on the issue of causality. While sustainability provisions are posited as a likely cause of improvements in environmental and labour protection, there are generally weak attempts to substantiate causal links. The few studies that do make serious efforts to identify causal (and unbiased) links, tend to come up with many fewer positive effects. Most importantly, however, they all lack a convincing narrative about the mechanisms leading from FTA provisions to impacts on the ground.

Qualitative studies take causality seriously and can give detailed answers on the direct causal questions of how and why sustainability provisions have or do not have effects. On the other hand, they are weaker when it comes to generalisability; reliance on individual case studies leaves qualitative studies open to accusations that they have missed the ‘bigger picture’.

Scholars who have adopted these different approaches should come together to try to understand the rationale for these different findings and to promote better understanding of their respective research methods. Drafting this blog challenged some of our assumptions about how different disciplines tackle research questions, and facilitated our understanding of the strengths and weaknesses of our research approaches.

But this is not only an academic question. Understanding these methodological strengths and weaknesses has implications for policy making, as correct and full facts are essential to make good policy. For instance, there are policies with unintended consequences that can be identified by talking to people. When these are not considered, empirical analysis may lead to misleading policy prescriptions, even if the effects it estimates are precise, causal and generalisable.

Policymakers need to understand the effects of labour and environmental provisions if they are to take the right kinds of actions to promote better social and environmental outcomes through trade agreements. The authors of this blog all agree that there is a big difference between (1) telling policymakers they can achieve meaningful change through inserting environmental or labour provisions into trade agreements and (2) that to be effective, they must think very carefully about both the design of those provisions and how they will be taken up and utilised by key actors thereafter.

A broad account of how the disciplines can work together might go something like this: Economic studies identify FTAs where the correlation between environmental or labour provisions and positive outcomes appears to be high. Legal scholars bring a detailed understanding of the typology of FTA environmental and social provisions within these FTAs, using this to further refine economists’ findings about causal mechanisms. Political scientists, geographers, business, and socio-legal scholars interrogate how issues such as relationships, power asymmetries, access to information and access to resources shape the effectiveness of the environmental and social provisions in practice.


Disclaimer:
The opinions expressed in this blog are those of the authors alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.

Republishing guidelines:
The UK Trade Policy Observatory believes in the free flow of information and encourages readers to cite our materials, providing due acknowledgement. For online use, this should be a link to the original resource on our website. We do not publish under a Creative Commons license. This means you CANNOT republish our articles online or in print for free.

December 13th, 2023

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20 October 2023

Erika SzyszczakErika Szyszczak is a Professor Emerita and a Fellow of the UKTPO. She was the Special Adviser to the House of Lords Internal Market Sub-Committee in respect of its inquiry into Brexit: competition and state aid, and has previously acted as a consultant to the European Commission. She specialises in EU economic law. She is currently working with the European Judicial Training Network on developing training courses for national judges in EU competition law.

On 3 October 2023 the Council and the European Parliament reached provisional political agreement on an Anti-Coercion Instrument (ACI).[1] It is the latest legal trade measure contributing to the developing economic statecraft of the EU as part of the Open Strategic Autonomy. The tipping point for the EU to consider an extra method to address trade distortion occurred when China imposed trade restrictions on Lithuania after Lithuania improved trade relations with Taiwan. Lithuanian companies found that they could not renew or conclude contracts with Chinese firms, shipments were not being cleared and customs paperwork was held up. The ACI is portrayed as a deterrent device, discouraging third states from targeting the EU and its Member States with economic coercion through measures affecting trade or investment. It is another example of how the EU is forging a leadership role in developing new economic trade rules in a fragmented global trading world, by stealing a lead in the narrative on what is, and what is not, acceptable trade policy.

Legislative Process

The European Commission proposed the ACI in the form of a Regulation on 8 December 2021 at the request of the Council and the European Parliament. The European Parliament Committee on International Trade adopted amendments to the proposal on 10 October 2022, and in the plenary session confirmed the Parliament’s negotiating mandate on 19 October 2022. The Council agreed its negotiating position on 16 November 2022.

The tipping point for the EU to consider an extra method to address trade distortion occurred when China imposed trade restrictions on Lithuania after Lithuania improved trade relations with Taiwan. Lithuanian companies found that they could not renew or conclude contracts with Chinese firms, shipments were not being cleared and customs paperwork was held up.

