Brexit: How do you negotiate a trade agreement?

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“I think that on trade issues,” said the French Foreign Minister, Jean-Yves le Drian, “we are going to rip each other apart.”

The war of words about a potential trade agreement between the UK and the EU is heating up.

But that’s to be expected.

And behind the scenes, a huge amount of work is going on to prepare for what could be a bruising few months.

“At the end of this year,” said the UK’s chief Brexit negotiator, David Frost, in a speech in Brussels, “we [will] recover our political and economic independence in full – why would we want to postpone it? That is the point of Brexit.”

So what do you need to think about when you’re preparing for trade negotiations?

“What do you want? That’s probably the first thing you have to be absolutely crystal clear on,” says Emily Jones, who runs the global economic governance programme at the Blavatnik School, at Oxford University.

“There’s a lot of trade-offs in doing a trade deal and it’s really important to be clear about what your priorities are and how you rank them.”

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Fishing is a good example. It’s a tiny part of the overall economy in the UK and the EU but both sides have already insisted they see it as a priority.

So what might either side be willing to concede in one sector to get what they want in another?

It’s worth remembering most deals are about getting rid of barriers to trade and moving closer together – but this negotiation will be about moving further apart.

Landing zone

It’s also important to know what the other side at the negotiating table wants to achieve.

To do that, you need to understand the politics they are grappling with and the legal and institutional constraints they face.

“It’s important to think about what the final deal will look like,” Ms Jones says, “you have to define the landing zone.”

A deal has to be acceptable to both sides; otherwise – in the end – it will fail. This is the core of the UK’s argument that the EU needs to see this as a negotiation between sovereign equals.

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Media captionConfused by Brexit jargon? Reality Check unpacks the basics

Realism

Of course, there will be more lurid headlines on trade in the coming months.

In the end though, after all the shouting, when both sides need a deal, there will need to be realism about what can be achieved.

“I fear we are not as ready as we would like to be,” says Alan Winters, director of the UK Trade Policy Observatory, “and the time constraint is very binding.”

“We are only going to get a limited number of things done and we should be realistic about that.”

Most trade experts believe whatever happens this year, negotiations will have to continue for some time to come.

“The difficult things are where regulations are concerned,” Mr Winters says.

“So it’s services, industrial regulations, food safety, chemicals and so on. It’s quite straightforward to cut tariffs to zero; it’s all the other stuff that takes time.”

Transparency

The temptation must be to push things through behind the scenes but recent history suggests too much secrecy in trade negotiations can prompt a hostile reaction.

In 2016, tens of thousands of Europeans marched against the Transatlantic Trade and Investment Partnership (TTIP), a proposed free-trade agreement between the EU and the United States, which has now been abandoned.

“There was a huge backlash,” says Bernardine Adkins, head of EU trade law at the solicitors Gowling WLG. And lessons learned then about transparency should be taken on board now.

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“You may need to keep some of the details secret,” she says, “but you need to keep touching base with all your stakeholders – not only with business but with consumers and trades unions as well.”

Serious discussions about trade in the UK are confined mostly to expert gatherings or government meetings behind closed doors.

By comparison, the US has already held public consultations about a possible trade deal with the UK and the EU has published the detailed text of its draft negotiating mandate.

In London, there’s certainly a sense of anticipation – and the government says it will set out its plans in more detail in written form.

“We’ve never done anything like this before,” Mr Winters says. “In a sense it’s very exciting and along with excitement goes a degree of terror.”

National Conversation

And there are wider issues to consider.

How do trade deals fit in with other foreign policy goals such as security or with other domestic priorities such as reducing regional inequality or decarbonising the economy?

“We as a society need to have a national conversation about it in the UK,” says Ms Jones.

“My deep concern at the minute is that we’re going to be doing trade agreements that lock us in for the medium term or even the long term, without having thought through all the options.”

Time constraints

The post-Brexit transition period runs out at the end of this year, so time really is tight.

Leaving the single market and the customs union is the biggest economic change this country has made in at least 50 years.

But there’s no doubt that change does produce opportunities.

In his speech in Brussels, Mr Frost said the UK would be able to be far more nimble than the EU in the future and take better advantage of new developments in the global economy.

“Britain will be able to experiment, correct mistakes and improve,” he said. “The EU is going find this much, much more difficult.”

There are no guarantees at the start of any negotiating process, though, about where it will eventually end up.

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