How to negotiate a trade agreement

CRASH COURSE: Brexit means Brexit - and that means negotiating our own trade agreements with other countries for the first time in 40 years. So how can we make a decent fist of it?

by Alexander Garrett
Last Updated: 06 Sep 2016

Get the full picture. Before initiating any trade negotiation you need to understand the state of your own economy, says Dennis Novy, professor of economics at Warwick University, and former adviser to the House of Lords. 'That means having a close consultation with different groups: both industry and also consumer groups who will be impacted.'

Put the EU first. 'I would start with the future relationship between the UK and the EU, and more specifically the possibilities and strength of access to the internal market,' says Peter Balas, senior policy adviser at lawyers Covington, and former deputy director general, DG Trade to the European Commission. 'That will define to a very large extent what kind of agreement it can form with other countries and with the World Trade Organization. For any partner country the first question would be: do I get access just to the UK market with 65 million, or to the EU market with up to 500 million people?'

Mind the experience gap. The EU has 600 trade negotiators, Canada has 300, and the UK has approximately 20, according to Sir Simon Fraser, former permanent secretary at the Foreign Office. 'You can train people in techniques and case studies and so on, but a real trade negotiator is not born, they are formed through years of experience and learning through practice,' says Balas.

Outsource - with care. New Zealand has offered some of its experts to help us out. 'New Zealand certainly has a good knowledge of the EU both through the WTO and through bi-lateral relations, but to what extent they know the UK internal conditions and are able to represent the UK effectively is difficult to say,' says Balas. A first step should be to bring back the few experienced hands we have from Brussels.

Be realistic. We're not just at the back of the queue for an agreement with the US, we're not even in the queue and can't start formally negotiating until we have actually left the EU. 'Getting anything through Congress is a heavy lift and for the US the two big ones are the Trans-Pacific Partnership with Asia and the TTIP with Europe,' says Novy. 'China thinks the UK is a small country, so it is a delusion to think they will be in a hurry to do a deal.'

Look for synergies. For cultural reasons, the Commonwealth may provide more fertile ground. 'Economic studies consistently show that among the determinants of greater trade are historical ties, shared language and institutions,' says Linda Yueh, adjunct professor of economics at London Business School.

Do say:

'We will spare no resource in working towards new trade agreements with our partners that will provide the greatest long-term benefit to the UK.'

Don't say:

'We can do deals with our trading partners, and we can do them quickly.' (David Davis)


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