The Legal Base for the ACI is Article 207(2) TFEU:

“The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall adopt the measures defining the framework for implementing the common commercial policy.”

This is trade legal base for a measure designed to enhance EU economic and political resilience. The European Parliament Committee on International Trade adopted amendments to the proposal on 10 October 2022, and in the plenary session confirmed the Parliament’s negotiating mandate on 19 October 2022. The Council agreed its negotiating position on 16 November 2022.

Definition of economic coercion

The ACI defines economic coercion as when a non-EU country attempts to pressure the EU or a Member State into making a specific choice by applying, or threatening to apply, trade or investment measures. In the European Parliament Briefing ‘Proposed anti-coercion instrument different types of economic coercion are identified:

  • Explicit Coercion: based on the use of formal measures. The US Trade Act of 1974 (Sect. 301) has been used or threatened to launch trade-restrictive actions with the aim to influence a foreign country to cease applying a measure that the US perceived as unreasonable and unfairly harmful to its commercial interests.
  • Disguised coercion: when an instrument set up with a legitimate purpose is abused, for e.g. excessive or discriminatory use of sanitary and phytosanitary measures.
  • Silent coercion or boycott: informal restrictions applied by private players who are unofficially instructed to do so by a country’s government or are called upon to do so by state-controlled media.

Once notified of an alleged act of economic coercion the European Commission must investigate within 4 months. The European Commission report will be sent to the Council which then has between 8 to 10 weeks to decide, by a qualified majority vote, whether the complaint of economic coercion exists. The first response will be to engage in dialogue to persuade the authorities of the non-EU country to stop the acts of economic coercion. If diplomacy fails, the EU has a range of countermeasures it can apply with the consent of its Member States. These include restrictions in trade of goods and services, intellectual property rights and foreign direct investment, imposing constraints on access to the EU public procurement market, capital market, and authorisation of products under chemical and sanitary rules. The European Commission has 6 months to set out the appropriate responses, whilst keeping the European Parliament and the Council informed at all stages.

Comment

The ACI is a new legal development in international trade law. It has been developed in response to activities deployed by China and the US which threaten EU security. The ACI is another example of how the UK, post-Brexit, may be the target of EU trade defence instruments.

Why does the EU need the ACI? The European Commission justifies the measure by arguing that new forms of economic coercion are not addressed by the existing conventional trade defence measures of the EU (for e.g. anti-dumping).

The concept of economic coercion set out in the ACI is not caught by current WTO rules. Even if the threatening behaviour could be brought within the existing WTO agreement, the stymied appellate process makes enforcement difficult.

However, the ACI is not a rapid defence trade mechanism. In fact, an EU firm or sector could suffer irreparable damage in the time it takes to activate and use the ACI. It may also encourage third countries to develop their own trade defence tools which are more effective than the ACI in responding to escalating situations.


Footnotes

[1] The European Commission proposed the ACI in the form of a Regulation on 8 December 2021 at the request of the Council and the European Parliament. EUR-Lex – 52021PC0775 – EN – EUR-Lex (europa.eu). The European Parliament Committee on International Trade adopted amendments to the proposal on 10 October 2022, and in the plenary session confirmed the Parliament’s negotiating mandate on 19 October 2022. Procedure File: 2021/0406(COD) | Legislative Observatory | European Parliament (europa.eu). The Council agreed its negotiating position on 16 November 2022. pdf (europa.eu). The Legal Base for the ACI is Article 207(2) TFEU: The European Parliament and the Council, acting by means of regulations in accordance with the ordinary legislative procedure, shall adopt the measures defining the framework for implementing the common commercial policy.

Disclaimer:
The opinions expressed in this blog are those of the author alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.

Republishing guidelines:
The UK Trade Policy Observatory believes in the free flow of information and encourages readers to cite our materials, providing due acknowledgement. For online use, this should be a link to the original resource on our website. We do not publish under a Creative Commons license. This means you CANNOT republish our articles online or in print for free.

 

October 20th, 2023

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Share this article: FacebooktwitterredditpinterestlinkedinmailMichael Gasiorek is Director of the UK Trade Policy Observatory and Co-Director of the Centre for Inclusive Trade Policy. He is Professor of Economics at the University of Sussex Business School. Justyna A. Robinson is a Reader in English Language and Linguistics at the University of Sussex and a Director of Concept Analytics Lab.

