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Analysis
Expect trade rows after Brexit

Expect trade rows after Brexit

Domestic politics will lead to protectionism

by Denis MacShane in London

Wed 18 Apr 2018

British politicians, journalists and think-tanks have not had to worry about trade issues for decades. Since the signing of the Treaty of Rome in 1957, trade has been a competence of the European Union and its antecedents. When the UK joined in 1973, it transferred authority over trade matters to Brussels.

Before June 2016, when Britain voted to leave the EU, few UK members of parliament or journalists could explain the term 'customs union'. Today's line is that, once unshackled from EU trade rules, new trade agreements with faraway countries in Asia or the Americas will replace the open access for the British economy, especially financial services, to the world's biggest market across the English Channel.

The future will reveal if there is a nirvana of new export markets to be won, but very quickly the issue of trade will start to burn its way into domestic politics.

An early example has been the staunch rejection by Michael Gove, the UK minister responsible for farming, of suggestions from Liam Fox, secretary of state for international trade, and US and Australian trade officials that a first trade opening after Brexit would be for American-produced chickens washed in chlorine and Aussie beef stuffed with hormones to be sold in British supermarkets.

Gove, who understands politics, is right to dismiss the proposal. The weight of landowners and farmers in politics – from the royal family downwards – remains formidable. It is hard to see the future King Charles sacrificing his Duchy organic farm products on the altar of opening British food markets to countries that have far lower standards, or more genetically or chemically altered foods.

It is not just food. When trade becomes domestic politics, protectionism is never far behind. President Donald Trump campaigned on a pledge to save the steel industry and autoworkers' jobs. The only way he can deliver is by launching a trade war with China and Europe, even at the cost of higher prices for US consumers as a consequence of tariffs.

Stand by for rows over anything imported from Israel as the powerful Boycott, Divestment, Sanctions movement mobilises local UK activists to press MPs and candidates to cut trade with the country.

Trade unions will campaign for protectionist tariffs against goods imported from China, citing the lack of human rights and absence of free trade unions in the Chinese economy.

The powerful British lobby against animal cruelty will seek to persuade every candidate hoping to win votes from animal lovers to sign a pledge to ban foie gras imports on the grounds of how the delicacy is produced – geese are force fed corn to fatten their livers.

Making trade policy part of domestic politics will inevitably lead to protectionism and endless ugly quarrels over what Britain can and should import. The first act of a sovereign House of Commons in a year's time should be to vote to stay in the customs union on a renewable five-year basis.

Denis MacShane is a former UK Minister for Europe and the author of Brexit, No Exit. Why (in the End) Britain Won't Leave Europe. He is a Member of the OMFIF Advisory Board.

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