Post-Brexit trade deals need more scrutiny to stop Britain being stitched up

She’s known in some quarters as “Brexit superwoman”, the minister who gets things done, unlike the general faffing around we see among many of her Cabinet colleagues.

So much of a darling of the Conservative Party has Liz Truss become that she is today widely thought of as a possible future leader, and therefore prime minister – this despite the fact that in the run-up to the vote on membership of the European Union, five years ago this week, she was on the Remain side of the debate. Yet heaven rejoices in the sinner who repents, and there is today no doubting her leanings; she is even more Brexity in her outlook than some of the movement’s founding fathers.

Since taking on the job as International Trade Secretary nearly two years ago, she’s managed to negotiate trade deals covering nearly 70 countries, and now has her sights firmly set on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which would bring the UK into one of the world’s largest free trade zones.

The vast bulk of these deals are admittedly just rollovers from pre-existing European free trade agreements, but they’ve all been done in double quick time, and in many of them she has managed to negotiate a little extra something for the UK’s own specific economic needs. She has also now achieved the first trade deal negotiated entirely from scratch – Australia – and promises more. For the sheer energy she brings to the table alone, she cannot be faulted.

Yet in “getting things done”, she enjoys a considerable advantage over colleagues, hemmed in as they are by the demands of political compromise and parliamentary accountability.

Like all UK treaties, free trade agreements are an executive competence, and don’t have to be put to a parliamentary vote. Parliament eventually gets the right to take a look at the deal, but only after it is in effect a fait accompli. This marks Britain out from the US, where FTAs are subject to congressional approval, and the European Union, where they are similarly subject to European, and indeed often local, parliamentary approval.

The downside of such scrutiny is that it tends to make trade agreements very much more long-winded, compromised and difficult to achieve. Without such oversight, you can move more swiftly, at least with countries such as Australia, where trade deals are likewise an executive responsibility.

Yet there is also a certain irony in the power Truss now enjoys; if taking back control is meant to be about democratic accountability, the fact is that trade deals were arguably more beholden to elected representatives while Britain was still a member of the European Union than they are now that we have left.

Liz Truss was one of the principle architects of the UK-Australia free trade deal Credit: Simon Dawson / No 10 Downing Street

I mean this last point slightly tongue in cheek, and certainly don’t want to exaggerate the argument. As it happens, the free trade agreement with Europe was indeed put to a UK parliamentary vote, and there is little doubt that the Australian one, which on the face of it (we don’t yet know much of the detail) is a perfectly good deal, would also sail through largely untouched if similarly subjected to the say so of MPs.

Even so, there is an obvious danger in what’s going on – that quality and accountability is being sacrificed to speed and quantity. Freedom to negotiate our own FTAs was meant to be one of the big economic upsides of Brexit, so Truss is under intense pressure to deliver. The upshot is all too often a triumph of trophy seeking, Brexit validating PR over substance and enduring economic gain.

In recent years we’ve seen a big backlash globally against free trade, which is widely viewed as the handmaiden of Big Business interest to the disadvantage of local jobs and community. Free traders can seem the very embodiment of neo-liberal, citizens-of-nowhere thinking.

Brexit was in part a reflection of that backlash, with voters rejecting the demands of Europe’s single market in favour of a more nationalistic, self-contained approach to economic policy. I doubt they had the further loosening of national protections necessitated by the unbridled pursuit of free trade with the rest of the world, with all the backroom compromises and trade offs it involves, much in mind when they made that choice.

It is therefore vitally important that FTAs are pursued in a transparent and accountable manner, which takes fully on board the interests, fears and concerns of domestic constituencies and affected sectors. The battle for free trade needs to be won as much at home as abroad.

There is no better way of doing this than via parliamentary scrutiny, debate, and ultimately, a simple yes or no vote. The Government’s “Strategic Trade Advisory Group”, which is meant to provide the external expertise demanded, is widely thought ineffective and generally out of the loop. Better for the country to take its time to get things right than rush into deals we live to regret.

None of this is to belittle the potential upside of the free trade deals the Government seeks. Truss became so fed up with the Government’s own official impact assessments, which invariably show vanishingly small benefits, that she commissioned a review of the “black box” methods used to compile them. This is understood to have recommended key changes to the “general equilibrium modelling” the Treasury and others have applied.

As argued by Graham Gudgin, chief economic adviser to the think tank Policy Exchange, a less abstract, more pragmatically driven approach can plausibly come up with much larger gains. By the same token, he argues, the established methodology tends substantially to exaggerate the benefits of the EU’s single market, and therefore the economic downside of leaving it.

All the same, recent trade figures showed a worrying collapse in post-Brexit net trade with the EU, and particularly exports. This cannot be attributed solely to the challenges of Covid, since trade with the rest of the world has bounced back solidly. Greater restrictions must be the overriding explanation.

Trade with the rest of the world is going to have to grow very considerably over the years ahead to fully compensate for this loss. The pressure is on, yet in the dash for easy wins, the Department for International Trade risks selling the nation down the river. We need to know far more than we are being told, on both strategy and detail.