Post-Brexit trade policy must encourage 'race to the top' on environmental standards, business giants urge
A coalition of business leaders is urging Ministers to ensure that post-Brexit Free Trade Agreements (FTAs) not only include non-regression clauses on environmental standards, but actively promote stronger requirements on a global scale.
The call to action is being made in the latest report from the Aldersgate Group, an alliance of dozens of business and civil society leaders dedicated to embedding more ambitious environmental provisions across their own organisations and in broader policy. Aldersgate Group members include Tesco, BT and Ikea.
Entitled ‘seize the moment’, the Group’s report calls for all future FTAs to include reciprocal commitments to the Paris Agreement and a binding non-regression clause. The UK is notably negotiating an FTA with the US at present – the only major developed economy not committed to the Paris Agreement, after President Trump’s administration pulled the nation out of the accord.
All future FTAs should additionally contain measures to remove barriers to the trade of low-carbon goods and environmental services, such as prohibitively high tariffs, and a legally binding right for either party to increase environmental or climate standards, the report argues. Such moves could help both parties reap their fair share of the global low-carbon goods market, forecast to surpass £1trn by 2030, while ensuring that they can adequately respond to future climate events and improved scientific research.
Aside from the FTAs themselves, the report urges the upcoming Trade Bill to guarantee that all Agreements receive “adequate parliamentary scrutiny and stakeholder engagement” “well ahead” of their ratification. This would enable time for in-depth sustainability impact assessments.
“A comprehensive programme for stakeholder engagement within and beyond the Strategic Trade Advisory Group will be necessary to seriously consider the risks, opportunities and transition impacts that new trade arrangements can have on big businesses, SMEs, civil society and consumers – with a fair balance of engagement across these categories,” the document states.
Also highlighted is the need to “look beyond FTAs and also use bilateral trade negotiations and multilateral fora to boost low-carbon trade”, given that these routes are often quicker, and that speed will be of the essence in responding to the climate crisis and the impending recession, in which more than 600,000 Brits have already lost their jobs. The UN and the World Trade Organisation (WTO) are mooted as suitable multilateral fora, in spite of criticism of the latter by thought-leaders such as Naomi Klein.
Finally, the Aldersgate Group reiterates its previous demands for stronger domestic policies designed to spur a just low-carbon transition which boosts the national economy. The Group would like to see fresh mandates for reducing emissions applied to businesses in industries such as steel and cement, higher carbon pricing and mandatory climate reporting in line with the Task-Force on Climate-Related Disclosures (TCFD).
“FTAs could strengthen the UK’s competitive advantage in the growing global market for low-carbon goods and services and increase the UK’s international standing by promoting high environmental standards and global climate co-operation - but without the right provisions, these agreements could make it harder for the UK to achieve its domestic targets and could create an uneven playing field for British businesses forced to compete with imports abiding by lower climate and environmental standards,” Aldersgate Group executive director Nick Molho said.
“Existing free trade agreements have paid insufficient attention to environmental and climate considerations, with environmental terms often playing second fiddle to economic terms. With the business community strongly behind the UK’s environmental and climate ambitions, the Global Britain agenda should be about creating a first of a kind trade policy that puts environmental and clean growth considerations at the heart of future trade deals.”
Right place, right time
The publication of the report comes less than a week before the UK is due to begin FTA agreements with Australia and New Zealand. New Zealand, like the UK, has enshrined a 2050 net-zero target in law, with experts concluding that the nation is well-positioned to make this transition. Australia is currently mulling a 2050 net-zero target, recommended by major businesses, think-tanks and opposition ministers, but has not yet bolstered its climate targets. The UK is also progressing negotiations with the US and EU at this time.
Furthermore, the Trade Bill is currently passing through the House of Commons.
As for the Aldersgate Group, the organisation recently published its policy briefing on the UK’s Covid-19 recovery package.