Battle for influence underway as British government starts setting independent trade policy.
The push and pull between the major players will determine how pro-free trade or protectionist Britain will ultimately be. Here's POLITICO's guide to the people to watch:
Graeme Robertson/Getty Images
Harding attributes the U.K.'s change in approach to the Cabinet Office and No. 10. Downing Street. U.K. prime ministers have a small staff in No. 10 itself and are supported in the implementation of their agenda by the Cabinet Office, currently overseen by Michael Gove.
“A lot of what’s going on is out of the U.S. administration’s playbook,” Harding said, likening Liz Truss’ role to U.S. Trade Representative Robert Lighthizer's, as she charges around the world on behalf of Britain. Foreign Secretary Dominic Raab is wielding sanctions — playing Secretary of State Mike Pompeo and Peter Navarro, assistant to the president and director of trade and manufacturing policy.
“It’s not necessarily about industrial policy anymore ... it’s more about our strategic position in the world,” Harding said, noting this is driven at the No. 10 and Cabinet Office level.
A former DIT aide agreed that “trade policy now is being run out of No. 10” and said the government is being “driven by centralization at the top.”
But no single person is centrally coordinating the issue, several of the former officials said, pointing out that it’s important to have someone who understands how trade policy is linked to business and economic policy.
“There are big trade-offs if you agree to something with the EU that makes it more difficult to trade with the U.S.,” said a former DIT official. In the end, “we’ve got one department that has a pretty clear objective going one way and another department with an objective going the other way.”
Groups that represent big business in the U.K. say there’s no one to champion their interests either, according to two advisers for large companies.
Chris J Ratcliffe/Getty Images
The longest-surviving member of the British Cabinet, Gove now plays a pivotal role in decision-making on trade — co-chairing the U.K.-EU Withdrawal Agreement Joint Committee, which oversees the implementation of the Brexit divorce deal — with European Commission Vice President Maroš Šefčovič. He also chairs the EU exit operations Cabinet committee, known as XO, a small group of senior ministers responsible for planning for the end of the transition period.
“He’s a much bigger player,” the former aide said. “It feels like DIT now is a symbolic department more than anything.”
If the government moves in a more protectionist direction on an issue, it’s likely to make the job of DIT harder.
One specific area where Gove's influence has been visible is over the debate over food standards between DIT and the Department for Environment, Food and Rural Affairs (DEFRA). Gove, who headed DEFRA until last year, has defended farmers’ interests and has clashed with Truss and her team, who are more sympathetic to U.S. demands for lower standards.
“We’ve seen Liz Truss has already lost one of the biggest battles, which was this debate between agricultural food standards,” said the aide, though others counter that this fight is ongoing.
“The idea of free trade within the Tory Party is absolutely fascinating,” said one former trade official. “You’ve also got what has historically been the Tory heartland of farmers suddenly hearing about American food standards, which gets them really riled up.”
Kenzo Tribouillard/AFP via Getty Images
As U.K. chief Brexit negotiator, David Frost is extremely powerful and well-trusted by No. 10.
Frost advised Johnson when he headed the Foreign Office and was hand-picked to return to the highest levels of government when Johnson became prime minister. He now runs Taskforce Europe, which reports directly to No. 10.
Frost’s deputy Matthew Taylor is said to be coordinating with DIT’s chief of negotiations with the U.S., Oliver Griffiths, and Frost also speaks to Falconer at the trade department. At various points this year, Frost has held discussions with other senior government officials about trade issues beyond Brexit talks, weighing in on negotiations with the U.S. and elsewhere, according to people familiar with the discussions.
Last month, Frost was appointed to replace Johnson’s most senior official, Mark Sedwill, as national security adviser at the end of the summer, underscoring the U.K.'s geopolitical approach to trade.
Jeff J Mitchell/Getty Images
Since his appointment as foreign secretary when Johnson became prime minister in July 2019, Dominic Raab has said more and more about trade.
Raab was off to the U.S. last August to talk trade, well before Truss. Then in February, he was in Australia working to smooth the way for trade negotiations before talks officially began in June.
Whenever he does a visit abroad he’s always very trade-focused, said a former DIT aide. “It’s really unusual that the foreign secretary should be so forthcoming about global trade when we’ve got a trade minister.”
During these initial diplomatic trips, Raab gets a chance to frame how he sees potential trade negotiations.
“The big thinking around trade is going on in the Foreign Office,” said Harding, calling it a “very significant shift” from the way things have been done in the past. The trade department has even been tipped to merge with FCO.
Ross Setford/Getty Images
Falconer is DIT’s chief trade negotiations adviser and second permanent secretary, the second-most senior official in the department. A dual citizen, he was once New Zealand’s chief trade negotiator and was brought in by Liam Fox in 2017 to bolster the U.K. government’s trade capability.
“He is not someone who naturally is a Whitehall operator,” said another former DIT official. “He didn’t grow up in the system, and doesn't have the historical relationships that permanent secretaries within the different departments have had.”
In his role as chief negotiator, Falconer works to ensure continuity between the different free-trade agreements and “that’s where he’s been focused,” they said.
Paul Ellis/AFP via Getty Images
As other players have come to drive the trade agenda, the position of Truss and DIT has taken on a new dimension.
In important instances, Truss' free-trading philosophy has lost out to more protectionist inclinations. “A lot of the decision-making has been taken away from Liz Truss,” said a former DIT aide. “She gets the fun but less important bits of trade policy, which are the export and investment side.”
Truss is often touted as someone at risk of being sacked at the next Cabinet reshuffle. This indicates, said the former aide, that the government “do not want her to feel comfortable and secure in her role.”
She nonetheless spearheads many initiatives and led early talks last week with ambassadors from 11 countries of the Progressive Trans-Pacific Partnership (CPTPP) as the U.K. works to join the trading bloc.
Talks with the U.S. and Japan are the priorities. (Talks with the EU are overseen by Frost's team.) Oliver Griffiths, who for 11 years specialized in trade policy both in London and in the British Embassy in Washington D.C., is chief negotiator of the U.S. deal.
Graham Zebedee is the chief negotiator for the deal with Japan. Previously he oversaw U.K. efforts to roll over 70 trade agreements brokered by the EU so Britain could continue to benefit after it left the bloc. Another important figure is Amanda Brooks, who is in charge of trade remedies and the WTO.
Although others may prepare strategy at a higher level, these officials are the ones who will be working out the details of what’s agreed at a political level.
Emilio Casalicchio contributed reporting.
**This article is part of Pro Trade UK, POLITICO’s new premium policy intelligence service for professionals. To celebrate the launch we’re offering complimentary access to Morning Trade UK, the daily morning briefing, until early September. Sign up here for free.**
