19 May 2017

Compiled by Fellows of UKTPO

Brexit will leave many areas of UK policy open to change. International trade policy is among the most important of these for UK prosperity and also among the most immediate because the status quo cannot simply be extended. This is the third in a series of blogs reporting what the major political parties say about trade policy in their 2017 manifestos, as they become available.

The UK Trade Policy Observatory (UKTPO) has set out a series of issues that it believes should be considered in any election manifesto that might form the basis of the UK’s future trade policy. The table below checks whether or not the Conservative Manifesto mentions these important elements explicitly or implicitly. Following that we offer a brief commentary on the treatment of trade policy in the manifesto.

Analysis

The Conservatives’ manifesto is organised around five challenges, amongst which are the “need for a strong economy” and the Brexit process. International trade is acknowledged to play a key role for future growth and prosperity, though the manifesto’s focus is almost exclusively export-oriented and with a view towards countries outside the EU.

On the EU, the Conservatives are aware that the rejection of the freedom of movement of labour – to control immigration from the European Union – implies that the UK can no longer enjoy unlimited access to the European Single Market, and the remaining freedoms (i.e. freedom of movement of goods, services and capital).

They aspire to a ‘deep and special partnership including a comprehensive free trade and customs agreement’, and to have as few barriers to trade and investment as possible – both studiously non-specific aims. Setting aside the ‘customs agreement’, which is usually taken to be about clearing goods through the ports rather than about tariffs, one might assume that a comprehensive free trade agreement implies tariff-free trade in goods. It does not, however, prioritise trade in services nor argue explicitly for mutual recognition agreements. There is recognition that key sectors may rely on migrant workers, although within the context of reducing net migration to tens of thousands, and a non-committal mention of remaining within some European programmes.

The Conservative manifesto is explicit about reaching agreement on the future partnership with the EU within the two-year negotiation window allowed by the Article 50 of the Treaty of the European Union. That is, there is to be no transitional period, and if the outcome after two years is not satisfactory, ‘no deal is better than a bad deal’.

Looking beyond Europe, the Conservatives will seek new trade deals, including ‘replicat[ing] all existing EU free trade agreements and support[ing] the ratification of trade agreements entered into during the EU membership’. In particular, they want to build upon the special relationship with the United States and strengthen Commonwealth links. The also propose new institutions (Regional Trade Commissioners and the Board of Trade) to promote exports, including, explicitly, those from the devolved regions.

The manifesto states a firm commitment to support the global multilateral rules-based trading system. It is also the only manifesto to mention explicitly lodging new UK schedules with the WTO that are in alignment with the EU schedules which currently bind the UK. There is no mention of the services trade talks, however.

There is no mention of consumer interests in trade policy and the idea of compensating losers from trade policy reads as if it is restricted to shocks emanating from Brexit:

We will use the structural fund money that comes back to the UK following Brexit to create a United Kingdom Shared Prosperity Fund, specifically designed to reduce inequalities between communities across our four nations.

Finally, the Conservatives propose to enact a Great Repeal Bill that will convert EU law into UK law to guarantee that the rights of workers and protections given to consumers and environment by EU law will continue after UK leaves the EU. This not quite the same as stating whether such rights would be guaranteed or not in future trade agreements.

While the UK Trade Policy Observatory (UKTPO) takes no institutional position and will continue to remain firmly non-partisan during the UK General Election, it believes it is useful to share some of the questions that its fellows think will be important when reviewing what the party manifestos say about trade.

Examining manifestos is particularly important, because the winning party’s manifesto may be cited under the Salisbury Convention, which precludes the House of Lords from opposing bills passed by the Commons to honour election manifesto pledges.

Disclaimer:
The opinions expressed in this blog do not necessarily represent the opinions of the University of Sussex.

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