Britain has no clear plan yet for what it wants to achieve and EU rules give it only a fraction of the time normally required to complete a major trade deal
, photo: AP/Kirsty Wigglesworth
03 of August 2016 13:43:04
LONDON — Britain is woefully short of one thing it desperately needs in its high-stakes divorce from the European Union: experienced trade negotiators.Ever since Britain joined the bloc in 1973, the EU has handled its trade talks, so expertise in this area has migrated to Brussels. That means the government has only a few dozen skilled negotiators — against the 1,200 it will need, by one estimate — as it embarks on the complex talks that will determine the U.K.'s relationship with its most important trading partners.Add to this the fact that Britain has no clear plan yet for what it wants to achieve and that EU rules give it only a fraction of the time normally required to complete a major trade deal, and chances are the U.K. will gain less and pay more for leaving the bloc than campaigners promised, according to experts on negotiations and trade.Nick Butler, a visiting professor of public policy at King's College London, underscores the challenges by stressing that in reality Britain must work out deals with other 27 member states, each with its own goals, not just the EU as a single entity."It is multi-dimensional chess," says Butler, an adviser to former Prime Minister Gordon Brown. "This will take longer, it will be less simple, and the outcome will be more clouded and politically less satisfying" than those who voted to leave the EU expected.That's a very different picture from the one painted by new Foreign Secretary Boris Johnson and other leaders of the "leave" campaign, who told voters Britain could ditch the EU and negotiate their way into a new, better relationship.For example, one of the "leave" campaign's most potent arguments was that exiting the EU would allow Britain to regain control of its borders and stem the flow of European migrants. But EU officials haven't budged from their position that the free movement of people is a precondition for access to the single market.The most immediate problem is finding the people to get the job done.Jim Rollo, deputy director for the U.K. Trade Policy Observatory at the University of Sussex, estimates that Britain has 30 to 50 civil servants with some expertise in trade negotiations. By the end of the process, as many as 1,200 will be needed over the next decade, he said.The country has only just set up a government agency devoted to the British exit — nicknamed Department X — to lead the way on so-called Brexit talks. David Davis, who is in charge of the talks, recently said they have 10 applicants for every job, though it remains unclear what level of expertise they represent.Though some have speculated that Britain could bring in negotiators from friendly countries like New Zealand, department officials say it is too early to speculate on who might be hired.Tapping the private sector is problematic. Because there was no need for trade experts, few British-headquartered law firms have any because there had been no need to invest in the expertise. Those that exist are highly prized, with many commanding six figure salaries. But many corporate firms are going to be reluctant to part with that expertise, because their clients will now need advice on how to deal with the evolving situation.[caption id="attachment_29391" align="aligncenter" width="1024"] Brexit Scarecrows depicting former British Prime Minister David Cameron (L) and Foreign Secretary Boris Johnson are displayed during the Scarecrow Festival in Heather. Photo: Reuters/Darren Staples[/caption]Experts also worry that what legal experts are brought in won't be able to grasp the complicated politics and horse-trading that will be necessary.These challenges are one reason Britain has been slow to invoke Article 50 of the EU treaty, which will give it two years to negotiate a new relationship and leave the bloc. The deadline can be extended only with the agreement of both parties."I think for Europe, Brexit is a challenge. For the U.K. it is a crisis," former U.S. trade representative Charlene Barshefsky said. "That also leads to an uneven playing field for the two."She said Britain first needs an honest appraisal of its goals, and must make fundamental decisions about what its priorities will be. It is, she said, like needing a bed and a car. You can try for the mansion and the Ferrari, but you have to decide that you'd settle for a three-bedroom condo and a sedan."Every negotiation is the difference between what you need and what you want," said Barshefsky, senior international partner at U.S. law firm WilmerHale. "Britain needs to do a little bit of soul searching."And it won't be quick either. Given the nature of modern trade deals, the negotiations could last years, some experts say.Despite that, some like Rollo see opportunity for Britain. It would be able to shape its own trade policy for the first time in decades and designing it especially for the British economy, not the EU as a whole.As the negotiations are eventually undertaken, the interdependence of the economies of Britain and the rest of the EU will be a key issue.There is no doubt the U.K. is a big part of the EU. Losing Britain would shrink the EU's economy by 17.6 percent and its population by 12.8 percent, according to the most recent figures from statistics agency Eurostat. And London is by far the continent's pre-eminent financial center.On the other hand, the EU accounts for 47 percent of U.K. exports and facilitates another 13 percent through agreements with non-EU countries.The EU would have an incentive to make it difficult for Britain to avoid giving other EU states the impression that breaking away is economically easy and attractive.Pascal Lamy, former director-general of the World Trade Organization, says the talks will be tough, though ultimately about business interest."International trade is not about love or hate or feelings. It is about hard numbers, necessities and realities; more business than politics," Lamy said in an email to a news agency. "But based on my experience, it will be long, hugely complex, and bumpy at times."While Britain would need only eight bilateral agreements to cover 80 percent of its exports, it would need 132 more to cover all of its existing trade, according to research by Martin Reeves and Philipp Carlsson-Szlezak of Boston Consulting Group.The complexity, scale and quick timeframe of the talks means that whatever negotiators Britain does recruit will likely have to compromise on some of the political promises made by the "leave" campaign, such as a quick end to free immigration from EU states."They didn't expect to win so no one has any idea what to do now," said Pankaj Ghemawat, a professor at IESE Business School in Spain and NYU, of the campaign to leave the EU. "The analogy that comes to mind is the dog chasing the car. Sometimes the dog catches the car, and then doesn't know what to do with it."