Negotiating trade for both the UK and the EU

Hands up — who has the slightest clue of what really goes on in a trade deal negotiation?

Since the political earthquakes of 2016, when Donald Trump won the White House and the UK voted to leave the EU, trade deal negotiation has become a topic we've all had to become a little more familiar with.

From Trump's battles with China and others, to the sunlit uplands the Brexiteers have promised with their imagined trade deals of the future, the topic is rarely out of the news. But for all its current relevance, it's a process that remains relatively opaque to those who haven't been directly involved.

Roderick Abbott is now retired as a trade negotiator, but in his work as a senior advisor with the European Centre for International Political Economy (ECIPE), he is still keenly tuned in to issues in global trade, which have dominated his professional life.

In the 1960s, he worked with the British Board of Trade on questions of trade with the then European Free Trade Association (EFTA), India and Pakistan and on the General Agreement on Tariffs and Trade (GATT).

However, after the UK joined the EEC (which became the EU) in 1973, he became a trade negotiator in Brussels, where he spent 30 years working in trade at the European Commission. During his time there, he was a central member of the European negotiating teams during two GATT negotiation rounds: the Tokyo Round (1975-79) and the Uruguay Round (1987-93).

In an extensive interview with Deutsche Welle, he reflects on the complexity of negotiating trade deals and on what he believes to be the trade prospects of the UK if and when Brexit finally happens.

 

DW: Why is it that trade deals seem to take so long to strike nowadays? The EU have been in negotiations for years with certain countries, while deals they have struck, such as the EU-Canada Comprehensive Economic and Trade Agreement (CETA), took several years?

Roderick Abbott: Well, the first thing is that I am not absolutely sure that what the media reports about how long it takes is really very accurate because you can break it down. You start — after you've got a mandate to negotiate with Canada or with Japan or anyone else — you start with a preparatory phase with things like impact assessments, which is designed to give you domestic legitimacy. That could last a year or two. We're going through that at the moment between the EU and Australia and New Zealand. It's a preliminary phase.

Then you actually get across the table with those you are negotiating with and that might take two or three years. I don't know if it's often more than that. It depends on how different the regimes are, as they have to be somehow brought together. Then at the end, you have a ratification process. And you remember in the case of Canada that was very complicated because of the Belgian situation [the Walloon parliament initially rejected the CETA deal]. But if you take CETA, and they quote you seven years, I would break it down into two years of preparation work, three years of actual negotiating, drawing up texts and things, so the policy side, the text side…and then probably two years for ratification.

What exactly is happening in a trade negotiation? How many separate teams are involved?

My model here is the Uruguay round, which is probably the model on which later things were based but they may have got more complicated since. So there was a broad landscape of people, with on one end, tariffs and tariff-like measures, for example in agriculture. In the agriculture context you had tariff-rate quotas which are a variation of the tariff. So you would have a team on agriculture. You would have a general non-tariff team and they would be dealing with restrictions, which according to the rules are illegal but somehow the GATT, the WTO is able to be flexible. When things are illegal, they seem to find a way around. I call that being adaptable. Other people would say it's full of contradictions...

So you would have had a non-tariff barrier team looking at prohibitions at one end, complete bans, and then at the other end, quotas, or caps as they call them these days. You then would have had in the services area a big team and you would have had an intellectual property team because back then, they were trying to bring into the GATT process the existing agreements which had been made on patents and on copyrights and so on. Now those are the main kind of teams. But you can break it down even more.

A perhaps clichéd image of trade negotiations is of people working until all hours, stuck together in a room, with things going down to the last minute. Is that the reality or is it a cliché?

No, it isn't a cliché. It is the correct image, because at certain moments you always have a deadline. Maybe you had a deadline because you were due to go into a negotiation in Geneva next week. Or later still you had a deadline because a ministerial conference was going to meet and so on. Regularly we had to work into the night in order to get it done. Now in this kind of general area let me mention one thing, which made life easier and also more difficult and that is the computer. If you can imagine this: in 1968, when I was first in Geneva and got involved in minor tariff negotiations with third parties, we were working on the basis of data without computers, so we were working on the basis of data provided by customs officials about imports and exports written out on a big sheet of graphic paper in pencil.

This is really giving you the life of a trade negotiator in those years but it's probably gotten worse. I mean in some ways, the data must be almost available before it's written into the computer. But it is also getting broader and broader. Trading of goods divides down into 99 different categories. The harmonized system is a system of commodity categories and chapters one to 24 are basically agriculture products and Chapters 25 to 99 are industrial products. These are my biblical things! These are the things that every trade negotiator has to know in his genes. In the chapters, they are divided down into subchapters so you have this data at all different levels of aggregation. You begin to see...just the tariff part of it and the data on imports and exports by different countries...I'm sure you're reading me. This all gets rather complicated!

The Brexit process rumbles on but we are still no clearer to a resolution. Assuming it does eventually happen – given the complexity you have outlined with regard to trade negotiations, how well placed do you believe the UK is to negotiate its own trade deals once it leaves the EU?

I fear they're not as well-prepared as they should be. But I can't really say because although I tried to make contact with the people in charge to offer my services, it never really went very far. So I've not got any real clear picture of what they're up to. If you start at the beginning in 2016, they said they had no trade negotiators because for 40 years they had been under the EU. They had participated in giving them the mandate to negotiate, they participated in agreeing the outcome, but they had not been across the table themselves negotiating with anyone else.

You know, there were at that stage (2016) British trade negotiators like myself and I think at least 10 or 12 others who could have been brought in. But at that point they never did that and that is partly because they weren't going to negotiate straight away. One had the impression that all of this was going to start immediately but it became quite clear through the end of 2016 that the EU was not going to negotiate on a trade regime until the UK had left.

That wasn't completely clear at the beginning but it was clear by the end of 2016 and by the time that they actually triggered Article 50, it was clear although I read stuff which suggested that people like David Davis didn't understand that. Now, what has happened is that they have built up and recruited from all over the place. They have built up a certain degree of training. And some people I have heard of have been in there training people, training people on paper, if you like, because they're not actually doing negotiations right now. So what they're doing is preparing all their data.

Preparing say, a dozen countries that you want to be negotiating with at the beginning. So you set up teams, they are going to get into the data of imports and exports with that country, between Britain and that country, and then they will start to see where their priorities are in terms of what they want and what the other side wants and so on. That sort of work has been going on, I don't know anything really in detail but I am aware that they have got those sorts of teams in place. I mean how well organized they are, how well they understand problems and things like I would put it, I don't know.

This interview was conducted by Arthur Sullivan. It has been edited and condensed for clarity