The Secretaries of State for International Trade and Exiting the EU have both commented on a pivotal year ahead for UK trade. The senior Conservative ministers have said that in 2018 the UK must start to embrace the opportunities that the UK’s future independent position in international trade will bring.
A change in attitude is needed to embrace the opportunities ahead
Liam Fox – Secretary of State for International Trade, President of the Board of Trade, and MP for North Somerset – has said that Brexit shouldn’t be viewed as a ‘time bomb to be defused’ but instead as a ‘great opportunity to be embraced’ as the UK forges an ‘independent’ position in the international trade arena. He’s called for UK businesses to establish more of a voice and presence in international markets.
He wrote on the Conservative Party website:
“Our international competitors are already out there trying to carve out their slice of the world’s growing markets. We need to get beyond the obsession with criticising Brexit, lift our horizons, and be out there, too.”
He referred to increases in Foreign Direct Investment projects into the UK and in exports of goods and services from the UK as proof that demand for UK produce remains high. Exports of goods have increased by 15.9% and services by 11.6% to a combined £617bn in the year to October. This has seen the trade deficit in goods and services narrow by £10.7 billion.
Dr Fox said that work done by the Department for International Trade and the financial aid provided by organisations like UK Export Finance has been key to giving exporters greater access to international opportunities.
Negotiations on trade likely to make up much of this year’s discussions
Following the agreement secured by Theresa May regarding Phase 1 of the UK’s negotiations for leaving the EU, attention now turns to Phase 2 which will cover the UK’s future trading relationship with the EU and the nature of a transition deal between the end of the negotiations in 2019 and the UK’s actual departure.
David Davis, Secretary of State for Exiting the EU, has been reported as saying that these talks will be tough and will likely generate many headlines in the year ahead:
“The negotiations about the future will not be straightforward. They will generate the same public thunder and lightning that we have seen in the past year. But I believe they will be successful, because the future of the Europe continent is best served by strong and successful relationships.”
In what has been reported as a retort to EU chief negotiator Michael Barnier’s position that the UK cannot ‘cherry pick’ the benefits of the EU’s single market, Davis has claimed that the EU cannot access the UK market without factoring in key elements of the UK economy like the financial services industry.
He said:
"Our approach is simple: we are looking at the full sweep of economic cooperation that currently exists and determining how that can be maintained with the minimum additional barriers or friction, while returning control to the UK Parliament."
Looking beyond the EU
Whatever happens with the next phase of the negotiations, Dr Liam Fox has called on the UK to embrace its new independent status to form new trade relationships with markets around the world. Though the UK cannot formally open trade talks with non-EU countries until it has departed the EU, he has said that the Department for International Trade is already working tirelessly to start the process of spreading the UK’s wings.
He said:
“It is worth remembering that the EU does not have free trade agreements with the US, China, India or the Gulf states, and though we are not able to negotiate new trade agreements while we remain within the EU, we have established 14 trade working groups across 21 countries, to help us prepare for Brexit”
He also called for the UK to embrace the opportunities that taking up an independent seat at the World Trade Organisation (WTO) will bring, saying that the UK will now have a greater say on global issues in trade like gender, digitalisation, and ecommerce.
Embracing a key moment in international trade with the Institute
The Institute is already responding to the Secretary of State’s call for the UK to take more of an active role in international trade. In 2017 we hosted a plenary session on the benefits of ‘learning international trade’ at the WTO Public Forum and we will continue to forge new international relationships, through the WTO and the International Chambers of Commerce.
We see exporting as a fantastic pathway to growth for UK businesses and agree with Dr Fox that there are plenty of international opportunities – both within and beyond the EU – for UK companies to expand.
In 2018 we will continue to equip UK businesses with the skills needed to make the most of these opportunities for we firmly believe that exporting is only easy when you know how to do it. We will continue to provide qualifications and training to help UK businesses to attain the skills of international trade.
We also agree with Dr Fox that this a particularly key moment for UK businesses to look at opportunities overseas. He cited how global trade has been growing more steadily than global GDP for a number of years and notes how the IMF projects that 90% of world growth is likely to come from outside the EU in the coming years. 2018 will be a fascinating year for trade, both for the UK and the wider world.
Sources
- Liam Fox on the Conservative Home website: “In this new year, let’s resolve to capitalise on the huge trade and investment opportunities of Brexit”
- The Guardian (02/01/18): “David Davis says EU cannot 'cherrypick' terms of free trade deal"
