In January, for the first time in nearly 50 years, the UK will ‘take back control’ of its trade policy from the EU. During and since the referendum campaign, Brexit-supporting politicians have presented voters with a narrative of Britain’s place in the world as a buccaneering, free-trading nation. While this narrative can reasonably be queried (the British Empire was arguably as much a protectionist cartel as a force for open trade), it has been the justification for leaving the EU’s customs union and single market and beginning new trade negotiations with the US, Australia, New Zealand and the Trans-Pacific area, while also renegotiating trading relationships with the EU, Japan, Canada and elsewhere.^[1]

Regardless of the irony of leaving the world’s largest trading bloc in order to seek more trade, it is clear that trade will be a key part of the government’s ambitions for Brexit. Much less clear is what these ambitions will entail in practice: while the government is keen to strike new deals, they lack an overarching strategy and they have found themselves at odds with farmers, environmental groups, businesses, consumers and trade unions over the potential impact of these deals on all sorts of issues, from chlorinated chicken to the NHS. And yet, it is true that Brexit is an opportunity for the UK to rethink the role of trade in the 21st Century, to build consensus across different groups in the UK, and to develop a trade policy which benefits both people and the planet.

The UK has a unique opportunity to reimagine a socially and environmentally just trade policy. Achieving this will require strategic thinking about what values we want to underpin the UK’s trade negotiations. Rather than rushing into negotiations, it will require democratising our processes for negotiating trade deals and setting clear lines on the environment and human rights. These three pillars – democracy, the environment and human rights – should form the core of our trade policy after Brexit. With them, our trade policy can be genuinely progressive and world-leading; without them, our trade policy poses a risk to our environment, sustainable development, and millions at home and abroad whose lives are affected by UK trade.

1. Democracy

Despite the rhetoric of ‘taking back control’, the government has done very little to empower British MPs, or indeed British civil society and ordinary citizens, to influence trade policy after Brexit. This risks creating a culture of mistrust between the public, businesses, MPs and government, and a lack of transparency about what is on the table in trade agreements. The absence of an overarching trade strategy from the Department for International Trade, with clear objectives and principles, also means that businesses and civil society are left in the dark about the government’s objectives for new deals.

The UK would do well to learn lessons from TTIP – the proposed EU-US mega trade deal – which was met with significant opposition from European citizens, leading to its eventual collapse despite years of negotiations and political will from Brussels and Washington DC. TTIP collapsed in part due to public anger about the lack of transparency in the negotiation of the deal, as well as frustration that their own elected representatives could do little to scrutinise or stop the deal. The lack of transparency also meant that politicians struggled to assuage citizens’ concerns about US food standards, the impact of TTIP on public services including the NHS, and Investor-State Dispute Settlement (ISDS, which allows firms to sue governments for introducing regulations).

Ultimately, this meant TTIP caused a breakdown in trust between citizens and government officials who were in charge of negotiating trade deals. We should not be surprised that trade deals create a lot of anxiety among ordinary citizens, whose lives are touched in all sorts of ways by FTAs – from the food on supermarket shelves to the provision of health services to the protection of personal online data. Trade agreements can also lead to dramatic economic shifts and privilege certain industries over others, leading to economic uncertainty, which so often hits the poorest the hardest. These are all reasons for why it is essential that our post-Brexit trade policy builds consensus and commands democratic support.

Polling shows that British voters have particular concerns about the impact of trade deals on food and environmental standards, as well as concerns about public health and protecting the NHS. 80 per cent of voters would not accept chlorine-washed chicken or hormone-fed beef, and a majority of voters in areas which supported leaving the EU in the 2016 referendum – including those on lower incomes – support regulation on businesses to maintain high standards.^[2] Polling also shows that consumers do not want animal welfare standards lowered and this is consistent across regions, age and socio-demographic groups, including 76 per cent of C2DEs and 74 per cent of ABC1s, showing that even consumers with lower incomes still value high standards.^[3]

It is important that these concerns of ordinary voters are reflected in the development of our trade policy after Brexit. This is perhaps why five parliamentary committees, including the International Trade Committee and the Lords Constitutional Committee, have called for fundamental reform to the way trade deals are negotiated. As things stand, MPs get no guaranteed debate or vote on new trade deals, there are no requirements on transparency, and the government can begin, conduct and conclude negotiations without notifying MPs or the public.

In order to build consensus and ensure that the UK’s post-Brexit trade policy is fully transparent and democratic, the government should set out legislation which includes:

1. Before negotiations: Publication of the government’s negotiation objectives and a guaranteed debate and vote for MPs on these objectives.
2. During negotiations: A high level of transparency, with regular release of negotiating texts after each round.
3. After negotiations: A guaranteed debate and vote for MPs on the final deal.
4. Throughout the process: Regular engagement with civil society, including environmental groups, businesses and trade unions, and the publication of an independent Sustainability Impact Assessment.

