Credit: Original article can be found here
Liz Truss will call for Britain’s trade officials to “move from defence to offence” as her department launches a new report that shows global demand for high-end services – in which Britain is a global leader – will double in the coming decade.
The international trade secretary will say the path to economic revival is not in “retreating and retrenching”, but through free trade.
During a speech at the Policy Exchange think tank, Ms Truss is expected to say: “We know the demand for high-quality British goods and services exists, and is growing, therefore we need to ready British businesses for export and bolster inward investment across the country.”
Ms Truss’ comments come as the Department for International Trade releases a new report, the Global Trade Outlook, which says Britain will be able to boost its exports substantially over the next three decades if it can tap into an expanding global middle class and rapidly-growing Asian markets.
“UK exporters are well-placed to capitalise on the growth of the global middle class as richer populations tend to buy more of the high-value goods and services that UK businesses specialise in,” the report says.
It identified several sectors where British companies have a comparative advantage, including financial and business services, aerospace, media and sciences.
Officials said the UK is in a “pretty favourable existing position and has been very competitive in a lot of these industries for long periods”.
However, they warned Britain may have to battle to maintain its lead in some of these sectors, particularly as more rivals emerge in other countries.
“It’s not a question of resting on your laurels, you’d have to continue to innovate, and keep up with the pace of changing technology, regulation, and so on,” one of the officials said.
Rapid economic expansion elsewhere means Britain will end up with a smaller slice of a larger trade pie, the report said. DIT projects the UK’s share of exports will fall over the coming decades, dropping from 3.6pc in 2019 to 2.5pc by 2050.
The report projects a gradual decline in the economic might of the G7 – Canada, France, Germany, Italy, Japan, the UK and the US – as the global centre of power shifts.
Within three decades, the G7 will represent just a third of GDP according to the IMF and DIT calculations, while the so-called E7 of top emerging markets – Brazil, China, India, Indonesia, Mexico, Russia and Turkey – will represent 41pc.
A big chunk of this expansion will come from China, which is projected to overtake the US as the world’s largest economy by the end of this decade.
In her speech, Ms Truss will call for exporting to become the “norm” for British businesses, just one in 10 of which currently sell products overseas.
Britain has not finalised any new trade deals since leaving the European Union, despite having rolled over many pre-existing agreements.
A free trade deal with Australia is expected to be announced around the time of the COP26 climate summit, which starts at the end of October, and negotiators are still trying to wrap up a preliminary agreement with New Zealand after missing a provisional deadline at the end of August.
Labour revealed its own “workers first” trade strategy at the weekend. Shadow international trade secretary Emily Thornberry accused the Government of having “rushed around looking for the quickest new deals they can sign, no questions asked”.
Ms Thornberry said the Conservative’s approach to deals could create friction with the US, which has signalled it wants to make labour rights a key part of any new deals.
She added the Government “appears not to realise that their deliberate dismissal of workers’ interests and rights in relation to trade puts them firmly at odds with the only country that can realistically help them reach their manifesto commitment to cover 80pc of the UK’s trade with free trade agreements by the end of 2022.”