Currently 73% of all UK agricultural imports come from the EU. That heavy dependence sparked a report by the British parliament expressing concern about the UK’s food security in the immediate aftermath of Brexit.

Meanwhile, Latin America’s agricultural powerhouses Brazil and Argentina only accounted for a total of 1.6% of the UK’s agricultural market across eight sectors in 2018. A growing relationship would seem to be an obvious fit post-Brexit – but a number of structural issues stand in the way.

There is certainly scope for increasing Latin American agricultural exports to the UK given current trade patterns. Two of the main agricultural imports that the UK buys from the EU are meat products, representing 82% of UK imports in that category, and dairy products and eggs; 98% of UK’s dairy- and egg-related external supply came from the EU. In both these areas, Brazil and Argentina could have comparative advantages, including lower prices.

But any improvement in agricultural trade links will depend on two factors: 1) how the UK leaves the EU: whether it crashes out, negotiates an easy exit or leaves at all; and 2) whether Latin American agricultural producers can improve their environmental practices and can meet the production standards established by the EU and likely maintained by a post-Brexit Britain.

Some of the key issues that will affect this are:

Tariff structures

On the UK side, there is pressure by domestic agricultural producers to raise UK tariffs to allow them to expand their local market share. Yet, despite the pressures from local farmers, the UK has laid out two scenarios.

In one case, the UK government has stated that in the event of a no-deal Brexit, tariffs will be lowered to 0%, but there is no firm commitment and this would likely be temporary. It is also unlikely that those would apply to all agricultural products. In the case of beef imports (of which Argentina and Brazil are major exporters), the UK has proposed that ‘no deal’ would bring a reduction on tariffs on a range of beef products of roughly half.

Meanwhile, tariffs on EU imports could go up. Even if the UK establishes 0% tariffs on EU products, it’s possible that the EU will not reciprocate, instead choosing to revert to the World Trade Organization’s most-favoured-nation tariffs. To take one example of what that would mean, under existing most-favoured-nation tariffs on beef, the tariffs range from €6.80 per 100 kilograms of full bovine carcasses or half carcasses all the way up to €161.10 for 160 kilograms of prepared or preserved meat, including sausages.

Free trade agreements between the EU and Latin American countries

The EU has free trade agreements with the Central American bloc of Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama; Mexico; Chile; and the Andean countries of Colombia, Ecuador, and Peru. In all those cases, the UK has expressed its desire to maintain its liberal trade framework with those countries.

Even if the UK leaves without a deal and tariffs do increase on EU agricultural exports, though, these Western Hemisphere economies are unlikely to see a large boost in their food exports to the UK. Chile and other large fruit producers are already locked into the Chinese market. And the real agricultural powerhouses, Argentina and Brazil, are now part of the EU trade agreement with Mercosur.

Since that agreement is not yet in force, the UK and Mercosur would need to negotiate a separate agreement. Such an agreement may be easier to ratify than the EU agreement since there is only one partner (the UK) for such a deal, but the likely change in government in Argentina after the 27 October elections may make it difficult to secure a deal on the Mercosur side.

Some EU trade agreements also include arrangements for tariff rate quotas. An EU quota with Argentina, for example, allows more than 280,000 tonnes of lamb to be imported to the EU duty free from Argentina, among other countries. It is unclear whether these quotas will be maintained or even expanded by the UK post-Brexit.  

Phytosanitary standards and rules governing the treatment of animals

Non-tariff barriers concerning production practices could play a key role. The large UK consumer organization Which? raised the concern before parliament that in the scramble to replace EU food imports, the UK could diverge from EU standards on animal cloning, the use of growth hormones and hygiene in poultry production. Pressure to maintain those standards would likely exclude many products from South America.

Beyond the regulatory barriers, there is also the possibility that UK consumers may reject agricultural products produced in less sustainable and humane conditions, or in countries (such as Brazil) that are seen by the public as abusing the environment.

In short, an increase in Latin American agricultural exports to the UK market may not happen as easily or as quickly as some hope after Brexit. In fact, it may not happen at all. But if Latin American countries – Argentina and Brazil in particular – want to capture this potential new market, the first step both should be to improve their environmental profile and standards at both the government and producer level.

This week the UK will start negotiating its future relationship with the European Union. The government is trying to convince the EU that it is serious about its red lines and is prepared to walk away from negotiations if the UK’s ‘regulatory freedom’ is not accepted – a no-deal scenario that would result in tariffs between the EU and the UK. Yet at the same time the story it is telling the world is that Britain is ‘re-emerging after decades of hibernation as a campaigner for global free trade’, as Boris Johnson put it in his speech in Greenwich a few weeks ago.

