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LONDON – Welcome to the new era of awakened commerce.
New UK deals will lower tariffs, facilitate cross-border data flows and… improve gender rights.
Sexism is just one of the social issues that appear in global trade agreements – along with environmental protection, human and labor rights, animals, and safeguards for indigenous communities.
While some argue that expanding trade policy to reflect voter values more broadly is a political necessity, others fear that this further complicates negotiations.
As Britain crafts an independent trade policy outside the European Union for the first time in more than 40 years, such dilemmas are particularly politically thorny. Boris Johnson’s government, many of whom are instinctively allergic to accusations of “virtuousness,” must sell global trade to voters.
“The ‘Woke’ trade policy is here to stay, and that’s a good thing,” said John Ballingale, a British economist at consultancy Sense Partners in New Zealand. He added that societal issues are now “key government objectives”, and business deals reflect that.
“Trade policy has been adjusted to reflect changes in societal preferences,” he said. “And that’s not a bad thing.”
Others are less convinced. Daniel Hannan, a conservative peer and senior government advisor on trade, said such important ethical questions “should be treated as issues in their own right, not as issues in trade deals.”
Speaking at a conference in central London, he said the debate over environmental provisions or gender rights in trade agreements was “a kind of signal of tremendous virtue”, adding: “This is not what a trade agreement means or does. A trade deal is about identifying and removing certain obstacles. “.
Hanan got unexpected support from Vince Cable, a former Liberal Democrat business secretary who appeared at the same event. He said doing business deals “without strings” was “completely inappropriate” and “devaluing” the agreements, as well as the issues themselves. “The whole notion that gender, human rights and labor standards should be part of trade agreements is a sign of virtue and is very unhelpful and in fact precludes reasonable trade agreements,” he added.
Even those who support an ethical approach to trade admit that such societal issues make negotiations more difficult, although they argue that this is a trade-off worth making.
“Anyone who would argue that we should go back to the good old days of commerce working in a silo is in the land of the cloud cuckoo,” said Chris Southworth, general secretary of the UK branch of the International Chambers of Commerce. Public policy. It makes no sense to think that commerce should exist in a room alone.”
Wake up PR
It is not only Britain that is diverting trade policy from the mere exchange of goods and services. The European Union and others have always been concerned about the environment. New Zealand insists on provisions to protect Maori communities, while Canada, Chile and a number of East African countries have written women’s rights into deals.
“The UK begins its quest for global trade deals at a time when the British people expect high standards in food production, agriculture and animal care,” said Sophia Gaston, director of the British Foreign Policy Group. They are also increasingly understanding issues related to labor standards and the environmental footprint of imported goods. These aren’t just ‘woke up fears’ – they’re pretty much the trend.”
Aside from moral imperatives, there are economic benefits to a vigilance agenda as well. Advocates argue that empowering women, transforming the planet to become carbon neutral and nurturing strong local economies will not only be beneficial from an equality and environmental perspective, but will also stimulate production and tap into new markets and skills.
But some lofty moral ambitions come with economic costs – at least in the short term – including efforts to improve animal welfare, give workers a fair deal and protect the planet. This is why writing these issues into trade deals can become beneficial, so that countries avoid undermining each other through lower standard imports that are cheaper to produce.
Writing terms in deals is an acknowledgment that supporting values can “come at a cost in the marketplace, and therefore by seeking agreements with trading partners seeking to level their playing field,” Nick Lockhart, an expert on international trade at law firm Sidley Austin, said.
It is accepted within the UK government that failure to recognize the values that the public cherishes may be the death knell for future deals. When the UK’s Department of Commerce was set up, ministers and officials viewed the failed Transatlantic Trade and Investment Partnership negotiations between the EU and the US as a lesson in how not to do trade, according to a former government official.
TTIP talks collapsed amid public concerns that the agreement would benefit major companies at the expense of the environment, workers and animals. This result was seen as a colossal commercial failure, not to mention a waste of resources.
When Liz Truss took over UK trade management in the summer of 2019, she vowed to avert another TTIP disaster and began pitching deals like campaigning — each of which had to get its own mandate from the public.
That means making arguments beyond dry GDP numbers and import and export numbers, focusing on the jobs and less important benefits of what the much-advertised “Global Britain” brand could mean.
It was also intended to walk the line between flag-waving free traders, whose approach might not be swallowed up by the public, and environmentalists, NGOs and opposition parties, whose arguments skeptical of trade might also override the public mood and misjudgment.
It was a lesson New Zealand had to learn, too. Palingal said the government there had to rebuild the “social license to liberalize trade” in the wake of the difficulties [Trans-Pacific Partnership] Negotiation. This means talking to Maori groups, labor unions and environmental activists – not just exporters – “all with the idea of trying to reflect their interests within trade agreements.”
Awaken the trade barriers
But making a moral case for trade with Australia and New Zealand is a walk in the park compared to other plans Britain has for deals with the Gulf states, India and the United States, among others.
Working towards a trade deal involving Saudi Arabia, for example – the oil-rich human rights nightmare of a country where restrictions on women prevail – threatens to become a PR fireball for the British government.
Gaston, of the British foreign policy group, said the ethical approach to trade “gets more difficult with strategic partners and non-democratic countries”. “Ultimately, the British people understand that sometimes economic interests need to be prioritized, but they will want to know that the government has really tried to stand up for the values they care so deeply,” she added.
Others argue that trade could become a platform for more awakened nations to challenge others – although there is little suggestion that this is happening with China.
A British minister insisted that “our diplomacy along with our economic diplomacy is succeeding”, arguing that the UK can export its values as well as its goods. “We are the government of the people, and the people are very clear that deforestation matters to them and women should have rights all over the world.”
Correction: This article has been updated to clarify the trade negotiations that have been difficult for New Zealand.
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