In early 2023, the Labour Party launched a National Policy Forum. It comprised a series of public consultations across six core policy areas, with the stated aim of helping the Labour Party to ‘build their policy platform’.  A key part of the consultation process was to invite written submissions on these policy areas. One of the six policy areas was entitled Britain in the World, (to which the UKTPO/CITP also responded), which posed a set of seven questions all of which related to trade and trade policy.

Questions

  1. 1. What is the role of international trade in promoting domestic economic growth, boosting jobs and driving up wages?
  1. 2. How can Labour ensure the UK’s international trade policy promotes growth and investment across the nations and regions of the UK?
  2. 3. How can Labour build resilience into the international trade system and better ensure the security of essential supply chains?
  3. 4. How will a Labour government’s trade policy reduce poverty and global inequality whilst promoting (a) human rights, (b) workers’ rights, (c) fair trade and (d) global peace and security?
  4. 5. How can Labour use trade policy to deliver environmental protection and help drive the world to net zero
  1. 6. What are the specific implications of policy proposals in this area for (a) women,(b) Black, Asian and minority ethnic people (c) LGBT+ people, (d) disabled people and (e) all those with other protected characteristics under the Equality Act 2010?7. What consideration would need to be given to policy proposals in this area when collaborating with devolved administrations and local governments in England,Scotland, Wales and Northern Ireland?

The consultations were due to lead to a set of policy documents to be agreed in July 2023. With any consultation exercise, including those undertaken by the UK Government on the UK’s Free Trade Agreements, it is hard to know how seriously the consultation is being taken and which if any of the diverse views and responses are being listened to, and how selectively. Consulting with stakeholders and members of the public in the formulation of policy are important if taken seriously, and so consultations such as this are, in principle, welcomed.

So, on the eve of the Labour Party conference, we have analysed all the submitted responses to identify the key issues raised.  There were 310 responses submitted which varied considerably in length. Most submissions were less than 500 words, but some were as long as 10,000 words. It is important to note that the consultation was open to anybody: individuals as well as organisations and companies. The chart below shows that 35% of the submissions were submitted by non-Labour party members (labour guests).[1]

Analysing the data is a challenge because the responses vary enormously in length and scope – with some private individuals submitting short sentences on a couple of issues, to larger organisations and companies submitting lengthy responses. Fortunately, there are tried and tested methods (and smart) software which provide a means for using corpus and natural language processing techniques for the analysis of such textual responses and controlling for different lengths of responses, so that individual lengthy responses do not dominate the analysis.

A key aspect of the analysis is to identify the frequency with which submissions raise particular issues. This is done by comparing the frequency of given words or groups of words in the submissions, relative to the frequency with which those words would appear in ‘normal’ usage. Hence words that appear relatively more frequently are those that prima facie raise issues that the respondents care about. In the jargon, this is called the ‘keyness’ score. We also need to control for the fact that certain terms may appear more frequently in individual responses. So, we want to be able to identify how often an issue is raised but to adjust for those issues being raised frequently in a small number of responses. This is done by producing something called the ‘average reduced frequency’ (ARF).

Consider the chart below. This gives the ARF score for the top 10 identifiable trade issues raised in groups of up to three words[2].  We see that the issue of trade and human rights is the primary concern, on average across the responses. Care has to be taken in interpreting the height of the bars – just because a bar is twice as high does not mean that the issue was perceived as twice as important. Nevertheless, it is clear that human rights were perceived as considerably more important than supply chains and economic growth.

Top issues raised by respondents (ranked byARF)

Relatedly, if one takes the importance of individual words, the word ‘promote’ has a high ARF score. On its own, it is not clear what the respondents want promoting, and so we look at the collocation of words. This identifies that the key objective here was to promote growth, followed by rights, values, trade, and development in order of importance.  Another word with a high individual score was ensure which co-occurs most with security (of supply chains), rights, and access (markets, supply chains), suggesting that these are of high importance for trade policy.

Of course, the frequency of some of these words will have been driven by the specific questions posed by the consultation exercise, as given above, which specifically asked about growth, supply chains and human rights for example. Even so, the rankings are significant as they indicate which of these issues appear of greater concern to respondents.

