One of the frustrations watching the debate around trade policy in the UK, e.g. during the recent debates on the Trade Bill and Agriculture Bill, is the assertion that everyone will win from liberalising trade and striking trade deals. It’s nothing but sunlit uplands. 1/
Obviously, the proposed value of “free trade” is that there’s a net gain for an economy, which extends to a net gain for trade partners and ultimately for the world if you have an effective, properly policed multi-lateral system. 2/
BUT, its well established that there are always winners and losers from free-trade. When you liberalise trade, someone gains, someone loses, and the intention is to maximise the former and minimise damage to the latter. 3/
So rather than pointing to everyone and saying “this trade deal” is going to work for you, UK politicians need to be honest. It would be more truthful to say, ““we believe that, overall, a trade deal with country X will be in the UK’s interest. But some of you will suffer.” 4/
Instead, in keeping with so much of UK political discourse over the last four years, the trade off is never admitted. The idea that a policy decision may have risks or downsides is forever ignored. 5/
When it comes to UK agriculture, this distinction between winners and losers is true as well. There will be parts of our sector that will benefit from trade deals and reciprocal trade liberalisation. But some will not. 6/
This isn’t a case of domestic producers being overly-defensive. It’s a simple economic reality. Where factors of production are scarce, free trade can have negative effects. Where they are abundant, free trade has benefits. 7/
Farmers in different countries will take different views on free trade depending on their specific economic circumstances. High cost models (including where those costs are imposed by the state) will struggle against lower cost models of trade partners. 8/
So, what’s the plan to help those who lose out to adjust and mitigate the damage? What broader policy is being put in place to assist this? There isn’t one. Because that simple truth hasn’t been admitted (by politicians at least). 9/
If politicians really value UK agriculture and their farmers and want to ensure they have a great future as was stated consistently this last week, they should be much more circumspect about the trade policy this current government advocates. 10/
And they need to be straight with our farmers – these trade deals and overall trade policy might not work out for them. It might be the price we pay for benefits elsewhere in the economy. 11/
So lets have a much more honest dialogue – what is the long term vision for UK food supply, where do domestic producers fit into that, and what are the implications for rural communities and our farmed environment? /end
PS – there’s much been written about “winners and losers” from free trade. As a primer, I recommend the excellent (if simplified) explanation in the penultimate chapter of this very good book:
amazon.co.uk/Splendid-Excha…
It’s a good read in itself (and by a “pro-free trader”)
amazon.co.uk/Splendid-Excha…
It’s a good read in itself (and by a “pro-free trader”)
PPS – I’m obviously not naïve about the reasons government isn’t being straight about “winners and losers”. But more broadly I’m not sure many politicians understand the implications of government trade policy. And at some point it will come home to roost.
