UK urged to create independent trade policy adviser

By on 22/05/2017 | Updated on 24/09/2020
The IfG believes an independent body to advise on trade policy post-Brexit is key to create and maintain trading relationships (Image courtesy: John Fielding)

The UK needs to set up an independent body to advise on trade policy post-Brexit, a British think tank has argued.

A new paper from the London-based Institute for Government warns that the UK government needs to “radically” change the way it operates if it is to reap the full benefits of taking back control of trade policy after leaving the European Union.

Despite establishing a new trade department since the Brexit referendum, the IfG warns, the UK is not well placed to negotiate or implement new trading relationships – work that for many years has been handled by EU officials in Brussels.

The government needs to recognise that there is “much more to trade policy than making trade deals”, the think tank says. The UK will need to put in place a high-level trade strategy, linked to the country’s wider economic aims and pulling together work from across Whitehall, in order to make the most of its post-Brexit trade freedoms.

Among its main recommendations, the IfG says the UK should consider setting up an independent analytical body to advise on trade.

The paper cites the examples of Australia and the USA, both of which have established independent government organisations – the Productivity Commission and United States International Trade Commission respectively –to provide analysis on trade policy options.

In the UK, the IfG says, a comparable body could follow the model of the independent Office for Budget Responsibility, which provides impartial advice on the public finances.

As well as providing neutral analysis and advice, the IfG argues, an equivalent entity for trade could play an important role in acting as a bulwark against pressure by less competitive industries to instigate protectionist measures.

“These industries often form powerful, entrenched interests, and UK policymakers have been insulated from these pressures while trade policy has been run from Brussels. Government will find it easier to challenge these entrenched interests using analysis that has the credibility of independence,” the paper says.

Oliver Ilott, the report’s lead author, said: “There is a real danger that the UK wastes its limited capacity launching trade negotiations with large numbers of countries, and either doing bad deals quickly or getting bogged down in protracted talks going nowhere. The government needs a strategy that targets a few priority countries and also explores options that may be better than free trade agreements.”

The IfG’s analysis will no doubt strike a chord with former Treasury second permanent secretary John Kingman, who in January warned against acceding to pleas from weak businesses to prop them up with protectionist measures or subsidies. “The single best way to undermine productivity is to prop up failing and unproductive businesses, yet I have never known a government of any complexion which wasn’t frequently struggling with pressure to do just that,” he said, pointing to the wrangling over Wales’s troubled Port Talbot steel plant.

The paper, ‘Taking Back Control of Trade Policy’, is available on the IFG website.

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See also:

UK union chief warns that civil servants lack resources to tackle Brexit

Leading Brexit campaigner says UK can remain open to immigrant labour

Report: ‘Deluded’ UK cannot afford to be smug on Brexit

Responding to the Brexit challenge: a round table debate

About Ben Willis

Ben Willis is a journalist and editor with a varied background reporting on topics including public policy, the environment, renewable energy and international development. His work has appeared in a variety of national newspapers including the Guardian, Daily Telegraph and Times, as well as numerous specialist business, policy and consumer publications.

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