Richard North, 06/05/2016  
 


It's election time again but, compared with the forthcoming referendum – where we decide who really governs us - these polls are an irrelevance. In fact, I cannot recall any time when I've been less interested or enthused by such events.

With such a short period for the referendum campaign, to have also to deal with a complex of local and PCC elections, Scottish and Welsh Assembly elections, and a couple of by-elections thrown in, is an unwelcome distraction. At the very least, it has put the referendum campaign on "pause" while the commentariat entertain themselves at our expense.

With or without these elections, though, it seems to me that the referendum campaign has stalled. On the Vote Leave side, the narrative has foundered on the single-shot NHS meme, which seems less convincing with every one of the thousands of repetitions. The Remains, meanwhile, are flooding the ether with torrents of increasingly tedious FUD.

What struck me about our side is that we should be making far more of the globalisation issue, capitalising on the sterling work done by Pete North, Ben Kelly and others, especially the likes of Lost Leonardo with his excellent piece on "rediscovering our global voice".

But there is a perspective here that so far has not received anything like enough attention – the tension between bilateralism and multilateralism in trade deals. The former is reflected in the growth of bilateral agreements, as in Regional Trade Areas (RTAs) also known generically as Free Trade Areas (FTAs), as opposed to the range of global agreements hosted through GATT and then the World Trade Organisation (WTO).

In what is a very contentious subject, one can quote diverse sources, some from interesting origins, that suggest that the true interests of global trade are served not by bilateralism but by multilateralism. Even the august Economist noted, back in 2013, that regional trade liberalisation is better than no liberalisation at all, "yet it interferes with globalisation in several damaging ways".

Insofar as there is consensus, it is that the multilateral approach is the preferred method of trade liberalisation, as opposed to "exclusionary" (and often selfish) regional trade blocks. Some academics will argue that the "preferential trade agreement" is a stumbling block, preventing the proper development of the multilateral trade system.

Here, the "leave" campaign has missed a trick. Rather than lauding our ability to make our own (bilateral) trade deals once we leave the EU, it could instead be speaking up for multilateralism, breaking clear of a failed (or failing) system that is holding back the global economy.

That is not to say that we could rely on what is known as the "WTO Option". Contrary to the views of many ill-informed commentators, there is not a single advanced economy in the world that relies exclusively on WTO rules. Most rely on a mix of bilateral and multilateral agreements. Only the most advanced, as in the EU's Single Market, is there complete reliance on regional agreements.

Thus, for the time being, a post-Brexit UK would have to continue the skein of bilateral agreements, just to maintain current trade flows. But, rather than seeking to replace the EU's external trade deals with our own agreements, we should be committed to supporting the global system.

To that effect, we should be building up the Bali Trade Facilitation Agreement, implementing its provisions on a global scale, rather than focusing on stitching up the system between trade blocs, as in TTIP.

The interesting thing here is that multilateralism seems to be able to rely on intergovernmental agreement – free cooperation between sovereign nation states – while regional deals increasingly rely on compulsion, taking on aspects of supranationalism, with mandatory harmonisation and dispute systems with supreme powers.

Furthermore, the multilateral approach is potentially far more valuable. While TTIP is said to be worth £10 billion to the UK in enhanced trade, implementation of the trade facilitation deal is said to be worth globally $2.6 trillion in annual GDP enhancements, with the UK share topping $60 billion.

Not only can multilateralism be adopted without the same hazards to sovereignty and democracy, therefore, it is potentially far more valuable than the bilateral route.

The trouble is for the "leave" campaign, though, that it is totally compromised. Looking internally at narrow domestic savings, it fails to see the bigger picture and argue that the greatest financial gains come from re-engaging in the global trading system, rather than seeking to emulate the EU with a replacement network of regional trading agreements.

The other problem is that very few people realise how much damage has been done to the multilateral system by the selfish focus on RTAs. Had the "leave" campaign been on top of its game, it could be arguing for a truly global perspective in world trade, thus by-passing the naysayers who warn how difficult it would be for the UK to replicate the EU's network.

Yet another problem is the "leave" campaign's obsession with deregulation. Wrongly claiming that there are massive savings to be made by abolishing EU laws, it is totally compromised when it comes to arguing that the real savings come from harmonisation on a global rather than European level.

However, it is not too late to refocus the campaign. In the seven weeks left, we can make it clear that a Britain supporting global multilateralism is better for us, and better for the world - as indeed Lost Leonardo has been doing. The EU as a regional trading bloc is a cul-de-sac. We need to break clear and rejoin the world.






comments powered by Disqus











Log in


Sign THA





The Many, Not the Few