International trade secretary Liam Fox. Credit: PA
Whitehall will struggle to make a success of business opportunities that arise from the UK’s decision to leave the European Union without a cultural step-change that recognises the magnitude of the task at hand, the Institute for Government has said.
The think tank said that despite last summer’s creation of the Department for International Trade, the civil service and ministers were “not even close to being able to negotiate – let alone implement – new global trading relationships”.
Its new report Taking Back Control of Trade Policy argues that developing good post-EU trade policy will require civil servants to work across departments, collaborate with business, and be transparent with consumers to find new priorities rather than simply launching into a numerous new deal negotiations.
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A key recommendation is the development of a trade “profession” in Whitehall that would establish a system in which civil servants would be expected to pursue a career “anchored in trade policy”, rather than as a stopping-off point on a more general path.
Authors Oliver Ilott, Ines Stelk and Jill Rutter said that while the government had signalled its intention to do this in a recent job advertisement for a head of the trade profession, it still needed to convert the line “into reality”, supplementing it with a dedicated graduate entry point for trade specialists.
They said the Department for International Development was a good example for such a system, and pointed to the low churn rate – “less than 5%" – for its graduate entrants.
Ilott, Stelk and Rutter also said that while prime minister Theresa May’s creation of DIT in July last year was a “clear statement” of the priority being given to new trading relationships, there was no guarantee the department would “hold together a coherent set of powers”.
They said stand-alone trade departments were unusual, with only four of the 15 non-EU countries in the G20 grouping of major economic powers using such a model. More common, they said, was incorporating international trade with functions such as foreign affairs or industry.
A particular risk, they said, was that DIT focused on initiating “a large number of simultaneous negotiations” only to find itself unable to progress any of them effectively.
The authors said the department should aim to run “four to five” negotiations at a time, starting with “similar sized” economies such as Australia and New Zealand, and pointedly not with the likes of the United States, India, China or Brazil.
“The experience of other nations suggests that trade negotiations with Brazil, India or China would consume large amounts of precious negotiating resource, with little prospect of reaching an agreement,” they said.
“The USA can be a swift negotiator, but tends to move most quickly when its partners adopt a strategy of capitulation masquerading as negotiation. The UK needs to deploy its resources strategically.”
Rutter, who leads the IfG’s Brexit programme said making success of post-Brexit trading opportunities would require ministers to accept that fundamental changes of approach were required.
“Whitehall is not set up to do trade well,” she said.
“Not only does it currently lack the necessary expertise but its standard ways of working – generalist, secretive and unwilling to make difficult trade-offs – are all the enemies of doing trade policy well.
“Ministers will find that taking back control of trade also means taking back responsibility for some very difficult political choices – and they need to be ready to make and justify them.”
A DIT spokesman said the department now had a global workforce of more than 3,000 people and that its Trade Policy Group – including policy and country specialists, as well as expert economic analysts and lawyers – had quadrupled in size since last summer.
“As part of our preparations to leave the EU, we have been working to identify the best trading opportunities available to the UK,” he said.
“This includes establishing a series of nine working groups with 15 countries and high-level dialogues to explore the best ways of progressing our trade and investment relationships.”