Trade secretary Kemi Badenoch has stressed growth at a speech in London – see https://www.gov.uk/government/speeches/trade-secretary-my-top-five-priorities-for-trade. The Department for Trade “is the government’s flagship economic growth department … everything DIT does is about creating economic growth,” she said.
Badenoch set out her own five priorities – three weeks after prime minister has set out his five priorities, the second of which was growing the economy. She said that they are to:
- Remove trade barriers standing in the way UK businesses selling more.
- Grow UK exports every year “until we hit our Race to a Trillion – selling over a trillion pounds of goods and services to the world a year by 2030”. Firms will be pushed to export.
- Establish the UK as the undisputed top investment destination in Europe.
- Agree “high quality deals” with India and CPTPP (the Comprehensive and Progressive Trans-Pacific Partnership). Badenoch has previously highlighted accession to CPTPP as a priority. Coventry-based driverless car manufacturer, Aurrigo, could benefit on its exports to huge markets in Vietnam and Japan, she said.
- Defend free trade and “make the world more secure by strengthening supply chains and standing up to protectionism”.
Jack Semple, Secretary of EAMA comments that Badenoch is a rising star in the Conservative Party who did well in the leadership race last summer. Her alignment with growth will strengthen her credentials.
Her emphasis reflects the government’s pivot towards the Indo-Pacific, which she strongly supports. She made no reference to Europe or the EU, relations with which are outside the DIT’s remit.
She has inherited the “Race to a Trillion” by 2030 which originates from the Export Strategy 2021. EAMA has said that the revised strategy represented a reduced export ambition, which has previously been to growth exports to 35% of GDP from 30%, and that DIT’s interests had narrowed to a few preferred, specific sectors. DIT closed down several sector trams, including one for advanced manufacturing.
Support for SME exporters has diminished, with a running down of the revised Tradeshow Programme and the ending, in March, of the Internationalisation Fund. It is unclear what, if anything, will replace these initiatives. More positively, the Export Academy is being developed. Badenoch is known to be reviewing how DIT support exports but may have budget constraints.
The UK’s claim to be a top inward investment destination is controversial. It does not differentiate between money invested in, for example, expanding and improving UK firms from money spent buying UK businesses. DIT has shown little interest in broader supply chain issues – an area that falls under BEIS.
The priority to join CPTPP is widely seen as part of a broader, geo-political position. Its significance in trade terms is disputed – the UK has trade deals with several CPTPP members and is in negotiations with others, including Canada. There have been suggestions that the UK will have to move its current position significantly to be allowed to join CPTPP. In terms of India, there would be winners and perhaps losers. The Scotch whisky industry would benefit from a reduction in tariffs, much of UK industry is concerned about issues such as intellectual property and possible threats to the UK supply chain.
Highlighting this controversy, former DEFRA Secretary of State George Eustace has warned of risks in joining CPTPP. “Countries could get together to force us to change some of our regulations, he told the Commons – see the report in the Daily Express at https://www.express.co.uk/news/politics/1723539/Brexit-news-George-Eustice-Rishi-Sunak-trade-deals-CPTPP.
“In some of these agreements, we have to be careful we don’t lose the sovereignty we fought so hard for. We haven’t gone through years of argument only to find that some international court or Canada and Australia getting together can force us to change some of our regulations on food standards.
CPTPP risked that “large Canadian investors in British water companies, for example, might object to regulations we introduce to improve British water quality… There is a risk that Canada, say, might bring proceedings against us saying we have to decrease our food standards.
He added: “The public who voted to take back control would be horrified to find that we haven’t taken back to control and are instead giving control to other jurisdictions and letting them boss us about.”
We would welcome feedback from members on these and other trade issues. If you have any comments, please send them to Jack Semple at EAMA (email: [email protected]) and copy to Geoff Noon at MTA (email: [email protected]).