The EU is understandably confused. It’s a bit odd to claim to be campaigning for free trade at the exact moment you are creating new barriers to trade. If Britain were so committed to frictionless trade, it wouldn’t have left the EU in the first place – and having decided to leave, it would have sought to maintain a close economic relationship with the EU, like that of Norway, rather than seek a basic trade deal like Canada’s. 

As well as creating confusion, the narrative also absurdly idealizes free trade. Johnson invoked Richard Cobden and the idea that free trade is ‘God’s diplomacy – the only certain way of uniting people in the bonds of peace since the more freely goods cross borders the less likely it is that troops will ever cross borders’. But the idea that free trade prevents war was shattered by the outbreak of the First World War, which brought to an end the first era of globalization.

We also know that the domestic effects of free trade are more complex and problematic than Johnson suggested. Economic liberalization increases efficiency by removing friction but also creates disruption and has huge distributional consequences – that is, it creates winners and losers. In a democracy, these consequences need to be mitigated.

In any case, the world today is not the same as the one in which Cobden lived. Tariffs are at a historically low level – and many non-tariff barriers have also been removed. In other words, most of the possible gains from trade liberalization have already been realized. Johnson talked about the dangers of a new wave of protectionism. But as the economist Dani Rodrik has argued, the big problem in the global economy is no longer a lack of openness, it is a lack of democratic legitimacy.

The UK should therefore abandon this confusing and misleading narrative and own the way it is actually creating new barriers to trade – and do a better job of explaining the legitimate reasons for doing so. Instead of simplistically talking up free trade, we should be talking about the need to balance openness and economic efficiency with democracy and a sense of control, which is ultimately what Brexit was all about. Instead of claiming to be a ‘catalyst for free trade’, as Johnson put it, the UK should be talking about how it is trying to recalibrate globalization and, in doing so, make it sustainable.

In the three decades after the end of the Cold War, globalization got out of control as barriers to the movement of capital and goods were progressively removed – what Rodrik called ‘hyper-globalization’ to distinguish it from the earlier, more moderate phase of globalization. This kind of deep integration necessitated the development of a system of rules, which have constrained the ability of states to pursue the kind of economic policy, particularly industrial policy, they want, and therefore undermined democracy.

Hyper-globalization created a sense that ‘the nation state has fundamentally lost control of its destiny, surrendering to anonymous global forces’, as the economist Barry Eichengreen put it. Throughout the West, countries are all struggling with the same dilemma – how to reconcile openness and deep integration on the one hand, and democracy, sovereignty and a sense of control on the other.

Within the EU, however, economic integration and the abolition of barriers to the movement of capital and goods went further than in the rest of the world – and the evolution of the principle of freedom of movement after the Maastricht Treaty meant that barriers to the internal movement of people were also eliminated as the EU was enlarged. What happened within the EU might be thought of as ‘hyper-regionalization’ – an extreme example, in a regional context, of a global trend.

EU member states have lost control to an even greater extent than other nation states – albeit to anonymous regional rather than global forces – and this loss of control was felt intensely within the EU. It is therefore logical that this led to an increase in Euroscepticism. Whereas the left wants to restore some barriers to the movement of capital and goods, the right wants to restore barriers to the movement of people.

However, having left the EU, the UK is uniquely well placed to find a new equilibrium. The UK has an ideological commitment to free trade that goes back to the movement to abolish the Corn Laws in the 1840s – which Johnson’s speech expressed. It is difficult to imagine the UK becoming protectionist in any meaningful sense. But at the same time, it has a well-developed sense of national and popular sovereignty, and the sense that the two go together – which is why it was so sensitive to the erosion of them through the EU. This means that Britain is unlikely to go to one extreme or the other.

In other words, the UK may be the ideal country to find a new balance between openness and integration on the one hand, and a sense of control on the other. If it can find this balance – if it can make Brexit work – the UK could be a model for a wider recalibration of sustainable globalization. That, rather than fetishizing free trade, is the real contribution the UK can make.

A version of this article was originally published in the Observer.

With the IMF forecasting a 6.1% fall in advanced economy GDP in 2020 and world trade expected to contract by 11%, there is intense focus on the question of how and when to re-open economies currently in lockdown.

