A lot has changed for businesses due to the UK’s departure from the EU. But has Brexit changed how the UK is perceived internationally as a trading nation?
One of the main benefits of Brexit was meant to be that the UK would be able to have an independent voice on trade issues globally. However, critics claim the country has instead lost leverage and influence outside of the EU, which is the largest economy in the world when considered as a single bloc.
The UK’s post-Brexit standing in global trade is a one of the key topics of discussion at next week’s inaugural Import Export Show – a new landmark event for the UK trade industry being hosted by the Institute of Export & International Trade (IOE&IT).
Ahead of the event, we spoke to two of the speakers at the event to get their view on what influence the UK now has on global trade.
Does influence on global trade policy issues even matter?
David Henig, director of the UK trade Policy Project at the European Centre for International Political Economy (ECIPE), is one of the UK’s leading authorities on international trade policy and says he spends a lot of time “trying to make sense of the UK’s place in the world”, making him an ideal panellist for the show.
He says that while the UK is a “reasonably large market” there isn’t a particularly “special perception” of the country overseas and that it is not “really a part of a lot of the big changes” that are happening at a global level.
He says the UK has been “too distracted” by its own issues to have had a meaningful voice on trade policy issues and has instead mostly focussed on securing free trade agreements (FTAs) since Brexit. And he notes that the international community is generally moving away from bilateral FTAs, particularly the US.
He points to CPTPP – the 11-nation Pacific group the UK this year secured an agreement to join – and says this might have positive implications for imports, in that the UK could pivot to getting supplies from south-east Asia rather than China. But he also notes that, when it comes to exports, the UK already agreements in place with most of the CPTPP nations. He concludes that agreements like CPTPP aren’t “game-changers” but can lead to “incremental positive” impacts.
Overall, Henig argues that the UK being a “navigator of changing currents”, rather than a leader on trade policy issues, isn’t necessarily a bad thing.
“It’s important to ask what the UK is actually prioritising, though. Are trying to be a big voice internationally and does this give you any benefit? I’m not so sure it does.
“The UK is the world’s second largest services exporter, but does that require us to be a leader in anything when it comes to trade policy? Do we need to do anything in a sector like higher education, where there’s a huge growth in exports? Not really.
“Take AI as another example. Will it make money for UK businesses if the UK is a leader on this in terms of policy? I don’t see gains to be had from having a leadership position on this. I instead see gains from making sure we’re aligned well with the markets that we sell to.”
In regard to next year’s probable general election in the UK next year, he can’t foresee it as being a “turning point” when it comes to the country’s trade policy agenda, but can see both major political parties pursuing closer relationships with the EU, though he notes this might happen “slightly quicker” if Labour wins.
Regarding international elections next year, he can’t foresee the polls in India or the EU having a significant impact, but notes that a Trump win in the US could be significant due to his “complex and chaotic” style, but notes that it’s unlikely that any candidate will reverse the “US’ tilt into protectionism.”
However, despite any possible further disruptions in the political or economic environments next year, he says that trade has proven to be remarkably resilient to shocks over the last few years.
“No matter the politics, trade carries on. Traders carried on through Brexit and are carrying on through politicians trying to impose various restrictions.
“The state of global trade is much healthier than is commonly thought, and that includes the state of UK trade. It’s withstood quite a lot of shocks.
“While it’s not delivering the domestic growth we may have hoped for, it’s premature to say that global trade or the UK’s position in global trade is coming to an end.”
Taking a lead in digitalisation of trade infrastructure
Abhishek Sharma, senior director for transport at Trade Mark Africa, notes that, in Africa, the perspective of the UK has not particularly changed.
From his work supporting governments in Africa to prepare and finance key transport and logistics facilities that boost African trade, he notes that the UK is the “country that provides the biggest foreign direct investments in Africa”.
He says that the continent’s historical and cultural ties with the UK – 27 African countries have English as their official language – makes the UK a key trading partner too. Although there were concerns about the impact Brexit, the UK secured several continuity agreements with African countries, meaning trade ties have stayed “as strong as ever”, he says.
Since Brexit, the UK has hosted the first UK-Africa Trade Summit, with a follow-up scheduled for 2024, and he praises this initiative as being the “first to bring together African countries and British investors”, with areas such as clean energy, digital transformation and education at the fore.
“There is a strong recognition of UK’s expertise in these areas within Africa, and there is almost always a positive outlook towards the UK,” he says, adding that the Foreign Commonwealth and Development Office has been a “great flag bearer for the UK”.
The UK’s digital expertise is particularly valued, he says, noting the partnership between TradeMark Africa and IOE&IT to deliver the Trade Logistics Information Pipeline (TLIP) – a technology solution that facilitates the establishment of ‘digital trade corridors’ between countries, including the UK and Kenya. These corridors streamline and improve the efficiency of exchanges of customs and trade information related to cross border goods movements and have a “massive potential” to make international trade easier for businesses.
He adds that the UK has also played a key role in supporting the creation of M-PESA – a mobile money transfer service that is being used in multiple African countries – and also hails the role of British International Investment in facilitating easier access to trade finance to African banks, making it easier for SMEs to access support to trade.
However, he notes that to maintain its prominence in Africa, the UK needs to maintain and grow its investments into the continent.
“The UK is recognised as a strong partner and you need to keep on building on this to maintain pole position, but investments have been flatlining a little from the UK into Africa of later. This needs to change.”
IOE&IT view
Henig and Sharma – who are both speaking on the panel titled, ‘The UK’s place in a changing trade world’ – will certainly give different perspectives at next week’s Import Export Show, where they will be joined by Sam Lowe, a partner at Flint Global, and Professor Clair Gammage, head of the law school at Exeter University.
The IOE&IT’s new head of trade policy Hemita Bhatti, says she is excited to hear from the panel in what is sure to be a fascinating discussion.
“The UK's exit from the EU has reshaped its global position amidst a changing and more fractured geopolitical landscape. This has prompted a rise in trade barriers and inward-looking trade policies worldwide, casting doubt on the efficacy of the multilateral system and the relevance of UK leadership within it.
“It has also opened opportunities for the UK to influence global trade through regulatory diplomacy and trade facilitation. This could help raise standards amongst developing markets, create interoperability and reduce trade barriers for businesses. The UK could help shape global trade policy that incorporates digitalisation and sustainability and demonstrate that trade can be a force for good.
“This discussion is relevant and timely in exploring how the UK should position itself globally and the impact this could have on businesses engaged in international trade.”
How to sign up to attend
There is still time to buy tickets for the Import Export Show, which is due to take place on Wednesday 15 November at Leonardo Royal, London City Hotel, London.
Sales for tickets close on Friday 10 November.
For more information about how to sign up, visit: https://www.importexportshow.co.uk/