Building a trade profession in government

The worldwide search is over.

On Friday the Government announced that Crawford Falconer, a New Zealander, would join the Department for International Trade (DIT) as Second Permanent Secretary and head of the new trade profession. The original idea had been to find someone fitting that description to head up the department, but the final decision was to give the post to a Whitehall insider rather than someone who had conducted trade negotiations. The Second Permanent Secretary role was designed to complement the first.

Crawford Falconer appears to have the CV the Government needs for this role. He has extensive trade experience in New Zealand and at the World Trade Organization (WTO) – and trade negotiation is an area which puts a premium on having been in the room. New Zealand has conducted a successful strategic trade policy over the last 30 and is one of the models the UK should look to. Falconer is also currently Professor of Global Value Chains at Lincoln University: understanding the way UK value chains have evolved over the 40 years since the UK joined the EU is important too.

Recruit and retain

Over the weekend there were reports that some of the international talent the UK sought to lure was deterred by the salary on offer. We haven’t yet been told whether DIT had to make good on the offer to pay in excess of the Permanent Secretary’s salary in this case. But the Government needed to be sure it didn’t make pay a barrier to getting the best candidate.

But pay is not just an issue for the top negotiator. As we argued in our paper on building trade capacity in government, one of Falconer’s first tasks will be to build, and retain, a cadre of specialist trade negotiators. Three-year postings in trade negotiating teams, followed by a move to another unrelated job, will put the UK at a serious negotiating disadvantage. So, DIT needs to assess what it needs to both recruit and crucially incentivise people to stay and build their expertise.

Latest data suggests that pay is a concern for DIT staff. It is impossible to distinguish the negotiating cadre, or even the 300 officials in the Trade Policy Group, from the rest of the department, but the latest figures show that civil servants in DIT are the least happy in Whitehall with their pay, with only 21% satisfied compared to a civil service average of 31%. Moving between departments is one way civil servants can improve their pay – and the department must be able to retain the talent it attracts and the expertise it builds.

But is there a job?

Falconer’s role – and indeed the need to build a trade profession – are predicated on the assumption that the UK will run an independent trade policy post-Brexit. His recruitment took place before the election and was on the basis of the policy set out by the Prime Minister at Lancaster House of leaving the Customs Union, confirmed by Brexit Secretary David Davis yesterday and Chancellor Philip Hammond today.

The scope of his role would be circumscribed, but far from eliminated, if we stayed inside the Customs Union for a long transition. But, even if we did, the UK would still need to establish its own position at the WTO and its own trading arrangements in areas not covered by the Customs Union. The EU-Turkey Customs Union, for example, covers only goods and excludes agricultural produce and services.  

The asymmetry of a customs union arrangement also means the UK would need to negotiate access to third countries who already have deals with the EU without being able to offer UK tariff reductions on goods covered by the Customs Union.  

But the fact that we have a trade negotiator and an international trade department should not dictate UK Brexit policy. They are essential players in the Government’s current Brexit plan, rather than reasons to stick with it if the assessment of the politics or economics changes. If the plan changes, so can personnel and government departments.