Does Brexit Britain lean towards embracing free trade or favoring protectionism
To protect or not to protect, that is the question for Brexit Britain.
Britain was taken into its rupture from Europe on the Global Britain ticket, with the promise of liberating new trade deals once it was unfettered by Europe’s stifling protectionist culture.
That’s not a bad mandate for change. However, it would seem that most of those who voted for Brexit missed the memo that free trade works in both directions.
Volatility is the name of the game. Do you have a steel buying strategy that can handle the ups and downs?
UK after Brexit
The U.K. has been successful in rolling over many of the trade deals forged by the E.U. into bilateral agreements. It can now continue with those arrangements in more or less the same guise after Brexit.
Some headline-grabbing new deals are in the cards. Those include ones with Japan and Australia.
But after Britain’s chief negotiator, International Trade Secretary Liz Truss, announced the imminent signing of a new deal with our friends on the other side of the world, howls of protest erupted in the media and among lobby groups against a feared flood of agricultural imports.
The likelihood of such a flood happening is slim and not for our pages here. But over in the heavy metal industries, equally ferocious lobbying has been going on against failure to renew the soon-t0-expire old E.U. protective measures brought in three years ago.
The safeguards cover 19 different steel categories, encompassing 253 products. Those products go into goods ranging from cars and household appliances, rebar used in construction and tubes with applications from pipes to scaffolding, The Telegraph reports.
Yet, in reality, only some of these steel products are actually made in the UK. Meanwhile, a number are not, like stainless steel bars. Nonetheless, the industry is fighting tooth and nail to keep all measures in place, as if the loss of one is the thin end of the wedge that would result in the loss of all.
Safeguards and politics
The Department for International Trade’s new Trade Remedies Authority (TRA) published a preliminary decision last month in which it recommended retaining 10 safeguards for three years. However, it also recommended dropping the other nine, according to The Telegraph.
Much of the industry is located in what is termed the “red wall” constituencies. That is, people in areas that voted for Brexit but also swung from left-wing Labour to right-wing Conservative at the last election. Therefore, they hold a lot of sway in Downing Street, which is anxious to not undermine its newfound support.
The fear among steel consumers is that prices for products that are not even made in this country will remain more elevated than they need to be if all product areas remain under the existing quotas, rather than just protecting those products for which there are viable U.K. manufacturers. Just because the E.U. saw fit to protect a wider range of product areas, reflecting the E.U.’s wider manufacturing capability, that hardly supports the argument the rules should extend carte blanche, metal consumers claim.
The final decision will also illustrate whether post-Brexit Britain is really a champion of free trade or whether that was another argument for Brexit that, when it came to it, drops quietly in favor of business as usual.
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