The race to arm Britain against a hostile new world
The UK is taking steps to boost its defences against the dumping of goods, writes Anna Isaac
As Brexit looms and the UK seeks to assert its independent trade policy, talk of a global trade war is mounting. In a climate where the US is defying the post-second World War consensus on a rules-based, free-trade system, the state of the UK’S readiness to defend itself amid rising global trade tensions has become a pressing issue.
Donald Trump, the US president, has pushed ahead with metals tariffs, affecting allies including the EU, Canada and Mexico with levies of 25pc on steel and 10pc on aluminium.
The move thrust 30,000 UK steel jobs into doubt. It also put a greater focus on what states can do to tackle the issue of dumping – recently the result of state-backed overproduction in China – taking its toll on industry. Cutting off the US market for Chinese metal production prompted fears of increased volumes being sold into others, adding to the impact of dumping by depressing steel prices in the EU.
During the recent dispute between US and Canadian aircraft makers Airbus and Bombardier, the UK was covered by the supranational EU umbrella. It was the same with the latest US trade move. Cecilia Malmstrom, the EU trade commissioner, talked tough, while Theresa May, the Prime Minister, said remarkably little.
This has not served to dent the confidence of some Brexiteers, however, and those in charge of the UK’S new trade defences.
“It’s well timed for the UK to be a very strong, committed voice for free trade and the rules-based international system,” Greg Hands, minister of state for trade told
Sunday Telegraph. The main route for this voice will be an independent role at the World Trade Organisation (WTO), the global arbiter of trade disputes.
US faith in the institution is weak. Mr Trump has called it a “catastrophe” and Wilbur Ross, the US commerce secretary, labelled its efforts a “joke”. However, the wider membership of the WTO remains committed to an international rules-based trading system.
Mr Hands is overseeing the setting up of a UK Trade Remedies Authority (TRA) to take charge of anti-dumping actions.
This body will take on the job of
deciding what goods will be hit with so-called anti-dumping measures. These involve extra taxes being levied on imported goods to prevent them unfairly undermining the competitiveness of UK industry.
Many of those in place at the EU level protect the economic interests of countries very different to the UK’S. Some goods, once freed of these levies at a UK level may become cheaper for consumers. Other future levies may have to be considered and added to goods.
Even though the TRA is not yet legally approved, nearly £9m has been spent on it. Adverts are out for the recruitment of around 100 staff and
efforts are being made to set up an office in Reading.
One trade expert advising on Brexit says that while there are increasingly full-strength teams, there are still not enough people with experience at the top. This risks slowing down decision making. Many of the recruits bolstering key Brexit departments are “not long out of university” and while they are working hard to get up to speed with trade issues, there is a great deal of ground to make up.
Others note that while it has never been such a competitive time for the recruitment of those with expertise in trade – the salaries attached to the TRA job ads might not be high enough to attract top people.
Mr Hands’s most pressing concern about trade policy is getting out of the EU’S customs union cleanly and promptly. Unless or until the UK does leave the customs union, the TRA will not be used.
A plethora of industry bodies are concerned that they will struggle