Global Trade Today covers the fact that a currently serving minister has spoken on the possibility of reversing Brexit and of the UK rejoining the EU for the first time, even going so far as to call it an “inevitability”, despite Labour’s ‘red lines’ in its 2024 manifesto.
In global affairs, a report has found that most of Chinese company’s gains in international markets have come as result of state subsidies, adding fuel to many arguments that Beijing’s policies are distorting the global economy and harming other nation’s domestic industries.
Labour minister on Brexit
Lord Spencer Livermore, a treasury minister, became the first sitting minister to talk about reversing the UK’s decision to leave the EU.
“Should we in due course re-enter the EU?” Livermore asked during a debate in the House of Lords.
“In my personal view that is an inevitability. Of course, the UK will re-enter the EU because it’s absolutely in our national economic interest.”
Lord Livermore is a financial secretary to the Treasury. Prior to being raised to the House of Lords, he was a long-term special adviser to former prime minister Gordon Brown and a political consultant. He was also a high-level figure in multiple successful elections, most recently as a strategist in the 2024 general election.
Although Livermore stressed that this was his “personal view”, rather than a government position, he becomes the latest Labour figure to argue for a return to the EU and for a reversing of Brexit.
Former health secretary and possible leadership candidate, Wes Streeting, recently called Brexit a “catastrophic mistake” while Greater Manchester Mayor Andy Burnham has said he wants the UK to rejoin the EU “in my lifetime”.
Chinese subsidies
A report from the Organisation for Economic Cooperation and Development (OECD) has found that 60% of Chinese companies’ market share gains over the last two decades have been aided by state subsidies.
“While subsidy levels have risen across most regions, firms in China continued to receive significantly higher support than their competitors elsewhere,” the report said in its introduction. The OECD’s research found that Chinese firms received, on average, three to eight times more support than firms in OECD nations.
Beijing has looked to gain dominance in sectors like renewable energy, semiconductors and heavy industry. However, its extra market share has not translated to higher productivity or profitability.
“Large and persistent industrial subsidies can distort global markets, creating unfair competitive advantages and contributing to excess supply capacity,” OECD secretary general Mathias Cormann said.
The organisation’s MAGIC database of industrial subsidies showed that state support for companies reached its highest level since the global financial crisis in 2007, with US$108bn worth of spending in 2024.
US-EU trade deal
MEPs in the European Parliament’s trade committee have endorsed a deal today to lower tariffs on US goods, marking another important step in approving the UK-US trade agreement.
The agreement was approved by 31 MEPs, with six voting against and three abstentions.
A final vote on the agreement by the full parliament is expected on 16 June. As it stands, the EU will remove tariffs on hundreds of US goods and accept a blanket 15% tariff on European exports to the US.
Tensions have been brewing over the deal for weeks. The three governing bodies of the EU delayed approving the agreement after a series of trilateral talks stalled, prompting a furious threat from US President Donald Trump to raise tariffs on European goods once again.
Last month, the European Parliament and European Council later reached a provisional agreement on implementing the trade deal, inserting a sunset and a suspension clause into the deal.
Other news
- Norway is reconsidering joining the EU, according to the country’s foreign minister Espen Barth Eide, saying there has been as shift from a “benign world” to a “crazy world” since Norwegians last voted in 1994 to reject joining the EU
- Bloomberg reported that Russian President Vladimir Putin has been warned by senior officials in his own government that Russia’s war in Ukraine is becoming unaffordable
- Denmark's Mette Frederiksen has returned as Danish prime minister after months of negotiations, following her Social Democratic Party’s victory in the March elections
Yesterday in trade
- Beijing warned Brussels that it would retaliate against any European attempts to impose new restrictions on Chinese products
- The May Purchasing Managers’ Index found that UK factories had had another strong month of growth
- Berlin rejected US claims that a new German streaming law could violate the US-EU trade deal
