Local leaders must have a say in international trade talks

24 Apr 19

Our strategic authorities and city regions should be given a seat at the table of international trade for the sake of delivering place-prosperity, argues Localis’s Joe Fyans.


The importance of local economic anchors – those large, private-sector firms whose operations and supply chain provide the lifeblood of a place’s employment and commerce – is never so clear as when they leave.

Amy Goldstein’s fantastic Janesville: An American Story does a fine job in illuminating the various crevasses into which the shock of a firm upping sticks and leaving can flow, from observable gaps in skills to perceivable gaps in optimism. In the UK, some degree of this trauma was felt recently, when Honda announced it would be closing its Swindon plant, to the dismay of its 3,500 direct employees and a countless number of many other indirect beneficiaries of the anchor firm.

What Honda’s decision also brought home was the way in which the contours of global trade and the international business environment have hard and fast ramifications on the lives of individual communities. This is the weight of globalisation: that decisions made in one part of the world can be felt as if by missile-strike in another. It ought to make us think about the way we go about practising international trade relations.

There is no evidence whatsoever that the controversial attitude adopted by Jeremy Hunt and Liam Fox towards Japan had anything to do with Honda’s final decision. Nevertheless, one can’t help but wonder how different the talks would be, in structure and form, if local democratic representatives from Swindon had been on hand.

The remote high-handedness of Whitehall-led international diplomacy would perhaps have contrasted poorly with the very direct, boardroom-to-community connection between more local representatives and the Japanese delegation.

Researching our new report Prosperous Communities, Productive Places, Localis conducted a research interview with the regional head of Nissan in the North East. The conversation revealed the keen sense that these international companies, however far-flung they are, have of their role in community life wherever they operate. Commercial decisions affecting these communities are not taken lightly and local authorities are often kept well-informed of the prospects of their major anchor businesses. These good relations should be carried over on the international stage, rather than taking place solely at the local level.

For some places in England, there is cause to go a step further than becoming a pivotal part in international trade negotiations: becoming trading bodies themselves. Following the neo-localist school of ‘Metro Mayors’ proponent Bruce Katz, Greater Manchester and the West Midlands are looking at themselves as international economic units within their own right, identifying and developing their comparative advantages.

A strong understanding of the firms which anchor their communities is key to place prosperity, as it once was in the days when behemothic nationalised industries were a key plank of UK trade policy.  Then Herbert Morrison sought to refute the original European economic integration project with the phrase, ‘the Durham miners won’t wear it’.  

Now as then, localism and the astute leveraging of place dynamics, has a role to play in globalisation. This is because the skills on which advanced businesses and economies depend are embedded in networks of people who live in specific locations, rendering companies far more immobile than we’d think.

The trick for our strategic authorities will be to ensure the relevant skills and knowledge their labour forces possess are the right ones. Where skilled people are present, businesses will locate and cluster. And vice versa. Places all over the country are deeply connected to local economic anchors, yet in a global economy the fate of these community lodestones is often tied up in international deal-making. Local leaders deserve a seat at the table.

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