Trade and regulation after Brexit

The government will not be able to conclude a large number of trade agreements at speed and maintain its much-prized regulatory autonomy after Brexit.

The report says prospective trading partners are likely to tell the UK to change its standards if it wants a trade deal.

The importance of trade deals as a ‘prize of Brexit’ makes the UK particularly vulnerable to such pressure. But even though it is now negotiating four new trade agreements and 18 ‘rollovers’ of existing EU deals (not to mention a comprehensive agreement with the EU itself), the government still lacks a firmly agreed position on many of the issues it will face.

This weakens the government’s hand in talks with its partners, and also sets it up for trouble at home. The continuing row over ‘chlorinated chicken’ highlights public concern about lowered standards. Tensions between the governments in London and Edinburgh over changes to food standards are high. At a time of mounting strain on the Union, this is situation the government can ill afford.

The government has made an ‘unforced error’ in launching into complex trade negotiations before it had established a domestic regulatory approach. The new IfG report sets out how it should correct this so as to maximise the benefits and minimise the costs of its regulatory trade policy. The government should:

• Clarify its red lines: visible disagreement between government departments on issues such as food standards can no longer be tolerated.
• Set up stronger decision-making structures internally: more authority below the top level of government, with greater involvement from arm’s-length regulators, would allow issues to be resolved more efficiently.
• Allow parliament greater powers of scrutiny: negotiators will benefit from being able to point to difficult stakeholders back home.
• Adopt a more co-operative approach with the devolved administrations: the government must avoid a showdown between it and, in particular, Edinburgh.