The Week in Trade: UK industrial strategy spotlighted, China faces overcapacity queries and critical imports considered

Fri 19 Apr 2024
Posted by: Benjamin Roche

A week of debate over China’s industrial overcapacity also featured a deep-dive into UK industrial strategy at a Business and Trade Committee meeting, while Iran faced new sanctions from the US and the government launched a new Critical Imports Council, featuring experts from the Institute of Export & International Trade (IOE&IT).

The big picture: An evidence session of the Business and Trade Committee attended this week by IOE&IT turned the focus to UK industrial strategy, with speakers including Airbus UK senior vice president Oriel Petry, High Value Manufacturing Catapult chief executive Katherine Bennett and Dr Richard Torbett of the Association of the British Pharmaceutical Industry (ABPI).

Bennett argued that UK industrial strategy should focus on wind energy, which she said offers a particularly big opportunity for UK manufacturing. She added that current strategy should adapt to recent innovations, particularly AI.

Queried on a decline in UK manufacturing exports, Torbett suggested that sluggish domestic commercial activity was having a knock-on effect on exports. He also made the case that, in the area of medicines, there was a need for more work on international supply chains as the UK is not capable of manufacturing everything it needs in the sector.

Petry’s contribution, drawing on her experience with Airbus, set out how industrial strategy needs are reflected in two challenges faced by the firm: a backlog of orders and a need to build a new generation of sustainable aircraft to help meet 2050 net zero targets.

“Those challenges require, in our view, a really strong industrial strategy. For us, an industrial strategy is aimed at driving UK competitiveness.

“We are in a globally competitive position. The UK is world-class in aviation, but to stay world-class, the partnership between business and government is critical.”

Good week: A good week for the Brazilian pork industry, as the US Department of Agriculture (USDA) predicted a rise on global exports of pork, with Brazilian producers benefitting from low costs, according to Pig World.

Bad week: Iran is facing additional sanctions on top of current measures applied by Western nations, as US president Joe Biden is under increased domestic pressure to ratchet up his country’s programme.

The week in customs: The FT has reported that the government is considering a delay to the implementation of some provisions of the next phase of the Border Target Operating Model (BTOM). It is said to be in response to fears of delays as physical inspections could lead to queues at ports.

A Defra presentation seen by the FT warned of the “potential for significant disruption on day one if all commodity codes are turned on at once”. The department is therefore said to be considering a “phased implementation approach”.

How’s stat: £1.8bn – the amount earmarked by the Labour Party yesterday for new investment in the UK’s ports, should it win power in the next election. It is one component in the party’s proposed ‘Green Prosperity Plan’ government investment programme.

Quote of the week: “It is crucial that we ensure a steady and stable flow of these goods, and IOE&IT stands ready to help government understand the needs of importers of critical minerals and how best to protect the UK’s supply chains.”

IOE&IT director general Marco Forgione on the launch of the government’s new Critical Imports Council, which includes IOE&IT representation.

What else we covered this week: The UK and US announced that new Russian aluminium, copper and nickel would be banned from the London Metal Exchange and Chicago Mercantile Exchange. UK chancellor Jeremy Hunt said the action “will prevent the Kremlin funnelling more cash into its war machine”.

China featured heavily in this week’s news, as German chancellor Olaf Scholz travelled to Beijing to discuss the country’s alleged overproduction of goods, with concerns raised that it is undercutting international competitors. Xi Jinping hit back to say that China had “enriched global supply and alleviated inflationary pressure”.

The Daily Update also took a member-exclusive look at how a shortage of sailors is hitting shipping firms as well as how an election in the Solomon Islands reflects on China’s role in the Pacific.

True facts: Tomorrow is National Record Store Day in the UK. UK exports of music were worth £2.9bn in 2019, while PRS for Music said last year that music exports added £4bn to the UK economy.