Britain’s government is poised to miss its target to seal deals covering 80 per cent of its trade with the rest of the world by the end of 2022.
The promise — set out in the Conservative manifesto ahead of the 2019 general election — reflected ambitions that post-Brexit Britain would be free to strike trade agreements all over the world.
But instead the UK has so far only made deals covering just over 60 per cent of its global trade, according to government officials.
For the previous four decades the UK did not have any bilateral trade deals because as an EU member state its trade was conducted through Brussels.
Since it has left the EU, London has managed to roll over 71 deals that it had through its membership of the bloc. It has signed only four new trade agreements: with Australia, New Zealand, Japan and Singapore.
George Eustice, the former environment secretary, said last month that the deal with Canberra “gave away far too much for far too little in return”, reflecting criticism that the agreement was particularly advantageous for Australia’s farming industry. According to the government’s own estimate the deal would increase UK GDP by just 0.08 per cent by 2035.
Meanwhile, attempts to strike ambitious new trade deals with the US and India have stalled.
Negotiations with Washington began in May 2020 but are deadlocked over a number of issues, including the UK-EU dispute over the Northern Ireland Protocol, which governs post-Brexit trade arrangements in the region. The US fears Britain’s attempt to revisit the protocol could undermine the Good Friday peace agreement and some Democratic members of Congress have threatened to block any trade agreement with London unless it resolves the impasse with Brussels.
Discussions with the Indian government formally began in January but the government failed to complete the negotiations by October as originally intended. Suella Braverman, the home secretary, has expressed “reservations” that the UK could concede too much on immigration from India.
The UK is also engaged in negotiations to upgrade existing trade deals with Canada, Mexico, Switzerland, South Korea and Israel, and is trying to strike an agreement with the six states of the Gulf Co-Operation Council as well as joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Nick Thomas-Symonds, Labour’s shadow trade secretary, said 2022 had been a “year of broken promises and failure on trade” from the government.
“Promise to deliver a USA trade deal, broken. Promise of a trade deal with India by Diwali, broken. Promise to have 80 per cent of UK trade covered by free trade agreement by the end of 2022, broken,” he said. “The Conservative record on trade has either been delivering no deals or bad deals.”
When asked earlier this month by Thomas-Symonds whether the UK would hit its 80 per cent target, Kemi Badenoch, the trade secretary, said: “I have been very clear that what is important is the substance of trade deals, not the timing.”
Privately, ministers concede that the 80 per cent goal cannot be met until US president Joe Biden takes a more active interest in striking a trade deal with the UK.
On Friday the Department of International Trade said the government would only sign new agreements that were fair, reciprocal and in Britain’s best interests.
“We have already signed trade deals with 71 countries plus the EU that account for £814bn of bilateral trade, and we are now seeking new deals with India, the Gulf, Canada, Mexico, Israel and the £9tn combined GDP free trade bloc in the Indo-Pacific, which will spur growth, create jobs and boost wages for UK workers,” a DIT spokesperson said.
Source: Economy - ft.com
