Writing in July 2016 after the UK’s vote to leave the EU, David Davis, the Conservative government’s first secretary of state for Brexit, foretold a golden age of global trade deals.
“I would expect the negotiation phase of most of them to be concluded within 12 to 24 months,” he predicted breezily.
More than three-and-a-half years after Mr Davis’s fact-free forecast, the government continues to emit an overpowering fog of promises about non-European trade deals.
If it were possible to monetise these promises, we would all be rich by now.
What is the reality behind the propaganda?
In a new booklet published by the UK’s international trade department, official statistics show that EU countries accounted in 2018 for 49.1 per cent of British trade, valued at £659.5bn, and non-EU countries for the rest, valued at £683.3bn.
Seven EU countries (Germany, the Netherlands, France, Ireland, Spain, Belgium and Italy) and Switzerland were among the UK’s top 10 trading partners. The US was the largest, and China was the fifth largest.
Despite the EU’s prominence in British trade, Prime Minister Boris Johnson’s government plans to detach the UK as far as possible from continental Europe in terms of regulatory standards and legal frameworks.
The other side of this coin is the pursuit of deals with the US, China and other large non-European economies.
Some, such as Japan, already have extensive trade and investment ties with the UK. But Japanese business executives sound gloomy.
“Essentially, the United Kingdom’s departure [from the EU] is nothing positive for the Japanese companies doing business there, so the focus going forward is how much the negative impact is alleviated,” Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, said last month.
Like others in Asia, executives in Tokyo say they cannot set precise goals for a UK trade deal until they know the details of London’s post-Brexit relationship with the EU.
Professor Rana Mitter, a leading authority on modern China, said few countries had a comprehensive trade accord with Beijing. Those that do — Australia is an example — usually have products, such as minerals or advanced machinery, that make a deal attractive to the Chinese.
“The UK doesn’t have one obvious sector that China sees as of compelling benefit to its own interests, so a deal is unlikely to be agreed quickly,” said Prof Mitter.
On the other hand, some Chinese specialists say a trade deal would make the UK more dependent on China, and so London might become more willing to speak up for Beijing’s interests in international forums.
For the Johnson government, the larger point is that the dynamics of world trade have changed since Mr Davis’s insouciant optimism of 2016.
President Donald Trump is not only committed to an “America first” trade policy but wants its allies, including the UK, to join it in taking a tough line against China for national security reasons.
A furious row erupted between Washington and London over Mr Johnson’s decision to let Huawei, the Chinese telecoms company, play a partial role in developing the UK’s 5G cellular networks.
Other frictions are emerging over London’s plans for taxes on digital services, the Trump administration’s threats to impose tariffs on car imports and the UK’s quiet support for the Iranian nuclear deal, which Mr Trump abhors.
Moreover, a close look at the US negotiating objectives for a trade deal indicates that Washington has its eyes on drawing London into its regulatory orbit.
In a government press release last weekend, Mr Johnson was quoted as predicting that “our two great nations” would be “trading Scottish smoked salmon for Stetson hats”.
It was admirably faithful to the jaunty spirit of the now forgotten Mr Davis.
Further reading
Sunak reworks Budget measures to deal with virus
Rishi Sunak has vowed to take “firm action to support families, businesses and the public services” in response to the spread of coronavirus when he presents his first Budget on March 11, write FT reporters. The Budget was supposed to showcase a new economic vision for Britain but as the country braces itself for the fallout from the outbreak, the newly appointed chancellor is having to rework the statement to convey a sense of “security”. Read more
Free movement in Scotland for EU citizens wins support
Maintaining free movement in Scotland for EU citizens would not create a “back door” to the rest of the UK and undermine its post-Brexit visa system, a leading immigration law firm has concluded, writes Mure Dickie. Read more
Support for Eurosceptic parties doubles in two decades across EU (Jon Henley, The Guardian)
Brexit trade talks begin with EU
Hard numbers
New orders help rise in February manufacturing activity Read more
