Global Britain's trade policy is silencing the doubters

Ministers have proven their ability to strike deals that could leave the EU in their wake

On a humid day in July 2016, Liam Fox entered the department to which he had just been appointed Secretary of State. There were none of the usual formalities – no officials lining the stairs to clap his arrival; no cameras to capture the moment; no carefully-prepared briefings. Dr Fox walked down the empty corridor to the Department for International Trade (DIT), a suite of rooms in a dank corner of the Foreign & Commonwealth Office. DIT’s staff were there to await him – an interim Permanent Secretary, a newly-minted Special Advisor and a Press Officer who had gamely volunteered for the job.

The unpromising start seemed apt for a department which many did not think made sense or had little chance of succeeding. Fusing together four organisations, there were few international precedents for uniting all a country’s trade functions – across trade policy, finance and promotion - into a single department of state. "I don’t quite see the argument for the Department for International Trade” the former head of UK Trade & Investment commented. Moreover, the department had a mandate to forge the UK’s independent trade policy, striking free trade deals around the world. “The UK has not negotiated an international trade deal in decades – we simply lack the capacity” a Brexit critic taunted. 

Fast forward some 50 months and DIT has confounded its critics. The department has reached trade agreements with 63 countries which, alongside the EU deal, cover £885 billion of UK trade. No other country has ever negotiated so many trade deals simultaneously. Trade negotiations are well underway with the US, Australia and New Zealand, and continuity deals with Canada, Mexico and Turkey will be deepened and enhanced. DIT has also painstakingly nailed down the planks of the UK’s independent trade policy, including implementing a new global tariff regime and setting up a trade remedies authority.

With the Brexit debate raging, the national conversation about trade has been a narrow one. For Brexiteers, trade deals are totemic, opening up exciting new economic opportunities. Remainers fear they will expose our institutions to competition and our consumers to inferior food. The British Foreign Policy Group shows how public attitudes to trade have been transformed. In February 2018, 50% of those who voted for Brexit in 2016 favoured limiting imports of foreign goods, to protect British producers. Two years later, it is Leave supporters who are most in favour of the Global Britain project, prioritising a view of the nation as a champion of free trade. 

As the Brexit mist dispels with the implementation EU trade deal, only now do we see the full utility of the UK’s new trade capability as a powerful agent for delivering the UK’s global and domestic ambitions. 

In a few weeks, Prime Minister Narendra Modi will host Boris Johnson at India’s Republic Day celebrations. Ahead of the visit, an Enhanced Trade Partnership between the two countries has been announced. The UK’s global tariff regime has reduced tariffs on Indian exports and the Indian Government has proposed an “early harvest” of reduced or eliminated duties to pave the way towards an eventual trade deal. There is a new dimension to British diplomacy and a thickening of its bilateral relationships is underway.

The big geopolitical play, the pivot point for Global Britain, is being pursued by Trade Secretary Liz Truss – to join the 11 Pacific nations that make up the Trans Pacific Partnership. UK officials have begun discussions with their counterparts, with Japan pledging enthusiastic support. With the UK’s inclusion, this block of fast-growing economies would make up 17% of global GDP, more than that of the EU 27, and place the UK at the centre of a new world trading order. Joe Biden’s Presidency raises the prospect of the US rejoining the Partnership, confirming the trade block as the largest and most lucrative in the world. 

Meanwhile, the UK will go further than the EU’s preferential tariffs scheme to help the world’s poorest countries. The UK can now pioneer the global gold standard in development policy, combining new trade agreements with support for poorer countries to build their own trade infrastructure and cut transport costs. Aid organisations have been quick to criticise the government for cutting development spending but somewhat slower to see how smart trade policy will provide far greater benefits.  

Closer to home, trade is fast becoming a tool to pursue the “levelling up” agenda. A new Office for Investment has recently been established to unlock international investment for big manufacturing and R&D projects across the country. A network of freeports – low-tax jurisdictions created to attract investment into deprived coastal areas – is being developed, with the first wave opening for business later this year.

In a short time, the UK has reclaimed and repurposed the policy that it had previously outsourced to Brussels. There are still bold and delicate choices to be made and, most critically, the need to maintain public support for a free trading future, but the UK has more than regained its tradecraft. Trade underpins the country’s strategic, diplomatic, development and economic objectives. Indeed, it has put Global Britain on rails. Few might have guessed it from such an inauspicious start.

This article was published in The Daily Telegraph on 4 January 2021