[ad_1]
LONDON – When the United Kingdom voted in favor of the exit of the European Union in 2016, the British government had no chief negotiator on trade and had only a handful people engaged in trade policy. In the context of the EU, Great Britain has not been able to conclude its own trade agreements since the 1970s.
Prime Minister Theresa May promised that this would change after Brexit. In order to reorganize its new International Trade Department, the British government hired Crawford Falconer, a sad and talkative trade expert from New Zealand, one of the most trade-friendly countries in the world.
To make the new unit a central bargaining unit, the government has recruited about 400 people, set up a bargaining school, launched simulations of trade negotiations with the United States and invited retired British trade specialists to share their advice.
But there is a problem: on Brexit Day, Mr. Falconer's team will probably not be able to conclude meaningful free trade agreements. This is one of the points of contention that contributes to fueling the stalemate this week between Britain and the EU on the shape of their relations after Brexit.
Britain may have to agree on an EU departure that requires it to remain in the customs area of the trading block for many years. This would imply that the United Kingdom would accept the EU tariff, which would significantly restrict its ability to conclude free trade agreements with the United States and Japan.
It's "not at all clear" when the UK will be in a position to negotiate big trade deals, said Stephen Adams, a partner at Global Counsel.
Falconer is indifferent to the prospect of an agreement on Brexit that would prevent the United Kingdom from concluding trade agreements around the world. "There is no reason for me to suddenly fear Plan B for something that is not the policy of the government," he said in an interview.
Mr Falconer, a bearded trade veteran with a pronounced taste for fine wine and medieval architecture, arrived in Britain last year with the reputation of reducing trade barriers and abrasive management.
"Crawford is a strong meat," says a New Zealand acquaintance. He learned the nuts and bolts of the 1980s by helping to implement a trade liberalization program that made New Zealand one of the most open and competitive agricultural markets in the world.
After serving as New Zealand's Ambassador to the World Trade Organization, he is interested in academia. Following the Brexit referendum, the British government sought in its former empire one of the main trade negotiators to seal the trade agreements once it had left the EU.
Mr. Falconer was approved after the first choice, a Canadian, who refused the job, according to people familiar with the subject. EU officials said Falconer had done a good job at the WTO, but were surprised that Britain had chosen an inexperienced negotiator to conclude bilateral trade agreements.
The newly created commercial department has prepared itself for its big moment by attracting a new cohort of trade experts from the British civil service and beyond. The online training was designed to give staff at all levels of government an intensive course on the basics of world trade. Officials are looking for figures to determine what the UK exports and imports from various markets. But last year, the trade unit did not spend its entire budget of 41 million pounds ($ 54 million) because it could not recruit enough staff.
Falconer said his department was "mostly people who did not have a lot of experience" in the business but were smart and "just wanted to participate". He fears that his fresh-faced crew will be dismantled by seasoned negotiators from the US or the EU.
The Anja container ship arrives in the harbor of Immingham, in East of England, earlier this month. The Brexit has brought hope to the windswept docks of the Humber River, a key freight gateway in northeastern England that is now investing to prepare for a potential increase in shipping.
Photo:
lindsey parnaby / Agence France-Presse / Getty Images
"There is a lot of professional obscurantism about trade policy and how complicated it is," Falconer said. "Those of us who have been doing it for some time have every interest in pretending that you must be admitted to its sacred mysteries."
Recently, Falconer was in the basement of an office in central London, exposing his vision to a crowd of British lobbyists. His team aims to sign trade agreements with the United States, New Zealand and Australia, among others, he told them.
Several members of the crowd pointed out that politics could hinder this vision. Britain must leave the EU in March next year. If the negotiations proceed as planned, then there will be a 21-month transition period during which, to facilitate its exit, the country will remain de facto in the trading bloc.
Meanwhile, the UK can negotiate but not finalize trade agreements with other countries. The problem for Mr. Falconer is what happens next.
Until countries know whether or not the UK remains in the EU customs union after the transition, they will probably not want to conclude trade agreements, said Mr. Adams.
They will also want to see what trade agreement the UK has with the EU, its largest trading partner, before starting their own negotiations, he added. That may be a good thing: Canada took about seven years to conclude a trade agreement with the EU, and its trade with the bloc is only a fraction of that of Britain.
George Hollingbery, left, the Minister of State for Trade Policy, and Mr. Falconer answering questions about post-Brexit trade agreements in Parliament in July.
Photo:
ho / Agence France-Presse / Getty Images
Mr. Falconer says that he is not sitting on his hands. The United Kingdom must also renegotiate the 40 or so existing free trade agreements in which it has participated as an EU member.
It means going to each of these countries, including Canada and South Korea, to formalize new treaties. Falconer said he was "making good progress with a number of them and working with others".
If the UK is prevented from concluding trade agreements for goods in the coming years, it can focus on promoting trade in services. In particular, it could find ways to have regulators in different countries cooperate on mutually agreed rules to help UK companies do business there, for example. Although service talks are possible, "general service agreements do not really exist," said Sam Lowe, a researcher at the Center for European Reform's think tank.
"Large-scale free trade agreements give you more political leverage to do more things," said Falconer. "But there are alternatives."
-Emre Peker in Brussels contributed to this article.
Write to Max Colchester at [email protected]
