By Emma Rowland, Media and Policy Intern
Britain’s venture away from the continent has proved to be a messy divorce. But the agonising years of negotiation have finally resulted in both parties sharing custody of the children, in the form of a long-awaited Free Trade Agreement (FTA). Meanwhile, the UK has been spreading its tentacles across the globe, furthering its bold ambitions on the competitive global stage.
The UK has secured FTAs with important partners like Japan, Switzerland and Canada, and is currently negotiating a deal with India worth £1 billion. The cherry on top would of course see the United States added to that list, but for now we can enjoy a return to international collaboration and renewed optimism at the year ahead.
Most significantly, on the 29th April, the European Parliament voted to ratify the UK-EU Trade Deal agreed in December by a vote of 660 in favour, 5 against, and 32 abstentions. Businesses juggling the dual challenge of the Brexit transition period and the coronavirus pandemic can breathe a sigh of relief at the prospect of a return to stability.
The government claims this deal will allow the UK to “regain control of our laws, borders, money, trade, and fisheries”, and has been “carefully judged to benefit everyone”, with the core aim being to restore sovereignty. Key elements of our new relationship include the use of customs declarations, new restrictions to the free movement of people across the border, and greater British control of fishing in its own waters.
Our partnership a few thousand miles East with India promises prosperity in an exponential capacity: the billion pound agreement will hope to double by 2030. In the meantime, the deal will create over 6,500 jobs; provide over £533 million of new Indian investment in vital sectors like health and technology; contribute £200 million to supporting low carbon growth, and significantly cut tariffs in the whisky, automotive, and financial services sectors.
However, the Prime Minister is still spinning plates. Talks with Australia have revealed the tightrope-esque balancing act the government is navigating. Achieving prosperous trade deals is the priority in rejuvenating our position in the global arena. But so is protecting British industry, keeping our promise to reach Net Zero by 2030, and maintaining our reputation as strong negotiators without appearing desperate.
The biggest controversy lies with the farming industry. Agreeing to tariff-free imports on Australian farm goods is risky in a few respects. Firstly, the UK farming industry would have to compete with Australia’s vast industrialised farms, which threatens particularly Welsh and Scottish farmers, important providers of British produce. This could spark anti-unionist sentiment in the devolved nations. Secondly, it would set a precedent for future trade deals with huge beef producers Brazil and the USA, which would further dent local agriculture. Finally, huge shipments of meat coming from the other side of the world very much undermines the UK’s responsibility as a leader in the race to Net Zero.
It’s not all bad news from Australia though. The wine industry would flourish, providing the UK with cheaper and better quality wine, while filling the gap created by Chinese tariffs for Australia. Cheers to that!
Overall, directors can be encouraged by the revival of long term policy that has begun to replace crisis management. Trade agreements create jobs, investment, and cross-border cooperation, and the more agreements ratified, the more attractive the UK is as a trading partner.
Summary Explainer of the UK-EU FTA:
[Withdrawn] Summary Explainer - GOV.UK (www.gov.uk)
A Trade Policy Roadmap – Sweden, EU, and the UK:
UK Trade Agreements with Non-EU Countries:
UK trade agreements with non-EU countries - GOV.UK (www.gov.uk)
IoD Brexit Hub:
Navigating Brexit for Business | IoD