The Board of Trade (BoT) published its first quarterly report, titled “Global Britain, Local Jobs” last week (10 March), which it described as an “unabashed case for free and fair trade”. It outlines the areas that the UK can harness to achieve its objectives (digital trade, services and the transition to a greener economy) and confirms the trend that Government is pursuing trade as a catch all to deliver a range of its priorities, from domestic levelling up to projecting the UK’s new foreign policy role on the global stage.
The Board was reconstituted in 2017 after the UK left the EU, with International Trade Secretary Liz Truss serving as its President. The Board’s advisers include former Australian Prime Minster Tony Abbott, former Health Secretary Patricia Hewitt, the Lord Mayor of London and former MEP (now Lord) Daniel Hannan.
The report made five main assertions:
- Free and fair trade helps raise global prosperity
- Trade-led jobs are vital to the UK economy
- Trade-led jobs are better paid and more productive
- Trade benefits consumers, especially those on low incomes
- The UK has an opportunity to tap into the fastest-growing markets and sectors of the future
The report states that 6.5 million jobs in the UK are supported by exports (that’s 23% of all jobs), and the value of exports in 2019 made up a third of the UK’s GDP. Another key stat deployed was that goods-exporting businesses are a fifth more productive on average than those who do not export. The productivity puzzle has long plagued the Government but in recent years it’s been somewhat eclipsed by the more tangible issues of the day.
The report urges the Government to go “further and faster to bring the benefits of free and fair trade from every corner of the world to every region of the UK”. Its recommendations are threefold:
- The UK should promote an export-led recovery
- The UK should continue to strike new trade deals to benefit its citizens
- The UK should lead the charge for a more modern, fair and green World Trade Organization (WTO)
One of the core elements of these recommendations is encouraging UK businesses to export, and the report outlined that in order for the Government to achieve its Global Britain vision and level up the economy, “we will need to champion the case for free trade at home and abroad”. Domestically, there is a role for the UK Government to play in selling its trade policy and the ongoing free trade negotiations to the whole of the UK – politically, regionally, and publicly – so expect an increase in rhetoric and activity from the Department for International Trade (DIT) to reflect this.
On the international front, the report cites New Zealand, Singapore, and Australia as successful case studies of economies that have opened up trade. It is no coincidence that these three countries are featured. All three are members of the trading relationship the UK is seeking to become a member of – the CPTPP – and the former and latter are countries with which the UK is currently in free trade negotiations. The report also pointed to fast growing economies such as India, the Gulf nations and Mercosur countries in Latin America as those where the UK should be focussing its FTA negotiation efforts.
As part of this, the report also stresses that the UK’s trade policy must fit within its wider foreign affairs agenda; reforming the WTO, the UK’s international development programme, responding to COVID-19, and geopolitical drivers (demonstrated by the dichotomy about the UK’s approach to China) to name just a few. In an op-ed for the Daily Express, International Trade Secretary Liz Truss summed it up: as “we are using our independent trade policy to grow our slice of the global pie… Together with our like-minded allies, we are building back a better, fairer and greener trading environment fit for the 21st century.”
By tying trade to all of the Government’s key priorities – COVID-19 recovery, sovereignty, Global Britain, sustainability, jobs for the future, levelling up, poverty reduction and economic growth – the report’s recommendations are likely to be adopted by government.
There have been many hints that project Global Britain has been kicking into gear but this report, armed with arguments to deploy championing free trade, indicates the UK Government’s foot is firmly on the Global Britain accelerator.