The Week in Trade: Passing the Patt test

Fri 18 Aug 2023
Posted by: Danielle Keen

Newspaper with coffee

To the extent that they think about trade at all, the UK publics thinking on the subject remains framed by the post-Brexit debate. Before 2016, it hardly registered as an issue at all for those outside the business of importing and exporting. But today, the public seems to know its CPTPP from its GCC.

The big picture: Two bits of government-sponsored research this week suggest the public is more engaged in the trade debate than ever before. First, there was research to suggest the results of Brexit continue to disappoint all but a few hardened loyalists. Then, there was the latest wave of Public Attitudes to Trade Tracker (PATT), which suggest that one of its major benefits – the ability to negotiate trade deals with non-EU countries and trade blocs – is more appreciated than it has been before. The rational view must be somewhere in the middle. Brexit is hurting now, but future trade deals may help alleviate some of that pain.

Good week/bad week: Japan surprised economists by posting growth of 6% in Q2 – forecasters had been tentatively predicting just a 3% rise in GDP. The increase follows a weak yen boosting exports. 

But the week took a bad turn for Swiss exporters, as a derailed freight train in the Gotthard Tunnel severely damaged tracks. Repairs to the tunnel, which cuts through the Alps between Esrtfield and Bodio, are expected to take several months, creating delays of over an hour.

Perhaps a silver lining can be found in the possibility of a reopening event as sublimely strange as the 2016 party that celebrated the tunnel’s completion.   

How’s stat? The ONS released a curious mix of stats this week, undoubtedly setting pulses racing at the Bank of England with news that wages grew 7.8%, before deflating any inflationary fears by announcing prices were only rising by 6.8% – a fall from the 7.9% recorded in June. 

Whether rising wages will ignite another inflationary spike remains unclear. But with interest rates expected to rise once more, many experts are still predicting a UK recession next year.

The week in customs: Get ready for more photos of snaking Dover border queues. The Telegraph reported that the EU’s new Entry/Exit System (ESS) could double wait times for border checks. Set for implementation next year, the EES will require travellers to provide fingerprints and photographs, data that will need to be re-recorded every three years.

Quote of the week: “International trade is a ‘force for good’ and trade agreements stimulate economic growth throughout the UK, creating jobs, lowering prices for consumers, and promoting innovation and technological advancement.”

Marco Forgione, IOE&IT director general, commenting on the latest wave of PATT.

Major milestone: Biden’s US Inflation Reduction Act (IRA) turned one this week. Commentators noted that the act’s effectiveness at reducing inflation was significantly overshadowed by its capacity to stimulate the green economy, as reported by Reuters.

The president appears to have followed suit, using the anniversary to announce new clean energy legislation giving away billions in tax credits to encourage businesses to go green and consumers to buy electric vehicles.

What else we covered this week: We looked at the best places to do business worldwide, reviewing the Economist Intelligence Unit’s (UIE) Business Environment Rankings (BER).

Content editor Phil Adnett took us on a whistle-stop tour of Latin America, rounding up regional news from Argentina’s surprising primary election results to fresh attempts to limit Amazon deforestation. He also explored the environmental credentials of lithium.

Keeping it LatAm, our esteemed colleague Matt Vicks cast his expert eye over the droughts affecting the Panama Canal, outlining consequences for traders.

True facts: The FT explored the future of the world’s favourite beverage: coffee, replete with beautiful visuals illustrating metrics from across the supply chain. Did you know we collectively drink 3 billion cups of coffee a day, a figure set to double to 6 billion by 2050?