Wednesday 29 August 2018

Back to where we were

Few things could better underline the real impact on trade of Brexit than the fanfare greeting the agreement between the UK and SACU (the Southern Africa Customs Union), announced during the PM’s visit to South Africa.  This is not a new trade deal and has not been ‘negotiated’ in any meaningful sense of the word; it is, rather, an agreement by SACU to continue to apply the terms of its current agreement with the EU to the UK, and an agreement by the UK to apply the terms previously negotiated by the EU to future trade with SACU.  The ‘negotiation’ underpinning the terms of the deal was all carried in the past out by the EU.
One of the interesting aspects of the agreement is that it underlines the extent to which trade agreements worldwide are increasingly being negotiated not between individual countries but between trade blocs which first establish their own ‘internal’ rules and then negotiate collectively with other blocs.  This is, of course, precisely what the UK government is saying that it does not want to do in future; it wants, instead, to negotiate its own individual agreements, because that is, apparently, ‘taking back control’.  In this case, ‘taking back control’ means signing as an individual state an identical agreement to that which had already been signed by the EU collectively.
The chances of getting ‘better’ agreements are, in most cases, slim, as this specific example demonstrates.  It’s very much easier to simply piggyback onto work already done than to start from scratch.  That’s not to knock the approach; replicating all the EU’s current agreements has to be better than simply walking away from them all and spending the next ten years trying to negotiate something essentially very similar in the hope that, just occasionally, freedom from the constraints of trying to meet the requirements of 28 member states might bring a small improvement.
It does mean, though, that ‘setting an independent trade policy’ will mean, in most cases and for the foreseeable future, simply accepting the terms previously and painstakingly negotiated by ‘Brussels’.  It’s a lot of time and effort just to get back to where we started.

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