The politics of trade – intimately linked to the politics of Brexit, which helped Boris Johnson to the Conservatives’ biggest electoral majority since 1987 – are likely to dominate the next few years in the UK. Since his election victory, Boris Johnson has followed a consistent line on new trade deals, including with the EU, prioritising regulatory sovereignty over economic benefit. Unless Johnson is prepared to compromise fundamentally, that points to major trade frictions between the UK and its biggest markets. But it would also mean that the most centralised UK government in modern times had a wider range of policy and regulatory levers than any of its recent predecessors to try to mitigate the impact of trade disruption, and re-shape the British economy.
Companies should be positioning themselves now for three main phases of government activity:
- Sept-October 2020 The government makes negotiating trade-offs to secure a headline EU deal
- Late 2020-21 The domestic agenda take shape, as the government attempts to deal with the fall-out from trade friction and Covid 19, and deliver on ‘levelling up’
- 2021 onwards Ongoing trade talks with the EU, and the evolution of the UK’s domestic regulatory environment
This mixture of ongoing negotiation with the EU, and the need to use domestic policy to respond to the disruption of EU economic ties mean that trade as an issue will be at the forefront of British politics for the foreseeable future. That creates opportunities as well as risks for business:
- Trade deals will re-shape UK access to EU and US markets – Boris Johnson will want quick trade deals with the EU and US, and will make concessions to get them;
- Trade bodies will not be able to take the strain, as they largely did in the first phase of Brexit. MPs and the media will want to know what individual companies stand to gain or lose from changes to regulation and market access;
- The government will need to set up or expand national regulators, and decide how it wants to use powers returned from Brussels – pressure will only grow for answers as agriculture, chemicals, automotives, pharma and other regulated sectors respond to new trade frictions.
The Lexington offer
Lexington brings trade experience, political insight and proven strategic analysis to help you navigate the emerging trade landscape. Our team is led by our Senior Counsel on Trade and Regulation, Paul McGrade, with a career in EU negotiation at the FCO, Cabinet Office and European Commission. The team includes Sue Beeby, former adviser to Jeremy Hunt and George Osborne, Paul Harrison, former No10 Downing Street press spokesman, and Declan McHugh, former Labour Special Adviser. We have detailed sector expertise in health, agri-food, financial services, transport, tech and responsible business, as well as innovative press and campaigning experience.
We are part of the global Fipra network, and work closely with the Fipra team in Brussels, which includes Robert Madelin, a former trade negotiator and Director-General at the European Commission, former US trade adviser Peter Chase, and Phil Evans, a former Inquiry Chair at the Competition and Markets Authority.
Lexington can help companies:
- Create a single internal message, supported at global Board level, on EU and US trade deals, and on what the government should do domestically to help sectors as they grapple with new trade frictions and the Covid 19 impact;
- Develop an accessible narrative for non-experts – including Ministers, MPs and the media;
- Develop and deliver an engagement strategy for Ministers, Parliamentarians and officials;
- Run campaigns and thought leadership initiatives around specific issues, such as the role of UK regulators as powers return from Brussels.