Industry

15 JAN 2019

TIME TO SPEAK UP IN DEFENCE OF INTERNATIONAL TRADE

Global trade and the terms on which it is conducted is high on the political agenda and raising some key challenges for the infrastructure sector, says Andy Walker.

The continuing uncertainty around Brexit and the UK’s future relations with Europe and the rest of the world has highlighted the issue of trade and access to open markets and borders. The issue of global trade and the terms on which it is conducted is high on the political agenda and US president Donald Trump’s sabre rattling around protectionism and trade tariffs with China and Europe has increased concerns even further.

Recent months have seen a heightened debate around trade policy that we haven’t seen for many years. If the UK eventually leaves the European common market and customs area, then it will need to negotiate trade agreements with other countries. While the hope is that it will be able to inherit a number of the EU agreements that already exist, if this is not possible the UK will need to negotiate fresh trade deals with other countries around the world.

Julian Francis, director of external and public affairs at the Association for Consultancy and Engineering (ACE) said he was concerned at the growing international moves towards protectionism and other restrictions on global trade. “We see Trump’s tariff war with China, China saying that the international tariff and trade system doesn’t work for them and India’s prime minister Modi also making similar noises about reforming the trading environment. Not since the fall of the Soviet Union have we seen so many countries talking about changing the way that international trade is done,” said Francis.

"Not since the fall of the Soviet Union have we seen so many countries talking about changing the way that international trade is done."
Julian Francis, director of external and public affairs, ACE

Francis said that ACE needed to work through its international federation FIDIC to promote a free trade message. “If we are talking about the global trading environment for engineering, technical and consultancy services, then FIDIC should be the organisation that is going to the World Bank and the World Trade Organisation banging the table saying that we need free trade and we can’t go back to protectionism,” Francis said. “China cannot protect its domestic market behind high tariff walls and demand equal access to European markets for example,” he said. 

It was also important, said Francis, for ACE to promote its members’ interests and get them used to the fact that they are going to have to start being aware of what they want from trade agreements. “If we do have an Anglo-American trade agreement we’re going to have to know what access we want. America is going to be very clear – it’s going to want access to our health service and food market but whether the US consulting engineering industry is going to be happy with suddenly British firms having equal access to the American market is doubtful,” Francis said.

Agreeing what market access consulting engineers are going to need to sell their services will be crucial going forward, said Francis, but key challenges would arise. “If we have a future trade agreement with the EU we need to be very clear about what services we want to be able to sell. If there is a comparative domestic barrier within the EU, then we can have one here to protect our own industry and so it has to be a quid pro quo. I also think we are going to have to start asking searching questions for example about when the last time was that a UK firm won a French engineering contract,” he said.

International political developments dictated by the rise of popularism are leading to a situation where international trade is being adversely affected by policies which demand the promotion of countries’ domestic economies over international players. The consultancy and engineering sector needs to demonstrate how the industry’s diverse range of skills can improve the quality of life for people internationally and show that having access to those skills and expertise can make a big difference globally.

“We need a free trade global environment in which firms can operate and sell their services internationally including in the European and North American markets. If trade barriers suddenly go up all over the world you won’t have that and economically it will be a very dangerous situation to be in,” Francis warned.

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