16 May 2024

Free trade could be the Tories’ ticket out of oblivion


In addition to all the specific criticisms of the Government’s record and its policies, many make the assertion that after a political party has been in power for many years, it is ‘time for a change.’ The argument continues that any such government is likely to be ‘tired’ and to have ‘run out of ideas.’ Yet this need not be the case. Margaret Thatcher’s reforms became bolder during her time in office. Initial progress in such areas as trade union reform and privatisation was cautious. 

Another claim is that even if Rishi Sunak found his radical mojo, it is too late. If we have a general election in the middle of November, then we only have six months to go. Despite the by-election defeats and the defections, the Conservatives still have a comfortable working majority in the House of Commons. As we have seen with the legislation on Rwanda, opposition in the House of Lords can eventually be overcome. Yet there does seem to be great timidity about legislation that would prompt rebellions or require all-night sittings. 

This is a choice. Javier Milei, the President of Argentina, has shown that rather significant changes can be accomplished in six months – even without a majority in Parliament. 

But let us concede that the Prime Minister of our country has no appetite for fresh parliamentary struggles. That still leaves him scope to set the country in a clear direction should he wish to do so. 

One important area would be to embrace free trade. ‘The UK Government is responsible for negotiating, signing and ratifying international treaties involving the UK, under its prerogative powers,’ a briefing from the Commons Library explains. 

There has already been an important start in taking the opportunities of Brexit. Of ‘choosing the open sea’ as Churchill put it, of embracing ‘Global Britain’ to use the contemporary variant. 

A year ago, we concluded a free trade deal with Australia and trade has increased as a result. We have also joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. 

Indeed, one of the ways that we have shown solidarity with Ukraine has cost us nothing. We have agreed to free trade. 

Yet last month we introduced physical trade checks on some products being imported from the EU. There have been delays in bringing others in. But why do we need them at all? It is a bureaucratic mindset that such requirements are necessary on ‘health and safety’ grounds. If a product is deemed safe in France and Germany (or for that matter the United States or Canada) we should trust British consumers to purchase it should they be brave enough to do so. So this unnecessary red tape should be permanently cancelled.                        

But more than that, we need to make some big advances. A free trade deal with India is a moral as well as an economic imperative. It is a country with a population of a billion and a half people. It is an economy that is growing through an embrace of capitalism which is thus reducing poverty. Trade and investment could achieve so much more than Overseas Aid handouts. We were hoping for a deal a couple of years ago but have held it back due to haggling over protectionist vested interests. Let’s show some leadership to get it over the line. 

Not that greater trade opportunities always need to be achieved by negotiation. We should unilaterally scrap tariffs on items we don’t produce in the UK – coffee, olive oil, oranges, lemons, bananas, rice, okra, avocados. 

When he was still Prime Minister, in a speech in Blackpool in June 2022, Boris Johnson said: 

We do not grow many olives in this country that I’m aware of. Why do we have a tariff of 93p per kilo on Turkish olive oil? Why do we have a tariff on bananas? This is a truly amazing and versatile country, but we don’t grow many bananas, not even in Blackpool.

If only that thought had occurred to him earlier. 

Let us consider the more nuanced example of tomatoes. Lord Hannan, the President of the Institute for Free Trade, notes

We import 80% of our tomatoes, and our chief supplier is Morocco. Because Morocco is outside the EU, its exports are subject to tariffs and quotas.

He adds: 

This is, on the face of it, utterly bizarre. Britain’s tomato season runs roughly from June to September, Morocco’s from October to April. Even the dimmest protectionists must struggle to explain whom they think they are protecting.

It would be excellent to get a free trade deal with Morocco fully concluded. But in the interim, the tariff on their tomatoes is not some cunning negotiating tactic. It is a straightforward act of self-harm. We are the ones paying the tariffs when we go to the shops to buy tomatoes. 

Even if we wanted to protect our tomato farmers from competition (which would be misguided) it makes no sense. I would argue for open markets and free competition. Farmers, along with the rest of us, should earn a living by offering better value than the alternatives. But even if one recoils from capitalism in the raw. Suppose that, sentimental old fools that we are, we wish to help out our tomato farmers. There is still no logic to hiking the price we pay for producers from abroad that are counter-seasonal to home growers. 

Steel offers another example. Other countries produce the stuff more cheaply than we do. That is partly due to our policies of pushing up energy costs – which we could change. But subsidies and protectionism holding back other British industries cannot be a rational response. If a community and its workforce are unable to compete it is more realistic to help them adapt than to continue with an unsustainable arrangement. 

Some may disagree. So much the better. It would not be the first time this has been a key divide in British politics – albeit in the past, the Conservatives were the protectionists opposing the free trade Liberals. Free trade is a cause that particularly helps the poor both here and abroad. How can Labour credibly complain of the ‘cost of living crisis’ while opposing measures to reduce the cost of food and clothes? How can they claim to be ‘progressive’ while thwarting the chance for developing countries to sell their goods? 

If free trade is pursued in a vigorous way, it offers the Conservatives a big idea. An idea which embraces the zeitgeist of international opinion, at least in the growing economies. It would be an internationalist, self-confident message for our destiny. If Labour responds by fretting and fussing and looking for excuses to delay and highlight ‘practical difficulties’, they will be the ones looking weak and tired. The Conservatives can force this issue to the forefront by applying it in a sweeping and consistent manner. Timid incrementalism would not be enough. 

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Harry Phibbs is a freelance journalist.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.