Thursday, 31 January 2019

Brexit: the moral dimension to trade


I've always steered clear of global environmental issues because there is so much agenda driven disinformation and you'd have to be a full time specialist not to fall into the many traps. I did, however, become fascinated by the palm oil industry while in Malaysia last year.

Wanting to get out of the city to see some of the "countryside" we took a bus out to a tourist attraction where I was assaulted and mugged by various miniature apes. They probably took offence at my hat. I didn't get to see countryside though. The two hour bus journey was a long and straight road through miles of identical palm oil plantations, broken up only by stretches where the trees had been harvested. It looked like there'd been an artillery barrage.

On that score it's easy to see why environmentalists hate the palm oil industry. It rapes the land and encourages deforestation. there are local laws to prevent illegal deforestation but there are ways and means to corruptly get around it and though Malaysia, according to UN FAO statistics, shows no net deforestation, you'd have to be born yesterday to believe them.

Then, of course, the palm oil lobby would point out, quite correctly, that palm oil isn't the main driver of deforestation. In more recent years livestock production and urban development have taken the lion's share. It is, though, still a filthy business.

The problem here is that the EU has previously promoted the use of palm oil as a biofuel under its renewables policy which was a highly questionable decision even at the time, but now the eco-lobbyists have got their hooks in, the EU is seeking to reverse that trend.

But then are the eco-lobbyists really eco-lobbyists? You could be forgiven for thinking they were sock puppets for European oilseed producers which is less affected by the proposed changes to the rules. To ASEAN this reeks of protectionism which is why they're getting busy at the WTO to have these measures struck out. The sector is a major rural employer for Asia and it's not going down without a fight.

This is where we can expect a propaganda war to be waged through our media where UK think tanks, unsurprisingly in the free market Tory quarter, attempt to rebrand the palm oil industry as the good guys. This, presumably, is why they are so often reluctant to declare their funding.

This whole saga has been going on for donkeys years, and like many landmark WTO disputes it points to the slowness of the process, especially where evidence is scientifically contentious (see Argentine BSE dispute) which leads to a war of expert opinion on all sides. You pays your money, you takes your choice.

And you certainly pays your money. This is where a lot of the unregistered and unreported corruption in Brussels goes on. MEPs will generally side with the bunny huggers, but they are far from the innocent party and often funded in part by the EU which has its own agendas in play. On this particular issue I would never presume to take a side in that I don't feel remotely qualified to do so, but it really points out that trade is intensely political, slow to resolve and bent as bent gets.
 
This is the sort of business that has long been diverted from British politics. Consequently much of the politics of trade is off our radar and seldom reported in our media. You have to follow EU Observer or Euractiv to keep an eye on this sort of thing and the reporting, though quite good, is often superficial. We therefore, have little collective idea of what is done in our name or the process by which it happens.

This is why I view remainer activists such as Femi and EU supergirl with such disdain. They can easily rattle off the brochure version of how EU lawmaking is done, but are wholly ignorant of the grubby processes behind it. To their minds, says Sam Hooper, Brussels is a refulgent land exclusively populated by altruistic public servants workin’ and co-operatin’ across national borders for the Greater Good, while Britain is a parochial and benighted place, land of Gammons and the Evil Tor-ees.

But, of course, the point for us now is that if we repatriate trade policy then we also repatriate the corruption in a big way. London once again becomes a nest of lobbying - more so than it is now. Recent revelations about the Institute of Economic Affairs are only the tip of the iceberg. Here is where we can expect to see a revitalisation of investigative journalism. There are enough skeletons on the ERG closet to keep them in business for years.

The wider implications of Brexit, however, is that though we will operate our own trade policy, we will, to a large extent be passengers of events. Whatever is resolved in terms of EU palm oil rules, the EU can exert soft power to countermand any of our own measures.

This is where yesterday's trade select committee meeting was illustrative of the challenges ahead. Though the department of trade is in charge of rolling over our existing trade agreements, the FCO is in charge of rolling over the deals with soft components.

There may be more accurate terminology in the trade community but comprehensive trade treaties tend to be split into hard and soft components. The hard component being tariffs and monetary measures while the soft components relate to higher standards be they labour standards, human rights, environmental protections and development and investment. We can roll them over in principle but our hard needs may cause us to compromise on our soft principles.

This is where there will need to be a denazification process in our own government since our DfID and FCO officials are used to the EU as a soft power tool with which to wag the finger internationally. On more equal terms, if the UK wants to advance its soft trade objectives then it will either have to make hard trade concessions or pay through the nose. Our vote in international regulatory forums will be influenced by our export interests and conditional on what it buys us.

Through the Brexit process talk of trade thus far has been a rather clinical value free debate between technocrats largely because Brexit isn't really a negotiation. Or at least not yet. That comes later. When we have repatriated our trade policy, or should I say if, trade once more becomes a major preoccupation of the Westminster machine and intensely political internally and externally. Now it will become even more contentions because it has something EU trade does not. Public scrutiny.

In a lot of ways it will revitalise domestic politics. With the arrival of Jeremy Corbyn we once again see that the left cares about arms sales to Saudi Arabia. Not something we have seen since the early nineties. That is a sign of things to come. UK deals that threaten wildlife, cause deforestation or decimates African fishing grounds will once again be en vogue and there'll be a cottage industry in exposing the dirty dealings of politicians. Brexit very much returns the public to their supervisory role.

If there is a point to this post it is to point out that there are tiers of complexity not yet understood by leavers and remainers alike and the simplistic notion of "free trade" doesn't even begin to frame the debate adequately. There are political, geostrategic, commercial and moral dimensions to which there are no easy answers, plenty of compromise and no quick fix solutions. We also find that having a conscience costs money. Ok, so you want to stop arms sales to Saudi Arabia - but that means closing an aircraft plant in Lancashire. Try getting people to vote for that.

Remaining in the EU, of course, is the easiest of answers. It makes all these thorny questions go away. The decisions over the compromises and trade-offs are simply delegated to trade wonks in Brussels in the naive belief that because we never read about the corruption it is less corrupt than our own dysfunctional quasi-democracy. We can graze comfortably on goods and services without asking the tough questions and have our thinking done for us. Who cares if our trade policy drives mass migration, rapes the seas, collapses African industrial development and causes black people to drown in the sea?

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