The process set out above would put democratic values at the heart of the UK’s trade policy after Brexit. Other trade policy concerns – ranging from the environment and data to development and human rights – can be dealt with far more effectively if the underlying framework is democratic, open and transparent. This should be a key priority for the government as it embarks on a new chapter in Britain’s long trading history.

2. The environment

Climate change presents the biggest challenge facing humanity, and is also a top priority for this government, which has committed to net-zero carbon emissions by 2050. Next year, the UK will host the COP 26 conference, which provides an opportunity for a radical new climate agreement between the world’s leading economies. A Joe Biden presidency in the US makes this vision even more tangible. However, despite broad consensus about the importance of tackling climate change, there have been few attempts to ensure that the UK’s post-Brexit trade policy is in line with these ambitions.

Trade policy impacts directly on the environment in a number of ways. In a general sense trade deals tend to act as a blunt instrument, aimed at increasing trade overall. This is problematic because it can lead, for example, to growth in high-carbon industries. However, the specific provisions of trade agreements can also mitigate against climate action. Two particularly important avenues are environmental regulation, including regulatory cooperation, and the use of investor courts to challenge environmental policies.

Environmental regulation

Approaches to regulation differ significantly between countries and the EU and the US have emerged as two different poles: the former gives greater weight to the precautionary principle, the latter to a ‘science-based’ approach. A significant policy choice for the UK as it negotiates new trade agreements is therefore which pole it chooses to align with, but it has yet to take a clear position. A number of provisions at the WTO already constrain the ability of member countries to regulate, for example by requiring that regulation be “no more trade-restrictive than necessary” for achieving “legitimate policy objectives.”^[4] These rules have, for example, already seen Canada scale back its renewables programme.

Trade deals tend to go further and increasingly aim to align regulations between countries, which can create a downward pressure on standards which are designed to protect the environment and lead to a ‘race to the bottom’. This is because trade deals are designed to promote trade rather than achieve environmental objectives: environmental chapters of trade agreements tend to be unenforceable, while regulations which limit trade – even if designed for important, environmental reasons – can be legally challenged and the findings of dispute settlement bodies enforced. Furthermore, trade deals increasingly include the establishment of ‘regulatory cooperation chapters’. In order to implement these chapters, regulatory cooperation ‘councils’ are established as forums for regulators from the different parties to meet and cooperate in the development of regulations in ways that promote trade rather than raise standards, sometimes with special access for business groups.^[5]

Investor courts (ISDS)

The UK is a signatory to various agreements that contain investor-state dispute settlement (ISDS) provisions, which allow investors to sue governments for introducing regulations, which harm their profits. ISDS has been used to challenge all sorts of environmental policies around the world; including a US firm challenging a ban on fracking under the St.Lawrence river in Quebec, a Swedish energy firm challenging water pollution regulations in Germany, various mining firms challenging restrictions on mining across the Global South, and threats to challenge measures to phase out fossil fuel use in the Netherlands.^[6] Evidence shows that ISDS has led to the US delaying the introduction of environmental regulations.

A better way?

Whilst the trade system has not so far responded adequately to the climate crisis, the foundation stones for action already exist. In the first paragraph of the founding agreement of the WTO, signatories recognise that trade rules should allow for “the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.”^[7] And whilst they are neither binding nor enforceable, there is an increasing trend to include environmental chapters in trade agreements.

Some countries are already choosing to build on these foundations to create a new model for trade agreements: New Zealand has teamed up with Costa Rica, Fiji, Iceland, Norway and Switzerland to negotiate an ‘Agreement on Climate Change, Trade and Sustainability’ (ACCTS). ACCTS is the first serious multilateral attempt at ensuring that trade does not lead to environmental damage. The UK should consider joining the deal and pushing for it to go further in terms of coverage and the enforceability of its provisions.

There are a number of tangible steps the UK could take to put climate at the heart of our post-Brexit trade policy. First, the UK’s new trade deals should be subordinate to our environmental commitments – including the Paris Climate Agreement. Shared ambitions on climate, biodiversity, energy, food and other standards should not be confined to the preamble or separate chapters of trade deals, which are unenforceable, but should be given equal enforceability. These chapters should make clear that trade deals are subject to the implementation by both parties of multilateral environmental agreements and that if trade measures put the parties in breach of those agreements, a specific process with potential sanctions will be triggered. Mechanisms that could be used to achieve enforceability might include: a process of mediation seeking to address issues amicably, a transparent arbitration process with opportunities for a broad range of stakeholders from both countries to engage and, as a last resort, the potential for unilateral sanctions to be imposed, for example the suspension of trade preferences including raising tariffs. Similarly, the UK should have a policy of conditionality, such that we only sign deals with countries that have signed and are implementing the Paris Climate Agreement. This would ensure that trade is prioritised with partners who share our values, and also provide an incentive for new partners to commit to climate action. It  could be applied flexibly for developing countries, or for partners who can demonstrate good progress, with accompanying support to help those that need it.

