The problem with linking trade deals to human rights

4 July 2021

5:30 PM

4 July 2021

5:30 PM

Trade deals are in the air post-Brexit, but not everybody is happy. In a speech this week Frances O’Grady, the TUC General Secretary, accused the government of not taking international morality into proper account when closing such deals. She demanded the government take steps to suspend trade deals with a number of countries that, according to recent research by the TUC, had a murky record on labour standards and human rights.

By failing to do this and continuing to deal with these regimes, she said, the UK would be turning its back on workers everywhere and in addition demonstrating that it could not be trusted to observe decent standards at home. By contrast, if it made the signing and observance of any trade deal conditional on the other party’s acceptance of TUC-approved labour and social standards, the UK could then use its leverage to force change on other countries.

The TUC wasn’t the only body to strike a sour note here. The Shadow International Trade Secretary Emily Thornberry – with Sir Keir’s blessing, or at the very least acquiescence – made her own similar speech at about the same time. According to Thornberry, the UK was morally obliged to occupy the high ground and tell other countries that they wouldn’t get trade deals unless they accepted its standards on workers’ rights.

These sentiments certainly sound appealing (though one suspects more to the academic Labour faithful than to people in places like Hartlepool, where workers’ livelihoods can actually depend on the dismantling of trade barriers). They are also wrong.

For one thing, the government has already made it clear that in egregious cases trade policy will in fact be influenced by considerations of morality and decency. Three months ago, against the background of the Uyghur scandal in China, a compromise was worked out in Parliament for precisely this purpose. When a foreign state is so far beyond the pale as to be credibly accused of genocide, section 3 of the Trade Act 2021 says that no deal can be signed with the country without a full Parliamentary debate.

For another, Frances O’Grady is talking palpable nonsense when she suggests that conditioning trade deals on good behaviour elsewhere must benefit UK workers, on the basis that ‘a government that readily agrees deals with countries which abuse rights abroad is one that won’t stick up for rights at home either.’ This simply does not follow. There is nothing inconsistent between the UK government making it easier for Tesco to source, say, coffee from Brazil or potatoes from Egypt (two of the countries lambasted by the TUC) and still insisting on decent treatment of workers by employers here. The idea that, unless we have some kind of government-imposed Fairtrade policy in all trade agreements, low standards abroad must somehow infect our lawmakers here is preposterous.

Not only will national self-righteousness in the matter of trade deals fail to make our own government any better, it is equally hard to see it having the slightest effect on foreign government policies either. Talk of the UK exercising ‘leverage’ is all very well: but what leverage is Ms O’Grady thinking of? Not presumably economic leverage. The UK itself would refuse indignantly to agree to change its political system or its labour laws in order to persuade a foreign country to trade with it; and there is every reason to think the same goes for other countries. Few, if any, foreign governments are so in need of a trade deal with the UK that, despite the harm to national pride, they will consent to change their internal policies – some of which may enjoy popular support – for the sake of it.

Nor is the moral case any more convincing. Countries that ostentatiously take the moral high ground are often admired, but seldom imitated. Do the TUC and the Labour party think that illiberal governments abroad, whether populist (as in Brazil) or simply authoritarian (as in Turkey or Malaysia, two other countries singled out as bad influences) are likely to change their ways when they encounter our moral suasion, rather as the Pirates of Penzance needed only a reminder that they owed allegiance to Queen Victoria to put them on the path of virtue? One has one’s doubts.

Indeed, when closely looked at it seems likely that the TUC’s suggested regime would not simply fail to make the world a better place: it would in all probability make it a considerably worse one. The real sufferers from the kind of tariff and bureaucratic barriers that trade deals are meant to demolish are workers.

However high-minded its approach, a government that scuppers a trade deal with a foreign state because of qualms about abstract matters such as local labour laws or human rights protections will, you suspect, earn little gratitude from workers in that country whose jobs the deal would have safeguarded.

There is, of course, something else we need to bear in mind. Before we instruct the British Embassy to greet a foreign government seeking trade liberalisation with the kind of stern moralism advocated by the TUC, remember that, especially in developing countries, there is likely to be another embassy just down the tree-lined avenue offering not only free trade but all sorts of other goodies. The personable Wang Yi, Xi Jinping’s Foreign Minister, will no doubt be delighted to arrange soft loans, grants and infrastructure projects, modestly asking in return merely that the country enters into a co-operation agreement with China, such as the Belt and Road initiative, and does as the Chinese ask.

One thing is clear: once this happens, the influence of China will not favour either trade union protections or human rights of the kind so beloved of the TUC and Labour. This factor alone should cause both of them to think deeply before suggesting that the UK be too demanding of those countries seeking to boost their trade with it.

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