More depth in the analysis can be obtained by considering the nature of the responses to the individual questions posed. Hence, the responses pertaining to the role of international trade in promoting domestic economic growth, boosting jobs and driving up wages illustrate different perceptions of what trade policy is for. While some responses highlighted the role of trade in boosting productivity, innovation and access to supply chains, as well as emphasising trade with the EU; others focused on the role of trade (deals) in building relationships, soft power, and trust with third-party countries. Additionally, some demonstrated concern for objectives which are not focused on economic growth and economic efficiency such as the regional dimension, worker and human rights, or environmental protection.

With regards to the regional dimension, there is a clear message that international trade, especially services trade as well as ‘green’ trade, could and should be used to reduce regional disparities but that this also requires much more substantial investment in infrastructure and transport networks, as well as policies to mitigate negative impacts if it is to be successful. There was general acceptance of the importance of building more resilience in supply chains with a focus on the need to build trust with partner countries and reorienting supply chains to more trusted countries as well as protecting cyber-security. Interestingly, there was an overlap here with environmental and rights concerns with several respondents calling for more due diligence requirements in supply chains and moving to net-zero supply chains.

Environmental protection and cognate terms such as green technology, carbon emissions, energy, due diligence come up widely in the responses with widespread support for a better environment and net zero, even if it means renegotiating existing deals. Interestingly, the desire to use trade deals to lead to better outcomes in these regards does not pertain just to the UK, but that the trade deals should be used to influence and change practices in partner countries.

The responses highlight the importance of taking into account how trade may negatively impact a range of outcomes, be this with regard to the environment, regions, agriculture and animal welfare, older workers, disabled workers, or women. However, such concerns did not lead to opposition to trade deals, but rather to suggesting that (a) consideration of such impacts should form a (more) explicit element in the evaluation of proposed trade deals; and importantly (b) that there should be much more widespread inclusive consultation processes with affected groups, sectors, and regions in the formulation of trade policy and the negotiation of agreements.

Given the range of questions posed in the consultation exercise, it is perhaps not surprising that there is considerable heterogeneity in the answers. One clear message, however, which emerges is the recognition that trade is good for growth and an important element in raising productivity, but that at the same time, trade policy needs to be value driven. While these are not necessarily mutually exclusive there are trade-offs in trying to meet all the objectives. Hopefully publication of a trade strategy by the Labour Party may provide some insights on their approach to those trade-offs, and maybe the forthcoming conference may also shed some more light.

Footnotes

[1] Categories as defined by the Forum, see bottom of this page for all categories:  https://www.policyforum.labour.org.uk/commissions/britain-in-the-world

[2] Note that we have excluded here terms that came up but do not, of themselves, shed meaningful light on trade issues, such as ‘UK government’ or ‘Labour Party’

Disclaimer:
The opinions expressed in this blog are those of the author alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.

Republishing guidelines:
The UK Trade Policy Observatory believes in the free flow of information and encourages readers to cite our materials, providing due acknowledgement. For online use, this should be a link to the original resource on our website. We do not publish under a Creative Commons license. This means you CANNOT republish our articles online or in print for free.

October 6th, 2023

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22 September 2023.
L. Alan Winters is Co-Director of the Centre for Inclusive Trade Policy (CITP), Professor of Economics at University of Sussex Business School and Fellow of the UK Trade Policy Observatory.

When UK Prime Minister, Rishi Sunak, spoke on climate policy on 20th September and talked the following day to the BBC’s Today programme, he did much more than delay the UK’s policies for achieving net zero. He said he was changing the terms of political debate. He spoke of honesty, pragmatism, transparency, and ‘getting opinions and advice from anybody’. Nothing could be more welcome to anybody who has engaged with UK policy over the last eight years, during which the greatest failing has been the lack of these characteristics at the highest political levels.

I would like to celebrate the change in practice immediately, so let me pose a few straightforward questions to Mr Sunak to which a pragmatic government must surely have answers already.

Climate

Let me start with the climate policy announcements themselves:

What are the estimates of how much his new climate policies will increase the UK’s total carbon dioxide emissions between now and 2050?

What are the estimates of how much the new measures will reduce the expenditure by the average household over the period 2023 to 2035?

Nearly all experts believe that the more rapid a country’s adjustment towards net zero, the greater the costs it faces. Does Mr Sunak agree? What estimates does he have of the increased adjustment costs of reaching net zero in 2050 arising from the new delays?