The UK should then undertake an environmental audit of the provisions of its rollover agreements with a view to ensuring all aspects of deals are aligned with its climate ambition and design the detail of its trade agreements to ensure that they support climate action. Some elements of trade deals are already clearly in contradiction with such action. Public outrage about ISDS, as well as opposition from environmental NGOs, has already encouraged some countries to rethink the investment provisions in their trade agreements. South Africa has cancelled all Bilateral Investment Treaties, New Zealand no longer includes ISDS provisions in its trade deals and countries like India and Malaysia are designing alternative approaches. The UK should similarly exclude ISDS from existing and future agreements. This would ensure that companies cannot challenge regulations which are essential for tackling climate change, including those on emissions, fracking, energy production and transport. Second, the UK should commit to avoiding regulatory cooperation in trade deals, as it is currently done, and instead seek standard-raising cooperation in alternative forums with full transparency and engagement from civil society. For instance, committing to dynamic alignment with the EU on environmental standards will be crucial after Brexit.

3. Human rights

The third pillar of a sustainable trade policy is human rights. The rise of authoritarian regimes, notably China, as well as division and fragmentation in Western democracies, pose a threat to human rights around the world. Trade is intertwined with human rights, and global supply chains can fuel large-scale abuses – from the mass incarceration of Uyghur Muslims in Xinjiang to modern day slavery in India. Evidence shows that Western multinationals are often indirectly implicated in these abuses: for example, recent research identified 83 well-known brands which benefit from the use of Uyghur workers caught in potentially abusive labour transfer programs, including Nike, Adidas, Google and Marks & Spencer.^[8] Similar concerns have been raised about labour rights in supply chains across Asia, Africa and South America.

Human rights are also intrinsically connected to sustainable development. As the world reels from the economic and public health impact of the COVID-19 pandemic, and prepares to confront the catastrophic impacts of climate change, developing countries are by far the most vulnerable. The UK has long been a global leader in international development, and Brexit could be an opportunity to build on this. Moreover, a poorly designed trade policy risks undermining the UN Sustainable Development Goals. However thus far there is little evidence that the Conservative government is taking up this opportunity. It has rolled over the EU’s preference scheme for the world’s poorest countries, which should help to provide continuity as the UK exits the EU. However, it has not taken the opportunity to improve these schemes, for example by offering more generous rules of origin to help support regional trade and make it easier for producers to benefit from the schemes. It has also agreed trade deals with Kenya and Cote d’Ivoire, rather than negotiating with regional blocs; this is hugely problematic as it will disrupt trade in the EAC and ECOWAS regions. Finally, the Government has not yet clarified whether it will seek to pursue negotiations on issues beyond goods, something that most developing countries have long resisted.

Trade policy has significant implications for trade and sustainable development. In addition to abuses in supply chains, trade deals can hinder the ability of governments to raise standards in areas such as labour rights, gender rights, economic justice and public health. ISDS cases have been used to challenge minimum wage rises and health measures such as bans on plain packaging for cigarettes and the introduction of a sugar tax.^[9] Provisions in areas such as services and procurement tend to be blind to the different impact of changes in those areas on men and women. Liberalisation of services can lead to increased privatisation or reduced provision of ‘less lucrative’ services or in poorer areas, which can in turn lead to increases in cost or a requirement for greater care in the home, the burden of which is more often borne by women.^[10]

The UK must put human rights and sustainable development at the heart of its post-Brexit trade policy. In practice, this will require a number of changes: first, trade negotiations with developing countries must prioritise the countries’ development objectives and be done in such a way as to facilitate regional trade; for instance, the UK should offer the same preferences and opportunities to all countries in the East Africa trade bloc, rather than negotiate trade agreements which have the potential to lead to a ‘race to the bottom’ on standards and tariffs. In order to achieve this, the Department for International Trade needs to continue to operate in partnership with former DfID staff in the newly formed Foreign, Commonwealth and Development Office (FCDO). Second, the UK must develop a clear strategy for its relationship with developing countries through a transparent process which engages with civil society in the UK and developing countries, including trade unions, NGOs and businesses to ensure a broad range of interests are represented.

