Today the UK Government is hosting the UK-Africa Investment Summit, which aims to promote the UK as a key investment partner for Africa and ‘create new lasting partnerships that will deliver more investment, jobs and growth.’ Researchers at IDS have been looking at the benefits and risks of foreign investment for businesses in Africa, the importance of investing in knowledge sharing as well as financial and technological investments and the vital role of South-South trade and investment.
Underlying the UK-Africa Investment Summit is the growth of South-South trade, the growing investment in Africa from China and India, and the opportunity Brexit provides the UK to negotiate new trade deals. This is a time for the UK to re-evaluate its trade and investment policies and IDS researchers Amrita Saha and Jodie Thorpe answer the question ‘What does a progressive trade policy look like?’.
What does a progressive trade policy look like?
The idea that international trade generates winners and losers is well-established – posing the more challenging question of what can we do about it? It raises significant political and social questions for trade policy at a time when the international trading system faces extreme uncertainties – with decades of imbalances, ongoing shifts and a surge in protectionist barriers. The vision of a truly progressive trade policy however does not imply restricting trade but stimulating trade with a core commitment to the following five principles of inclusion and sustainability.
1. Keep trade policy simple and robust, but recognise the need for flexibility. Accompanying development strategies should ensure that the gains from trade are shared fairly – in ways that protect and enhance livelihoods, create equal outcomes, account for labour standards, and do not violate climate commitments or food security.
2. Have inclusive domestic economic agenda that provides for accountability in trade negotiations, by establishing procedures for transparency and meaningful public participation. Such avenues can ensure meaningful ownership in trade agreements and recognition of where countervailing measures are needed to protect marginalised consumers, workers, or regions.
3. Have mechanisms to address widening inequalities such as those from digital trade by investing in capacities for knowledge transfer that enable sustained learning of new technologies and processes. Government support and development cooperation continue to play a role in meeting such gaps, especially in the Global South.
4. Enabling progressive outcomes cannot rely on trade policy alone. Rather trade policy needs to be better aligned with other aspects of the policy agenda, such as greater support to SMEs and entrepreneurs to be able to grasp new opportunities, including through improved access to finance, and targeted support for those who lose out, such as through appropriate social protection policies.
5. Finally, structured engagement and strengthening partnerships towards aligning trade policies with cooperation and collective action for a global sustainability plan as an imperative rather than an afterthought. At a time when global trade dependencies are shifting, alternative partnerships can play a complementary role in generating business-to-business exchange but go beyond business as usual in creating trade impact for good.