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Truss underlines break from EU past

International trade secretary Liz Truss has re-inforced the UK’s focus on Indo-Pacific region.

In a keynote speech in London, she said that the UK needs “to move from defence to offence in trade”.  After nearly 50 years in the protectionist EU, the UK had lost the trade muscle memory that had been built as a sovereign nation, she said.

UK trade strategy is grounded in the growth of the middle-class in Asia and digital trade becoming the dominant form of trade, she said.  The UK can be a “tech trade superpower”.

Truss said that it is time to dump the baggage of previous debates and look to the future.  Naysayers have thinly-veiled vested interests to protect.  They want to status quo rather than a dynamic future, she said.

She rejected calls for autarky – a self-sufficient economy producing “everything from gloves to microchips… cutting ourselves off from trade would be hugely damaging”.  The best way forward is free trade and free enterprise – a view now supported by 70% of the population, she said.

In a brief passage, she added that “industries like steel and shipbuilding were let down by successive governments which led to job losses and deindustrialisation, a situation that we are now turning around”.  [This comment may be related to the start of London International Shipping Week, form which The Times reported that “the ship and boatbuilding industry is demanding that the prime minister keep his promises to the sector to ensure that the next generation of border patrol and coastguard emergency vessels are built in British yards… Shipyards are calling on Boris Johnson to make good his commitment to ‘bring shipbuilding back home’ and to introduce a loan guarantee scheme to attract financial backing and prevent orders for key vessels going to foreign rivals”.]

Truss was launching the Department for International Trade’s new Global Trade Outlook.  It asserts two trends, which inform policy:

1) The centre of global economic gravity is moving away from Europe and towards East Asia and the Indo-Pacific:

  • By 2030, three of the four largest economies in the world will be in the Indo-Pacific region.
  • The Indo-Pacific region will account for 56% of global GDP growth and 44% of global import demand growth over the next thirty years.
  • That region will account for just under 60% of the world’s middle-class by 2050 – amounting to around 2 billion high income consumers.

2) Global demand for industries where Britain prospers is set to boom:

  • A rising middle class and changing consumer preferences will boost global demand in sectors of UK comparative advantage, with demand in UK sectors of strength set to almost double in dollar terms over the next decade, in a global market which would be worth over £10 trillion by 2030.
  • Services trade, in particular, is set to grow over the next decade, with sectors of UK strength – such as financial services, creative industries and digital services – among the fastest growing sectors.
  • UK digital services alone expected to grow by 117% over this decade.