Lastly, prioritising human rights will require looking beyond trade. The UK should support recent efforts at the UN for a Binding Treaty on Business and Human Rights and consider primary legislation to enforce compliance amongst British companies operating overseas, as well as bilateral action with the EU. As things stand, human rights chapters in trade agreements tend to be unenforceable, and the UK is very willing to conduct trade with countries whose leaders have been accused of gross human rights abuses, such as Saudi Arabia.^[11] As with climate change, enforceable chapters in trade deals as well as rights-based conditionality for trade will be essential for ensuring that our trade policy protects human rights.

Taking back control

Brexit gives the UK a once in a lifetime opportunity to reimagine our trade policy. Now is the time to decide what values should be enshrined at the heart of our trading system and pursue cooperation with our neighbours in addressing the global challenges ahead. Chief among these are climate change, the defence of human rights and sustainable development. The UK must take these challenges seriously and join with countries and initiatives that are already seeking to address them. Taking back control of trade policy, if done well, could lead to a better future for people and the planet.

Ruth Bergan is Senior Adviser at the Trade Justice Movement. She has worked in trade policy for over ten years and has written in-depth reports on trade with the US and developing countries, investment protection provisions and the implications of trade policy for action in areas including climate change and gender equality. She has previously worked in the areas of labour rights in international supply chains, migration and gender equality.

David Lawrence is Senior Political Adviser at the Trade Justice Movement. He previously worked in Parliament for a Labour MP and studied at Oxford and the London School of Economics. He has written on trade, politics and foreign policy for the Independent, Politics Home and Foreign Policy Centre.

^[1] See, for instance, analysis done by Ha-Joon Chang on the British Empire’s use of tariffs; Chang, Ha-Joon. 2002. Kicking Away the Ladder: An Unofficial History of Capitalism, Especially in Britain and the United States. Challenge 45:63–97.

^[2] YouGov, Results – US Trade Deal, June 2020, https://docs.cdn.yougov.com/1xr2pyf6fi/YouGov%20-%20US%20trade%20deal%20Results.pdf; Unchecked UK, Attitudes of Younger Leave Voters to Regulation and Deregulation, May 2020, https://www.unchecked.uk/wp-content/uploads/2020/05/Attitudes-of-Younger-Leave-Voters-to-Regulation-and-Deregulation.pdf

^[3] Agriland, RSPCA poll reveals 75% want ban on lower welfare standard imports, August 2020, https://www.agriland.co.uk/farming-news/rspca-poll-reveals-75-want-ban-on-lower-welfare-standard-imports/

^[4] World Trade Organization, Agreement on Technical Barriers to Trade, 1995, https://www.wto.org/english/docs_e/legal_e/17-tbt_e.htm

^[5] David Lawrence, Dynamic Alignment and Regulatory Cooperation between the UK and the EU after Brexit, Trade Justice Movement, September 2019, https://www.tjm.org.uk/documents/briefings/TJM-Dynamic-Alignment-and-Regulatory-Cooperation-after-Brexit.pdf

^[6] Details on ISDS cases brought against environmental regulations can be found in: Ruth Bergan, Shaping Future UK Trade Policy: Investment Protection Provisions, Trade Justice Movement, September 2020, https://www.tjm.org.uk/documents/briefings/Shaping-Future-UK-Trade-Policy-Investment-Protection-Provisions.pdf

^[7] World Trade Organization, Marrakesh Agreement Establishing the World Trade Organization, 1994, https://www.wto.org/english/docs_e/legal_e/04-wto_e.htm

^[8] Business and Human Rights Resource Centre, China: 83 major brands implicated in report on forced labour of ethnic minorities from Xinjiang assigned to factories across provinces; Includes company responses, March 2020, https://www.business-humanrights.org/en/latest-news/china-83-major-brands-implicated-in-report-on-forced-labour-of-ethnic-minorities-from-xinjiang-assigned-to-factories-across-provinces-includes-company-responses/

^[9] Ruth Bergan, Shaping Future UK Trade Policy: Investment Protection Provisions, Trade Justice Movement, September 2020, https://www.tjm.org.uk/documents/briefings/Shaping-Future-UK-Trade-Policy-Investment-Protection-Provisions.pdf

^[10] Trade Justice Movement, Patriarchy and Profit: A feminist analysis of the global trade system, September 2018 https://www.tjm.org.uk/resources/reports/patriarchy-and-profit-a-feminist-analysis-of-the-global-trade-system

^[11] Patrick Wintour and Luke Harding, UK on collision course with Saudis over new human rights sanctions, The Guardian, July 2020, https://www.theguardian.com/law/2020/jul/06/dominic-raab-to-annouce-uk-sanctions-against-human-rights-abusers