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Shipping Off Britain’s Integrity

Despite promising a new approach to trade, the government is pursuing new international agreements that would embolden corporations — and reward some of the world's most oppressive regimes.

Keir Starmer and Shadow Secretary of State for Business, Energy and Industrial Strategy Jonathan Reynolds. (Photo by Leon Neal/Getty Images)

Before entering government, Labour’s Jonny Reynolds said he would reverse the Conservatives’ ‘quantity-over-quality’ approach to trade deals. But the copy-paste list of trade talks the now-Business and Trade Secretary has announced threatens to dash hopes of a new era. The causal line the new government has drawn between negotiating Free Trade Agreements (FTAs) with ‘the Gulf Cooperation Council, India, Israel, South Korea, Switzerland and Turkey’ and ‘deliver[ing] its growth mission’ mirrors the consensus between Westminster, the City, and the media uncritically parroted since 2016: that an unwieldy sprawl of FTAs is equivalent to economy-saving prosperity.

This consensus isn’t borne out by the numbers. According to the government’s own estimates, the economic benefit of the potential UK-India FTA could lead to a 0.22 percent increase in GDP by 2035 at the most generous estimate. In other words: tiny. Such minimal gains, and for what — human, ecological, moral — cost?

Ministers are talking up the new trade strategy, which they say ‘aligns with our industrial strategy, enhances our economic security and supports our net zero ambitions’, but it seems backwards to begin talks before being able to assess them against these broader considerations. A trade strategy without even a nod to human and workers’ rights, environmental and climate policy, and sustainable international development has no place in the modern era.

Even free trade diehards, for example, would judge the Gulf states and Israel as a who’s who of the dodgiest bedfellows a country could pick to partner with. Pursuing an FTA with Israel while it is plausibly committing genocide and responsible for apartheid, and amid the growing demand for arms sales there to be halted, would effectively be rewarding its war crimes in Gaza.

The costs of further economic integration with the Gulf states, meanwhile, are likely to be felt most severely by those already suffering from well-documented human rights abuses in the region. Not only does a deal signal a quietism towards such abuses, but through increased cooperation in sectors like technology and AI, Britain risks exacerbating the human rights concerns of those living and working in states which routinely use high-tech methods such as spyware, social media manipulation, and mass surveillance to repress their populations.

Similarly, the Trades Union Congress’s joint statement with Indian unions makes clear that an India-UK deal risks worsening the rights and conditions of Indian workers, including by making it easier for companies to outsource operations to India and to send workers from India to the UK without collectively agreed rates of pay or decent conditions. It’s also concerning to see new ministers fail to commit to what many Labour MPs called on the previous government to do: not require India, as part of a deal, to amend its intellectual property laws, which would undermine the country’s important generic pharmaceuticals industry and threaten access to affordable, lifesaving medicines.

The new trade minister, Douglas Alexander, recently told the Financial Times that ‘our strategy won’t be driven by post-imperial delusions or political dogma’. But his boss’s unreconstructed aim of ‘tearing down unnecessary barriers to trade’ drags the free trade orthodoxy kicking and screaming into a world where it doesn’t belong: the demands of the day are reckoning with a new geopolitical multipolarity and the climate crisis.

Globalisation has resolutely failed to insulate the world from multiple crises, from Covid-19 to the consolidation of corporate monopolies. With their Inflation Reduction Act and Green Industrial Plan respectively, the US and EU are clocking onto this reality. Labour’s ‘securonomics’ reaches in its allies’ direction, but their boots are stuck in the ‘open-to-business’ mire — even though liberalised trade has thrown up barriers to industrial policy and states’ right to regulate in the interests of people and planet.

Reynolds needs to square up to the trade rules which block industrial policy tools like local content requirements, which would allow ourselves and our trading partners the ability to home-grow the green industries of the future. He needs, too, to push to end those provisions known as ‘investor-state dispute settlements’, or ISDSs, which empower transnational corporations to sue governments over any policy they allege harms their profits — a dangerous blocker to the policy space governments need to drive the green transition or to phase out obsolete fossil fuel industries.

A genuine move to drop post-imperial delusions in trade policy requires a radical rethink in how the UK approaches its relationship to countries in the Global South, which form much of the upstream of the supply chains it seeks to secure. Being a ‘green export superpower’ cannot mean cheaply and dirtily extracting critical minerals from the Global South and selling them back expensive, patented technologies.

The new government, facing the demands of the green transition, has the chance to truly transform the terms of international trade: to support countries to pursue their own sustainable industrial development, to improve rights and conditions, and to ensure a voice and justice for affected communities in the industries of the future. This will mean a mutually beneficial model precluding things like ISDSs and bars on industrial policy tools, and including things like technology transfer and support for value-addition and benefits-sharing in partner countries.

But before all this, it means taking a breath and listening to those who have been on the sharp end of the neoliberal trade system for decades. Pausing the FTA programme and first building a trade strategy through an inclusive, transparent, and consultative process is the only route away from the ‘delusion’ the minister himself warns against.