But no ‘opening up’ plan has a chance of succeeding unless it commands the confidence of all the main actors in the economy – employees, consumers, firms, investors and local authorities.

Without public confidence, these groups may follow official guidance only sporadically; consumers will preserve cash rather than spend it on goods and services; employees will delay returning to work wherever possible; businesses will face worsening bottlenecks as some parts of the economy open up while key suppliers remain closed; and firms will continue to delay many discretionary investment and hiring decisions.

Achieving public confidence

Taken together, these behaviours would substantially reduce the chances of a strong economic bounce-back even in the absence of a widespread second wave of infections. Five key steps are needed to achieve a high degree of public confidence in any reopening plan.

First, enough progress must be made in suppressing the virus and in building public health capacity so the public can be confident any new outbreak will be contained without reverting to another full-scale lockdown. Moreover, the general public needs to feel that the treatment capacity of the health system is at a level where the risk to life if someone does fall ill with the virus is at an acceptably low level.

Achieving this requires the government to demonstrate the necessary capabilities - testing, contact tracing, quarantine facilities, supplies of face masks and other forms of PPE (personal protective equipment) - are actually in place and can be sustained, rather than relying on future commitments. It also needs to be clear on the role to be played going forward by handwashing and other personal hygiene measures.

Second, the authorities need to set out clear priorities on which parts of the economy are to open first and why. This needs to take account of both supply side and demand side factors, such as the importance of a particular sector to delivering essential supplies, a sector’s ability to put in place effective protocols to protect its employees and customers, and its importance to the functioning of other parts of the economy. There is little point in opening a car assembly plant unless its SME suppliers are able to deliver the required parts.

Detailed planning of the phasing of specific relaxation measures is essential, as is close cooperation between business and the authorities. The government also needs to establish a centralised coordination function capable of dealing quickly with any unexpected supply chain glitches. And it must pay close attention to feedback from health experts on how the process of re-opening the economy sector-by-sector is affecting the rate of infection.  

Third, the government needs to state how the current financial and economic support measures for the economy will evolve as the re-opening process continues. It is critical to avoid removing support measures too soon, and some key measures may have to continue to operate even as firms restart their operations. It is important to show how - over time - the measures will evolve from a ‘life support’ system for businesses and individuals into a more conventional economic stimulus.

This transition strategy could initially be signalled through broad principles, but the government needs to follow through quickly by detailing specific measures. The transition strategy must target sectors where most damage has been done, including the SME sector in general and specific areas such as transport, leisure and retail. It needs to factor in the hard truth that some businesses will be no longer be viable after the crisis and set out how the government is going to support employees and entrepreneurs who suffer as a result.

The government must also explain how it intends to learn the lessons and capture the upsides from the crisis by building a more resilient economy over the longer term. Most importantly, it has to demonstrate continued commitment to tackling climate change – which is at least as big a threat to mankind’s future as pandemics.

Fourth, the authorities should explain how they plan to manage controls on movement of people across borders to minimise the risk of new infection outbreaks, but also to help sustain the opening-up measures. This needs to take account of the fact that different countries are at different stages in the progress of the pandemic and may have different strategies and trade-offs on the risks they are willing to take as they open up.

As a minimum, an effective border plan requires close cooperation with near neighbours as these are likely to be the most important economic counterparts for many countries. But ideally each country’s plan should be part of a wider global opening-up strategy coordinated by the G20. In the absence of a reliable antibody test, border control measures will have to rely on a combination of imperfect testing, quarantine, and new, shared data requirements for incoming and departing passengers.  

Fifth, the authorities must communicate the steps effectively to the public, in a manner that shows not only that this is a well thought-through plan, but also does not hide the extent of the uncertainties, or the likelihood that rapid modifications may be needed as the plan is implemented. In designing the communications, the authorities should develop specific measures to enable the public to track progress.

Such measures are vital to sustaining business, consumer and employee confidence. While some smaller advanced economies appear close to completing these steps, for many others there is still a long way to go. Waiting until they are achieved means higher economic costs in the short-term. But, in the long-term, they will deliver real net benefits.

Authorities are more likely to sustain these measures because key economic actors will actually follow the guidance given. Also, by instilling confidence, the plan will bring forward the consumer and business decision-making crucial to a strong recovery. In contrast, moving ahead without proper preparation risks turning an already severe economic recession into something much worse.

With the IMF forecasting a 6.1% fall in advanced economy GDP in 2020 and world trade expected to contract by 11%, there is intense focus on the question of how and when to re-open economies currently in lockdown.

