You must accept them if you want a free trade deal but they can mean many different thingsby David Henig / December 19, 2019 / Leave a comment
The latest phrase to break out of wonkish obscurity into the mainstream thanks to Brexit is “level playing field.” Obviously the broad definition is well understood, as in making sure of a fair contest, but the relevance to international trade less so. We in the UK should perhaps know better, given that fair competition was at the heart of many of the social measures of the EU that we didn’t like, and which were accompaniments to the single market, which we did. Like many things, now outside the EU we’re going to have to learn quickly.
Put simply, in trade policy terms, virtually all agreements, from WTO rules to a Free Trade Agreement to a Customs Union, are subject to level playing field rules to ensure no party is able to gain unfair advantage. The closer the relationship, removing more barriers to trade, the more rigorous the terms of these rules. In the last few weeks we’ve seen evidence of this from a perhaps unexpected source, with the US insisting on stringent conditions that Mexico must follow in the US-Mexico-Canada agreement that will replace NAFTA, the North American Free Trade Agreement.
The UK will therefore be signing up to level playing field provisions in its future trade agreements. Indeed we already have signed up to some, both in our continuity agreements replacing EU trade agreements with third countries, and in the Withdrawal Agreement. For example in the latter we have agreed that measures on EU state aid, which is defined by government as “using taxpayer-funded resources to provide assistance to one or more organisations in a way that gives an advantage over others,” apply to the UK in respect of trade between Northern Ireland and the EU.
Restrictions on such state aid are one of the most common level playing field items included in a trade deal. Boris Johnson’s campaign suggestion of a more lax regime is likely to come to nothing if he wants trade agreements.
But there is no fixed definition of what constitutes a level playing field in trade terms, and typically the negotiating partner with the larger market will be the one most concerned about fair access to that…