Credit: Original article can be found here
That’s one reason why there’s been relatively little coverage of a trade deal that was reached last month with Australia. So it was useful to be reminded this week in a speech in London by the former Australian prime minister Tony Abbott, now an adviser to our own Government on international trade, of just how advantageous a position the UK is now in, thanks to Brexit. We have the potential to lead the way as a global trading nation.
One of the much-trumpeted benefits of Brexit is that we are able to agree free trade deals across the world. As an EU member, all our trading arrangements were managed by Brussels. That meant that our long history as a maritime island which grew prosperous from global trade was consigned to oblivion.
We could, of course, still trade wherever we wanted. But we could no longer agree our own terms for that trade. Now, however, we are free of the shackles of Brussels and
can reach our own free trade agreements across the planet.
Trade is one of the wonders of economics. Crucially, both sides benefit from free trade, which makes it not only a brilliant mechanism for lifting nations out of poverty but the only reliable and sustainable mechanism for doing so.
And when wealthy nations trade, both benefit. That is why the agreement we reached last month with Australia for a free trade deal is so important. Not only is the deal itself a vital step on the journey towards a genuinely global outlook for our economy, it is also symbolic.
When trade talks with Australia were announced, many sneered. ‘It will take years.’ ‘It’s too complicated.’ ‘It’s small beer.’ All the naysayers were proved wrong and the final terms of a deal were agreed quickly and relatively easily when Boris Johnson met Australian PM Scott Morrison in Downing Street last month.
That is itself something to celebrate. But the real magic is that it opens up membership of a huge £9.7trillion trade agreement – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
CPTPP comprises Australia, Brunei Dar es Salaam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. It accounts for 13 percent of the world’s income. And it is a region with burgeoning economies and prosperity. The potential for trade is vast.
While we were in the EU, we could only look on jealously. Now, however, our application is well under way with negotiations expected to be agreed by the end of next year.
The US was one of the original members of the group but pulled out under Donald Trump. There is hope – indeed, expectation in some quarters – that Joe Biden will take the US back in. That would make it even bigger than the EU. And unlike the EU, it is a free trade bloc and no more. CPTPP does not want to become a state.
It is easy to be full of doom and gloom. The economic impact of Covid has been terrible. But all the omens are positive for a remarkable period of growth.
Earlier this week the IMF issued its latest global forecast, estimating that the UK will have the joint fastest growth rate this year of any G7 country, at 7 percent along with the US. That would mean a return to pre-virus levels by next year.
The more we trade, the wealthier we will be, the faster our economy will grow and – importantly – the faster our trading partners will grow.
Praise should go to Liz Truss, who has been securing the agreements that will be the foundation of our prosperity. It is an impressive list, and worth reading in full. We now have fully ratified agreements with Albania, Botswana, Canada, Cameroon, Chile, Costa Rica, Côte d’Ivoire, Ecuador, Egypt, El Salvador, Eswatini, Faroe Islands, Georgia, Guatemala, Honduras, Israel, Japan, Jordan, Kosovo, Lebanon, Lesotho, Liechtenstein, Mauritius, Mexico, Mozambique, Namibia, Nicaragua, the Palestinian Authority, Panama, Peru, Seychelles, Singapore, South Africa, South Korea, Switzerland, Tunisia, Ukraine and Zimbabwe.
And there are almost as many again which have been agreed but are still being ratified.
The possibilities are endless. We are already one of the world’s leading exporters of digital services. We now have the potential to become the global hub, a nimble, free trading centre of excellence that leads the world. All we have to do is seize it.