A new Post-Brexit trade policy for Britain
"Britain has lost an empire and not yet found a role” – that famous quote has never been truer since the Brexit referendum consigned Britain’s EU membership to history. But can the UK turn its history as a trading nation and its soft cultural power into a new Post-Brexit global economic future – or will it retreat into an inward-looking Eurocentric comfort zone?
3 Mins (660 Words)
Britain now needs a profound rethink about its political and trading relationships not just with the EU but also with rest of the world.
Will Brexit mean the UK narrows its horizons and turns its back on the world? Perhaps, but we do have a choice about what kind of Brexit we end up with. We can either try to remain in our pre-Brexit European comfort zone, or reach out to forge new partnerships in rapidly growing market across Asia & Africa.
With its “Brexit” election pending on June 8th Britain’s trading relationship with the rest of the world should be a top election issue – but sadly it’s not. There’s been much talk about the EU but virtually no discussion on what the UK’s relationship with the world beyond Europe.
Britain needs to rediscover the trading spirit
Britons often forget that we are a global powerhouse. With the sixth biggest economy in the world, leading a Commonwealth of 52 nations and over 2 billion people; while 94 countries, almost half the world’s 195 nations, have English as an official language, with an estimated 1.5 billion English-speakers globally.
Britain needs to rediscover the trading spirit that made a few cold little islands in the North Sea a global power.
The creation of Department for International Trade was a good first step, but Britain hasn’t had its own trade negotiators for over 40 years and the new Ministry is woefully understaffed for the size of the job ahead. Despite the fact that the UK has relied on the EU to negotiate trade on its behalf, the EU actually has a terrible track record at negotiating deals beyond WTO talks.
Britons often forget that we are a global powerhouse
The EU has managed only two treaties with developed economies – South Korea and Canada, but has no deals with the likes of the US, Japan or China. Its new trade deal with Canada took seven years to complete and was almost derailed at the last minute by the veto of an obscure regional assembly in Belgium. While trade talks with India have been bogged down for a decade, actual trade with the sub-continent has fallen. And although the EU remains India’s largest trading partner, the UK has slipped below not only Germany, but also Switzerland. It now ranks at only No 18.
As a free agent the UK should be nimbler than the EU and better able to negotiate a series of trade deals with like-minded governments. Indeed, numerous countries are already vying to catch the UK’s eye. The danger is not a lack of interest overseas but a lack of ambition back home. Whoever forms the next Government, Britain needs to base its trading policy on four key priorities.
First, maintaining open borders with the EU through a comprehensive zero-tariff trade deal and agreement on EU and British migrant workers.
Secondly, negotiating bilateral trade pacts with non-European G8 economies such as the US, Japan and Australia which the EU has been so poor at.
Thirdly, forging new bilateral and regional agreements with the rising economic powers of BRICS countries and Latin America.
As a free agent the UK should be nimbler than the EU
Lastly, replacing the flawed and one-sided EPA’s that the EU has effectively imposed on developing countries through its Cotonou Agreement, with a fast-track non-reciprocal trade and development pact for developing Commonwealth nations.
Of course, none of these priorities are simple or easy to achieve. Those who pretend otherwise are fooling themselves. However, by dwelling on our fears, and sheltering in our comfort zone of past hopes the UK will risk missing out on new opportunities.
As ever Shakespeare said it best – in lines at the end of the Tempest – that Britain’s Whitehall mandarins would do well to take to heart a wide-eyed Miranda, as she leaves her hiding place and cries, “Oh brave new world that has such creatures in it”. To which Prospero, with a knowing smile turns to her and replies, “it is to thee”.