New LSE commission to interrogate foreign economic policy decisions

At this important point in Britain’s foreign policy history, a new LSE Economic Diplomacy Commission has been set up by LSE IDEAS, LSE’s foreign policy think tank, to help shape foreign economic policy decisions made by the British government.

Britain’s planned departure from the EU will see it establish trade and associated foreign investment policies, as well as negotiate its own free trade agreements (FTAs), for the first time in over four decades.

The Commission, which comprises some of the UK’s leading economists and foreign policy practitioners, will engage with a wide range of experts, policymakers and business figures over the next 18-24 months to formulate the principles that should underpin Britain’s future trade and investment policies.

Chair of the LSE Economic Diplomacy Commission, Professor Linda Yueh sets out the key foreign policy considerations for the government in a new LSE IDEAS Strategic Update, Refining Britain’s Economic Diplomacy.

Economic diplomacy considerations highlighted in the report include:

• Which principles should govern international trade and investment policies? For instance, will the government pursue free trade agreements in services that could open up aspects of the National Health Service?
• Which economies should be the priority for trade agreements? Should the government prioritise deals with major economies such as the US and China or smaller countries? What combination of trade agreements with advanced economies versus emerging economies would be optimal both practically and strategically for Britain?
• Should the UK seek to influence international rules in other areas such as investment policy and trade in services? The UK has the highest services trade to GDP ratio among advanced economies. As a significant services trader, should it take up the mantle and aim to set international rules in areas such as services and investment policy?
• What about digital trade? With Britain among the top ten digital economies in the world, should digital trade be a priority for policymakers?
• How should new trade and investment policies fit with Britain’s broader foreign policy aims? Should aid be used to support Britain’s trade aims? What about trading with countries with poor human rights records?
• What is the link between the UK’s foreign policy and the impact this has on British society? How will the government manage any backlash against globalisation? How should policymakers help those who have been left behind and address issues of redistribution across the country?
• How can Britain promote its values, such as democracy and the rule of law, alongside its other interests on the world stage? Could the UK play a leading role in crafting universal standards around technology and digital trade or services?

Commenting, Chair of the LSE Diplomacy Commission, Professor Linda Yueh said: "This Commission is timely. Given the vast changes in the global economy of the 21st century and the challenges surrounding globalisation, how should the UK position itself in the world? The answer will be important not only for widespread economic prosperity but also to help ensure that the values of British society are promoted."

Michael Cox, LSE IDEAS Director added: "Getting the past right is difficult enough: getting the future right nigh impossible. But now more than ever, thinking about Britain's future place within a fast changing world economy is vital.

"In order to help us think creatively in these unsettling times, LSE IDEAS has established its own Economic Diplomacy Commission bringing together experts from the academic world, policy makers and leading figures from the private sector to ask the big questions and hopefully come up with answers that will address the issues thrown up by our challenging environment."