IfG calls for clearer Whitehall structure for trade talks as it warns of ‘recipe for disaster’

Simultaneous trade negotiations could overwhelm existing structures, says think tank
Department for International Trade (DIT) sign - credit DIT

The government's failure to set out red lines on key issues in the post-Brexit trade talks is a “recipe for disaster” and could delay new trade agreements, a leading think tank has warned.

A report by the Institute for Government said ambiguity over the UK’s stance could lead to pressure from potential trading partners to lower standards, and called for a clearer Whitehall structure to manage talks with the EU and other partners.

The latest round of talks with the European Union on a post-Brexit agreement broke up with “substantial areas of disagreement" still remaining, with just four months before the transition period between Britain and the bloc ends on 31 December. 

“Three years ago we warned that the government had not set up the necessary structures for effective decision making on key trade policy issues,” said IfG researcher Maddy Thimont Jack.

“The government did not heed that warning then, but it now needs to move urgently to put them in place. Otherwise, it will find itself losing control of trade and regulatory policy to better-prepared partners.”

The IfG report claimed Britain has made an “unforced error” in entering talks with the US, Australia, New Zealand and Japan before reaching a firm decision on what type of deal it wanted.

And the think tank suggested that indecision under Theresa May’s government meant “the UK’s red lines became progressively pinker and the EU was able to set the agenda”. 

Rows over ‘chlorinated chicken’ imports in future US trade deals highlighted public concern over such regulatory change, the IfG added, while reports of tension between government departments over such animal welfare issues were a “bad sign” for future trade talks.

It is now urging ministers to publish a broad statement on the UK’s approach to serve as “guidance” for regulators and “strengthen the government’s nerve” when defending controversial decisions. 

A new decision-making structure is also needed, the think tank adds, as the current system is too “top-heavy” and risks overwhelming the EU Exit Strategy Committee – known as XS and which oversees trade negotiations – and the Department for International Trade (DIT).

“A group chaired by the prime minister and attended by the foreign secretary, home secretary, chancellor and minister for the Cabinet Office necessarily has limited time and attention to spare,” the report added.

“The lack of a clear and empowered structure underneath it has already meant that relatively minor trade policy decisions have gone to the most senior levels.”

The report highlights that beneath the cabinet committee, and a corresponding EU exit strategy group of officials, there is an ad hoc structure of various officials’ groups, including Trade Policy Steering Board, an agri-food trade board,  and drafting groups.

By contrast, the US trade negotiating structure includes a trade policy review group beneath its cabinet committee, as well as a trade policy staff committee and sub committee. Each group has its own area of responsibilities, with issues only passed up the chain if there is no consensus.

The IfG also warned that the large number of simultaneous trade negotiations that the UK is pursuing could overwhelm such a small group of ministers. “Its small size will also make it difficult for it to deal with technical regulatory questions. No.10 should set out a clearer decision-making structure below the top level and give it parameters within which it can take decisions without having to go back to XS”.

Responding to the report, a government spokesperson said: “This report is misleading. The UK government makes decisions about our own domestic regulation – not our trading partners.

“We have published our negotiating objectives which are clear that we will never sign a trade deal that compromises our high environmental protection, animal welfare and food standards.”

Eleanor Langford is a reporter at PoliticsHome, where a version of this story first appeared. Richard Johnstone is the acting editor of Civil Service World.

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