What happens to our external trade relations post-Brexit is one of the biggest challenges going into the negotiations of the United Kingdom’s exit from the EU. The UK currently benefits from being part of EU trade deals with around 50 other countries, with 6 more deals in the pipeline covering another 21 countries. Some commentators have suggested that the UK might negotiate to maintain these agreements as an associated country whilst negotiating with other partners currently without EU trade deals. Others have suggested that Brexit means a comprehensive UK trade policy and renegotiated deals with all third countries. This is just one of the issues that Westminster must grapple with in advance of triggering Article 50, but it will have major repercussions for our jobs and the UK economy.
Whilst there are bilateral trade negotiations with individual countries there are also on-going ‘horizontal’ or sectoral trade negotiations globally. The EU referendum was heavily focused on trade in goods, but one of the most controversial and crucial areas of trade policy for the UK is the liberalisation of services. As a net exporter of services, how rules develop on the trade in services must feature prominently on the UK government’s agenda in the coming years.
Since 2013, a group of 23 countries - the EU counting as one – has been engaged in updating global rules through the Trade in Services Agreement (TiSA) negotiations to take into account the impact of the internet and new services. While these negotiations have attracted many fair criticisms, it will be absolutely crucial for the UK to remain at the table if we are to shape the rules that apply rather have to accept rules set by others. Ambitious observers suggest that the talks could conclude in a matter of months, but as trade negotiations are increasingly bogged down internationally a realist view is that the talks will take longer.
As Socialist spokesperson on these talks, I have spent hours privy to confidential briefings on the negotiations and analysing the offers being tabled by the parties. Since we must start to develop a UK trade strategy, it is worth reflecting on the discussions we have already had in the EU and how they could inform Westminster priorities.
A first major objective must be to keep control over what is open to trade and what remains protected. In recent years, trade negotiations have started to include provisions that would automatically increase the degree of liberalisation. A good example of this is the use of negative listing in trade schedules - in which everything not explicitly protected is deemed to be open to trade - or clauses known as "standstill" and “ratchet", which lock-in liberalisation and prevent governments from reversing commitments. Private service lobbyists have been very active in support of these measures, but caution is needed to ensure public policy space and democratic choice.
Business lobbies also see ‘regulatory cooperation’ as a new tool to bypass democratic rule-making. These measures radically transform trade deals, changing them from static traditional agreements into "living agreements" whose impact evolves over time with limited democratic scrutiny. This issue has long been debated in Brussels, with the European Parliament taking strong positions in defence of parliamentary scrutiny and control. However, it has remained largely absent from the domestic trade debate in the UK. It will be up to Labour MPs to ensure that the current Tory government does not have a free hand not only to impose their neoliberal agenda on our generation but generations to come.
Since services are mostly delivered by people in proximity or at a distance, the international trade in services is inevitably mirrored by the international movement of workers. Employment rights are also at stake. The EU's freedom of movement is the most regulated aspect of this phenomenon. But short of exiting from the world we will also have to face up to the vastly unregulated "Mode 4" trade, through which services are delivered by foreign workers operating at home. Trade deals have been used by the EU to project elements of its social model and incentivise others to adopt it. But they can also carry threats to the provisions of public services. Socialists and Progressives in the European Parliament have done extensive work to define a set of rules to protect workers and their rights as well as public services and guarantee that trade would help raise standards abroad rather than weaken them in Europe.
Thirdly, the balance between data protection and data flows have dominated our debate inside the EU. Data flows are fundamental in a digital world for businesses and consumers, but both expect their privacy and data to be protected. The EU has had some success in defending privacy, and a set of European principles has emerged over recent years on how to regulate the internet. These principles, which combine net-neutrality and strong consumer protection with openness and competition, differ markedly from the US or Chinese approaches. The UK must now reconfirm its commitment to strong data protection rules, and contribute to building effective safeguards online against unwarranted surveillance and the exploitation of personal data. This issue is now a key feature of all services negotiations, and any UK deal in the future will be no exception. Trade agreements can be useful tools to regulate e-commerce but they could also result in greater liberalisation and weaker protection for consumers. As response to increased digitalisation, we need a sophisticated debate on the kind of internet we want, and what means are needed to achieve it. Balance is key. It will do us no good to have an over-regulated internet, which is disadvantageous for ordinary people and businesses.
There will be many decisions to take in the coming months and years, but while we decide where our red lines are the world around us will keep moving, and we need to get ready to fight to defend our strategic interests. Ironically, Brexit seems to have been motivated by a rejection of the economics of neoliberal globalisation, and thus it is up to us to try and prevent the worst excesses of neoliberal economics from hurting the people who have shouted so loudly that they wish things to be done differently. Trade deals can do great good, and they can have dire consequences, and we need to push as hard as we can to protect rights, data protection and democratic control.
This article originally appeared in the Huffington Post.