Will the new policy on energy infrastructure be fully costed and have a timescale that the people who have to deliver it on the ground believe is credible? When is it due and when it is announced will My Sunak commit that his government(s) will never change it?

Next, let me turn to Brexit and international trade policy – the focus of both The Centre for Inclusive Trade Policy and the UK Trade Policy Observatory. We are particularly pleased to see Mr Sunak speaking about imposing ‘costs on working people, especially those who are already struggling to make ends meet and to interfere so much in people’s way of life without a properly informed national debate’, which has been of particular concern to us.

Brexit

Is Brexit working for the British economy? And, as we say in university exams, explain your reasoning.

Does Mr Sunak really believe that the additional bureaucratic costs of importing food into the UK (nearly all of which comes from the European Union) has had no effect on food prices?

Is the UK actually going to introduce customs formalities on imports from the EU or is it just going to give up controlling that border? Given that we have had multiple postponements of the introduction, a simple ‘yes’ will not suffice.

How many UK firms have stopped exporting to the EU since 2020? And how many of them have started exporting elsewhere?

What is the cause of UK business investment more or less flatlining since 2016?

What is the main reason given by British business for its lack of enthusiasm about UK regulations diverging from those of the EU?

How much will it cost the UK chemicals industry to obtain regulatory approval under UK REACH?

International Trade

With the World Trade Organization’s dispute settlement system broken, why will the UK not join 26 other WTO members in the temporary alternative mechanism for resolving trade disputes – the Multi-Party Interim Appeal Arbitration Arrangement (MPIA)?

Does Mr Sunak really want independent advice on trade policy? His government proposed in March to neuter the independent Trade Remedies Authority. No action has been taken since. May we give him credit for changing his mind?

Big changes in political practice are hard to engineer, so perhaps Mr Sunak can underpin his revolution by committing that pigs will not fly between now and the next general election.

This blog was first published on the CITP website on September 22, 2023.


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The opinions expressed in this blog are those of the author alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.

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September 22nd, 2023

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June 21 2023

Peter Holmes is a Fellow of the UK Trade Policy Observatory and Emeritus Reader in Economics at the University of Sussex Business School. Guillermo Larbalestier is Research Assistant in International Trade at the University of Sussex and Fellow of the UKTPO.

This is an extract from a paper first published on The Review Of European Law journal on may 5, 2023. To read it in its entirety, click here.

In the extract below we suggest that there are few trade benefits to be had. Is there something else that enhances economic viability? Is it as “regulatory sandboxes”? The present regulations require adherence to international environmental and financial standards. So what about R&D? There are some wind turbine, carbon capture and “Green Hydrogen” projects but not much linkage to Freeports.  We don’t address the recent accusations of financial irregularities, yet clearly, property speculation is the other way to profit. (more…)

June 21st, 2023

Posted In: UK- EU

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Share this article: Facebooktwitterredditpinterestlinkedinmail16 June 2023

Chloe Anthony, Doctoral Researcher at University of Sussex Law School and Legal Researcher for the UK Environmental Law Association’s Governance and Devolution Group.

The Retained EU Law (Revocation and Reform) Bill is part of the Government’s ‘Brexit opportunities’ agenda. It is currently in its final stages in Parliament, going back and forth between the Houses, in a debate on the inclusion of clauses that aim to safeguard parliamentary scrutiny and prevent the lowering of environmental protections. It returns to the Commons on 20 June. (more…)

June 16th, 2023

Posted In: UK- EU

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8 June 2023

Michael Gasiorek is Director of the UK Trade Policy Observatory and Co-Director of the Centre for Inclusive Trade Policy. He is Professor of Economics at the University of Sussex Business School. Peter Holmes is a Fellow of the UK Trade Policy Observatory and Emeritus Reader in Economics at the University of Sussex Business School. Manuel Tong Koecklin is a Research Fellow in the Economics of Trade at the UK Trade Policy Observatory and University of Sussex Business School.

Recently, there have been a series of reports in the media focussing on the challenges that electric vehicle (EV) manufacturers are likely to face, from the end of this year, in exporting electric vehicles tariff-free to the EU. The concern it because of the changes in the rules of origin (ROOs) requirements (for EVs and batteries) which will become more difficult from January 2024, and again from 2027 and 2028 onwards. (more…)

June 8th, 2023

Posted In: UK- EU

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