Devolution versus Global Britain. Fight!

Devolution poses a problem for Global Britain.

Up until now it has worked in large part thanks to EU rules creating a framework within which divergence can exist, but not to the point of market distortion.

Brexit rips this framework away.

If the government wants to negotiate its own trade deals – to become Global Britain in a world where regulation matters more than tariffs – it can’t have all four countries of the UK doing their own thing. There will need to be a UK framework setting minimum, and perhaps maximum, levels of regulation, subsidies and the like.

This will prove controversial.

Let’s take agriculture as an example.

Agriculture is currently a devolved competence. However, this is enacted within the constraints of the EU aquis. From the perspective of a trade negotiator, having four countries with divergent subsidy and regulatory regimes makes things very difficult indeed. To ensure this doesn’t happen, a framework will likely need to be set at a Whitehall level. Powers will need to be repatriated both from the EU and the Devolved nations.

Scotland will not like this. Not one bit.

Now, this is not to say divergence and trade cannot co-exist. The US, for example, has quite a bit of divergence. Some States have buy America procurement provisions, some don’t. Some have sales taxes, some don’t. And then there’s services …

But divergence does cause problems, and does limit what the US can practically offer up when negotiating a trade deal.

Divergence can also cause problems within the internal market. After years of provincial strife Canada is now close to signing a trade agreement with itself.

So the government has a choice. Global Britain, devolution as it exists, or a compromise. All have trade-offs, and there is no perfect solution. The cake will be eaten, eventually.

@SamuelMarcLowe

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