Richard North, 19/07/2016  

One of the most depressing things we now have to confront is a long hot summer of media froth about the "trade deals" that the UK may or may not be able to do, now that we are (or perhaps not) leaving the EU.

What makes it so depressing is the sheer tedium of rehearsing the same old arguments that we have been listening to for decades, whence a newly independent UK supposedly will be able to spring on to the world stage and sign up no end of agreements with nations which hitherto have resisted the blandishments of the EU – countries such as Canada, the United States, Australia, China and even India.

The problem for me is that this represents at several levels the almost complete lack of vision of the "leavers". They are seeking relationships which largely have ceased to have any great relevance, while betraying a profound ignorance about the way international trade really works. They seem to have little idea of where we should be heading to make matters better, or how to exploit our coming freedom.

Pete has a go at this in his latest post, observing that the EU is "stuck in the last century with deals like TTIP" – something we also see in UK politicians. We could, he says, be forging ahead using state-of-the-art trade practices, in which context he offers us the extremely pertinent aphorism: "If we are not talking about regulation and trade facilitation then we're just not talking about trade".

"Our politicians", Pete adds, "need to wake up to this amazing opportunity and to stop fixating on bilateral deals. Things are done differently now and it's time to get with the programme".

The trouble is that, when I tried to explain something of this to the Treasury Committee, telling them that the likes of United States and China had multiple trade deals that didn't register on their radar, all I got from the Chair was the dismissive: "We are in danger of losing the thread, wood for the trees and all that…", followed by seemingly endless discussion about TTIP and conventional trade deals.

Yet some of the most exciting developments in international trade (and some of the most disturbing) were inter-institutional agreements promoted by non-state actors - the so-called new multilateralism. Since these are mostly to do with trade facilitation and are so rarely mentioned, you might get a sense of why I found that response so frustrating.

It actually occurred to me as I listened to the jargon-filled drone from fellow witnesses that the trade "professionals" have become part of the problem. Trade negotiations have become an industry in itself, the protracted discussions becoming part of one vast, self-perpetuating international job-creation scheme.

It was left to me, therefore, as the only one who even mentioned trade facilitation. Compared with that, there were 31 mentions of TTIP – an agreement that's going nowhere and is never going to happen.

Such is the poverty of the vision, however, that all this time is expended on something which the European Commission claims could boost the EU's economy by €120 billion, the US economy by €90 billion and the rest of the world by €100 billion. This is trivial when we consider WTO estimates. They argue that bringing global trading up to best practice on trade facilitation could increase global GDP by $1.3 trillion. That, on a pro rata basis, would add $60 billion to the UK's economy alone.

But then, trade facilitation is all about detail - something these people don't do. Yet detail matters. One-screen systems and the digitalisation of customs documentation alone could save billions – without any of the sovereignty issues raised by TTIP, or the angst involved in accepting Investor-State Dispute Settlement (ISDS).

To get a sense of where the savings might accrue, and what needs to be done, needs our politicians to break out of their mental straitjackets and for them to accept that there is a considerable variety of solutions which they need to address.

Some of these we deal with in Flexcit, where I draw attention to the dull-sounding typology of International Regulatory Cooperation (IRC) mechanisms where, of the eleven categories identified (illustrated above), only one encompasses the traditional trade agreement. Of these eleven categories, the pioneering work of UNECE and its Working Party (WP.6 )on Regulatory Cooperation and Standardisation is far more important.

There are significant gains to be made from pursuing opportunities outside the traditional frameworks, and some gains to be made from adopting a more considered multilateral approach, as opposed to looking for the sort of bilateral deals which are dominating the discourse.

Leaving the EU affords us the opportunity to rethink entirely that nature of our trade policy, and also to think about how we re-integrate trade with other policy domains, after their enforced separation under the aegis of the European Union. Arguably, the greatest damage done by the EU is in forcing policy separation when such matters as trade, aid, defence and migration policies should be closely coordinated.

Unless we can broaden our thinking, many of the supposed advantages from leaving the EU will not materialise, and one of the starting points should be to consider whether actually want to devote any time and energy to negotiating new bilateral trade deals.

When you consider that the current TTIP negotiations stem directly from the Transatlantic Declaration of 1990, they have effectively been in progress for 26 years. As such this typifies the "big bang" approach to trade deals, throwing everything into the pot to achieve some vast deal that never comes off.

An accumulation of modest, unspectacular advances, such as the development of a globally harmonised system of medical device identification could have a far greater effect – and be less demanding on overall resources.

It is far more productive, in our view, to consider "unbundling" and then seeking to secure this type of sectoral or even product-based agreement, preferably on a global scale, and specifically not geographically rooted.

So far though, there is not the slightest trace at official level of any serious thinking on trade policy. We seem to be heading for multiple rounds of "same old, same old", with imagination and innovation taking the back seat. And thence comes the onset of depression. What could be so exciting and energising is at risk of turning into an exercise of studied tedium. 

There is a vital need, as Lost Leonardo says, to think beyond the bubble.

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