The UK’s obsession with trade deals means disaster for the environment
Over the weekend, Boris Johnson told the world we need to “create a healthy planet for our children and grandchildren”. Today he launches a trade deal which is not simply as inadequate as the pledges made by Johnson and other leaders at the G7, but is more worryingly moving us rapidly in the wrong direction.
The trade rules contained in the UK-Australia deal will be a disaster for the environment. On the one hand, it will certainly increase carbon emissions if we replace food from Britain, or our near neighbours, with food from a country on the opposite side of the world.
But it isn’t simply a matter of distance. Modern trade deals embed all manner of rules that inadvertently work to proliferate climate change, some bearing only a tenuous relationship to trade. Importing more industrially produced food doesn’t only boost that industry in Australia, it will over time drive small farmers who can’t compete out of business and put downward pressure on standards here. Our own farming system will become less environmentally sustainable.
Laying aside the government’s protestations to the contrary, this trade deal will affect food standards through clauses that effectively allow us to import food made to lower standards than we employ here. British farmers are quite right to be concerned that the trade deal will throw them open to competition with Australia’s industrial farming sector, where lower food standards including hormone-treated beef are routinely employed.
It’s not just about the quality of the food. Trade deals limit a government’s ability to intervene in the economy, lest any action be judged “discriminatory” to foreign corporations. Some deals even include clauses that make it impossible for governments to effectively regulate fossil fuel exports. The
problem is that this kind of government intervention is precisely what we need if we’re to build a more environmentally friendly economy.
Unlike global climate commitments, trade deals are highly enforceable. Earlier this month, the trade minister Greg Hands told parliament there was a good chance the Australia deal would include a mechanism to protect investors with a secretive “corporate court” system, allowing multinational corporations from a trade partner country – in this case Australia – to sue the British government in a secretive tribunal for any law or regulation they regard as unfair.
These “courts” have been repeatedly used to challenge environmental regulation. The Dutch government is currently being sued by two energy multinationals over its decision to phase out coal power. Previous cases have seen governments sued for placing a moratorium on fracking and for forcing a power station to improve its environmental standards. One tribunal actually ruled that the Canadian government had violated an investor’s rights simply by carrying out an environmental impact assessment, a judgment that even one of the arbitrators said “will be seen as a remarkable step backwards in environmental protection”.
In Cumbria, the county council has authorised a new coalmine, ultimately owned by an Australian corporation. After months of campaigning, the mine will now be subject to a full inquiry, which could see the permission overturned. If we had a corporate court system with Australia, Britain could be sued, in secret, for backing away from the mine.
This deregulatory pressure is the last thing we need if we’re to have any chance of reducing emissions. But too many people think that post-Brexit, we simply need as many trade deals as possible, and if we can’t sign one with Australia, well, who can we sign one with?
In fact, Australia is a serious laggard on climate policy. Just this week, the prime minister Scott Morrison’s government struck a discordant note at the G7 by refusing to pay even lip service to binding cuts to coal power, preferring instead to put the emphasis on untested techno-fixes. Back in Australia, his deputy, Michael McCormack, said they would “do things based on what’s right for Australian households and factories and farms so that they don’t have to pay any more for their electricity”.
But the issue at stake isn’t how we feel about Australia – or any other country. The problem is with the type of trade deals we’re signing. It isn’t even about trade per se. We already have historically low tariffs with most western countries, and as the Australia deal shows, it simply isn’t true that new trade deals add thousands of jobs to our economy. Any claims of boosting growth are of a fraction of a percent over 15 years – completely unnoticeable compared to the effects of the pandemic.
Trade deals are, instead, about clearing away obstacles to the free movement of goods, services and money around the world. Those “obstacles” are often our most cherished food standards, protection of public services and our right to regulate corporations. The climate crisis makes all of these things much more important.
Elsewhere in the world, there are signs that these lessons are just starting to be heeded. Joe Biden has explicitly said he’s not interested in more trade deals, preferring to build resilience in the US economy. The EU is struggling to get any trade deals agreed, with the one proposed with the Latin American Mercosur bloc looking increasingly unlikely to be ratified due to controversy over its environmental implications.
Sadly, the British government’s obsession with signing the most liberalising trade deals possible is in fundamental conflict with the need to deal with the climate emergency. The choice for the British government in this trade deal is clear. We can have a habitable planet with sustainable domestic agriculture. Or we can have a system of trade that puts governments in thrall to big polluters, helpless to take action on the climate.
Nick Dearden is director of Global Justice Now (formerly World Development Movement)