But no ‘opening up’ plan has a chance of succeeding unless it commands the confidence of all the main actors in the economy – employees, consumers, firms, investors and local authorities.

Without public confidence, these groups may follow official guidance only sporadically; consumers will preserve cash rather than spend it on goods and services; employees will delay returning to work wherever possible; businesses will face worsening bottlenecks as some parts of the economy open up while key suppliers remain closed; and firms will continue to delay many discretionary investment and hiring decisions.

Achieving public confidence

Taken together, these behaviours would substantially reduce the chances of a strong economic bounce-back even in the absence of a widespread second wave of infections. Five key steps are needed to achieve a high degree of public confidence in any reopening plan.

First, enough progress must be made in suppressing the virus and in building public health capacity so the public can be confident any new outbreak will be contained without reverting to another full-scale lockdown. Moreover, the general public needs to feel that the treatment capacity of the health system is at a level where the risk to life if someone does fall ill with the virus is at an acceptably low level.

Achieving this requires the government to demonstrate the necessary capabilities - testing, contact tracing, quarantine facilities, supplies of face masks and other forms of PPE (personal protective equipment) - are actually in place and can be sustained, rather than relying on future commitments. It also needs to be clear on the role to be played going forward by handwashing and other personal hygiene measures.

Second, the authorities need to set out clear priorities on which parts of the economy are to open first and why. This needs to take account of both supply side and demand side factors, such as the importance of a particular sector to delivering essential supplies, a sector’s ability to put in place effective protocols to protect its employees and customers, and its importance to the functioning of other parts of the economy. There is little point in opening a car assembly plant unless its SME suppliers are able to deliver the required parts.

Detailed planning of the phasing of specific relaxation measures is essential, as is close cooperation between business and the authorities. The government also needs to establish a centralised coordination function capable of dealing quickly with any unexpected supply chain glitches. And it must pay close attention to feedback from health experts on how the process of re-opening the economy sector-by-sector is affecting the rate of infection.  

Third, the government needs to state how the current financial and economic support measures for the economy will evolve as the re-opening process continues. It is critical to avoid removing support measures too soon, and some key measures may have to continue to operate even as firms restart their operations. It is important to show how - over time - the measures will evolve from a ‘life support’ system for businesses and individuals into a more conventional economic stimulus.

This transition strategy could initially be signalled through broad principles, but the government needs to follow through quickly by detailing specific measures. The transition strategy must target sectors where most damage has been done, including the SME sector in general and specific areas such as transport, leisure and retail. It needs to factor in the hard truth that some businesses will be no longer be viable after the crisis and set out how the government is going to support employees and entrepreneurs who suffer as a result.

The government must also explain how it intends to learn the lessons and capture the upsides from the crisis by building a more resilient economy over the longer term. Most importantly, it has to demonstrate continued commitment to tackling climate change – which is at least as big a threat to mankind’s future as pandemics.

Fourth, the authorities should explain how they plan to manage controls on movement of people across borders to minimise the risk of new infection outbreaks, but also to help sustain the opening-up measures. This needs to take account of the fact that different countries are at different stages in the progress of the pandemic and may have different strategies and trade-offs on the risks they are willing to take as they open up.

As a minimum, an effective border plan requires close cooperation with near neighbours as these are likely to be the most important economic counterparts for many countries. But ideally each country’s plan should be part of a wider global opening-up strategy coordinated by the G20. In the absence of a reliable antibody test, border control measures will have to rely on a combination of imperfect testing, quarantine, and new, shared data requirements for incoming and departing passengers.  

Fifth, the authorities must communicate the steps effectively to the public, in a manner that shows not only that this is a well thought-through plan, but also does not hide the extent of the uncertainties, or the likelihood that rapid modifications may be needed as the plan is implemented. In designing the communications, the authorities should develop specific measures to enable the public to track progress.

Such measures are vital to sustaining business, consumer and employee confidence. While some smaller advanced economies appear close to completing these steps, for many others there is still a long way to go. Waiting until they are achieved means higher economic costs in the short-term. But, in the long-term, they will deliver real net benefits.

Authorities are more likely to sustain these measures because key economic actors will actually follow the guidance given. Also, by instilling confidence, the plan will bring forward the consumer and business decision-making crucial to a strong recovery. In contrast, moving ahead without proper preparation risks turning an already severe economic recession into something much worse.