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LONDON — And so ends the first era of Global Britain — not with Johnsonian bluster, but with Sunakian prudence.
Rishi Sunak’s decision to merge the trade and business departments is a clear departure from Boris Johnson’s post-Brexit policymaking, and confirms what has been clear to close observers for months — that the current U.K. prime minister is not prioritizing big new trade deals.
Instead, Sunak is chasing less sexy goals, such as boosting exports and increasing inward foreign direct investment, and hopes his Whitehall merger will better align those aims with Britain’s wider business policy.
It’s a far cry from the flashy attempts of Johnson and his Trade Secretary Liz Truss— who briefly succeeded him as prime minister— to use the now-abolished Department for International Trade (DIT) as a way to sell “Brand Britain” around the world and secure post-Brexit PR wins.
“Liz Truss thought trade was all about trade deals, which it’s not,” said one former U.K. trade minister, speaking anonymously. While headline-grabbing agreements are certainly worth exploring, the same person said, less “glamorous” tasks such as tackling trade barriers are “much more important.”
“[Business and Trade Secretary] Kemi Badenoch gets that, whereas Liz Truss didn’t,” the ex-minister added. Badenoch’s newly-expanded Whitehall empire is unlikely to hurt her popularity among the Conservative grassroots, with whom she’s already a firm favorite.
The move to scrap DIT came as part of a wide-ranging shake-up of Whitehall on Tuesday by Sunak, who, as well as culling the dedicated trade department, is setting up a ministry focused on energy and another with its eye on tech and science.
Busting barriers
The initial response to the Whitehall rejig was largely positive — although some are questioning whether it will eat up valuable government time at a moment when Sunak has little to waste.
One current business and trade minister, also speaking anonymously, said it “made sense” in their eyes to link the trade portfolio more closely with business and industrial strategy.
The creation of DIT was one of then-Prime Minister Theresa May’s first acts in office following the EU referendum, with the shiny new department — which swallowed up the existing U.K. Trade and Investment wing of the business ministry — created just a day after she entered No. 10 Downing Street in July 2016. It was billed by her government as one of the central pillars in the U.K.’s efforts to make the most of Brexit.
The department certainly racked up quick successes by rolling over copy-and-paste EU trade deals with a long list of overseas nations.
However, plenty of senior figures have questioned the value of the U.K.’s subsequent newly-inked trade deals — including Sunak himself.
He said during last year’s Tory leadership contest that the U.K.-Australia trade deal was rushed, and “one-sided.” Sunak told rural audiences that both the Australian and New Zealand trade deals — which have been criticized by the U.K.’s farming lobby — had conceded too much on agricultural imports, for too little in return.
What was once seen as the department’s biggest prize — a U.S. trade deal — has meanwhile eluded successive trade secretaries and is unlikely to happen in the foreseeable future. There are hopes within the government that Badenoch will instead seal a deal with India and secure accession to the 11-country CPTPP trading bloc this year.
The trade minister quoted above said: “A lot of the trade deals have been done, whether that’s through the rollover deals or some of the new ones we’ve signed. What we need to do now is break down other trade barriers and focus on tariffs and trade remedies, which have sometimes been overlooked.”
Alexander Horne, visiting professor at Durham University and an ex-Whitehall lawyer, agreed that the “low-hanging fruit” is now gone and said the departmental merger therefore “makes sense.”
Farewell to boosterism
Sunak’s political opponents see the shake-up as a clear downgrading of the trade agenda, though that was vociferously denied by Sunak’s official spokesman on Tuesday. He said it was simply “a recognition that business and trade naturally go together.”
But what is clear is that Sunak sees a very different role for trade policy in his government. With less than than two years before the next general election, there is little parliamentary time to push through new trade deals, and the government’s focus is now largely on domestic policy.
Badenoch is therefore expected to focus on increasing British market access overseas by unlocking trade treaties in areas including digital and financial services. The business and trade secretary said in a speech last month that one of her top priorities would be to “make the U.K. the undisputed top investment destination in Europe.”
Marco Forgione, director general of the Institute of Export & International Trade, said Tuesday’s Whitehall shake-up could help achieve that goal, describing the merger as “an opportunity to better integrate exports within the wider U.K. growth strategy.”
“There needs to be a focus on doing what is best to stimulate growth through international trade,” he argued.
Departmental mergers may sound overly-technical to some in Westminster — and it’s a charge frequently leveled at a PM widely viewed as a technocrat. But they symbolize one of the core differences between Sunak and the gung-ho Johnson.
Johnson was never more comfortable than giving a tub-thumping speech to sell Britain as a buccaneering wellspring of genius. Sunak appears more likely to submerge himself in the detail of global trade and investment patterns.
With his shuffle of the government machinery, the prime minister will be hoping to put the Johnson era of bluster and boosterism behind him, and promote a very different vision of Britain around the world.
