A Tricky Conservative Conference 2020 for International Trade

By Michael Hartt, Head of International Affairs, and Luke Downham, Senior Account Executive, Public Affairs.


This year’s Conservative Party Conference was meant to be a high-water mark of Boris Johnson’s leadership of a party grateful for the 80-seat majority he handed to them back in December. Instead of basking in the warm glow of an adoring party, the Prime Minister is faced with multiple crises and a battle to resurrect his premiership.

With his handling of COVID-19 causing dozens on the Conservative benches to question his leadership, Johnson has in recent weeks attempted to pivot the Government’s narrative back to familiar territory – Brexit. But he hasn’t found the friendly turf he had anticipated at this year’s Conservative Conference.

Trade talks with the EU have been painfully slow at times, and with this Autumn’s ‘crunch point’ fast approaching, Number 10’s move to re-ignite Brexit tensions through the tabling of the Internal Market Bill can be seen as a double game.

Firstly, the Bill provides Johnson with an opportunity to deflect COVID-driven criticism from his backbenchers and instead sell the benefits of a ‘sovereign’ Britain to grassroots supporters. In spite of the fact that the Withdrawal Agreement, signed by Johnson himself, draws a de facto border down the Irish Sea, some in Westminster believe that the Prime Minister is now using the Bill as a tactic to reassure Brexiteers that he is prepared to atone for what is seen as a poor outcome for the Union.

Conversely, as the end of the Transition Period fast approaches, the Bill also acts as a mechanism to exert maximum pain on both the EU’s Single Market and the Republic of Ireland. The UK’s relatively small size economically compared to the EU means that ignoring key aspects of the Northern Ireland Protocol crystallises a disproportionate threat of a hard border with Northern Ireland if concessions are not made by Brussels to secure a free trade agreement.

However, the costs of such a tactic have been considerable. Faced with an internal rebellion, the Prime Minister backed down and permitted Parliament a say if and when the powers outlined in the Bill are triggered in relation to the Protocol. In Brussels, Johnson has been asking the EU for the ability to self-regulate his Government’s state aid policy from January 2021, an argument now laying in tatters following a decision to essentially break international law. Meanwhile, former Tory Prime Ministers Theresa May, David Cameron and John Major have expressed their dismay at a move that they feel diminishes the UK’s reputation as a reliable partner at a time when it steps out of the EU and into an uncertain world.

The picture internationally is similarly tricky for the Prime Minister.

As the UK looks to advance its future as ‘Global Britain’ through a collection of trade deals, the Internal Market Bill and its ramifications are raising difficult questions in capitals around the world.

In Washington, D.C., Democratic leaders, including Presidential candidate Joe Biden, quickly declared that any action by the British Government that harmed the Good Friday Agreement would be a roadblock to the Prime Minister’s much-desired U.S.-UK trade deal. Some Tory party figures responded with a strong rejection of Biden’s comments, adding another challenge to trade negotiations should the former Vice President, already a Brexit sceptic, win the White House.

Elsewhere, the latest Brexit developments have triggered a raft of concerns at home and abroad about Britain’s commitment to a rules-based international trade order – for so long a foundation of the Conservatives’ worldview.

If a Tory Government is so willing to break one of its most important international agreements to secure its Brexit ambitions, what’s to keep it from doing the same in other trade deals? And how reliable will it be in defending and strengthening an international economic system battered by populist movements, China’s actions and questions about the future of globalisation?

Trade deals require two participants. The unfortunate reality is that ‘Global Britain’ has become a tougher sales pitch over the past few weeks, and it’s unclear if the Government’s subsequent response has eased the damage. While the countries next in line such as Australia, New Zealand and Canada are not going to walk away from trade deals with the UK, they now have a bit more leverage in negotiations – and a bit more reason to push for strict conditions and guarantees.

So whilst Johnson will want to double down at the Conservative Conference on his successes since his landslide victory last year and vision for the future, playing this latest Brexit card almost certainly makes his longer-term trade agenda tougher to achieve, even as it energises the Tory membership. While it may secure his position and buy him more time to re-frame the Government’s priorities, it also potentially sets up the Prime Minister for a long, dark winter on international trade.