How Britain can get trade with the EU back on track

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This seems to have been a week of grim introspection as the UK faces the harsh reality of its post-Brexit bond: persistent inflation, stagnant growth and entrenched battles over public sector pay and really no particularly good ideas about what to do. about. Obviously everyone agrees that the economy needs to grow faster, but the launch of Liz Truss' Growth Commission this week was long on diagnosis (global trade has stagnated for the last 20 years) and short on remedies, beyond the promise of modeling the benefits of a smarter economy. deregulation My colleague Robert Shrimsley wrote an incisive column exploring the internal conflict this has created in the Tory party between Trusite ideas of growth, the Govean desire for place-making and the orthodoxies of 'osborneomics' espoused by the current occupiers of the numbers 10 and 11 Downing Street. Nothing is ever completely about Brexit, but this being the 'Britain after Brexit' newsletter, I'll focus on the parts that are. Robert writes that Brexit arose from the economic malaise that followed the 2008 financial crisis and a sense that the traditional market economy in which the Conservative party had long placed its faith was not generating sufficiently broad-based prosperity.

Brexit was therefore a “reaction to that failure”, with Boris Johnson’s idea that the economic impact of Brexit would be countered by “investments in skills, infrastructure, science and public services” which was Job Function Email Database then crushed by the pandemic. of Covid-19 and its ruin of public finances. Back to front thinking That's a reminder of how obviously contradictory the original thinking was: deciding that Brexit, offshoring and economic nationalism would actually be a tonic for the British economy when almost 50 per cent of UK trade goes to the EU. Johnson himself, in his first major Brexit speech in Greenwich, came close to acknowledging this. The United Kingdom was embarking on a solo mission to boost its global trade at a time when geopolitics and growing mercantilism had “choked” the global trading system. As Johnson observed rather bleakly: “Trade used to grow at about twice global GDP, from 1987 to 2007. Now it is barely keeping pace.” It is not a propitious time to launch 'Global Britain.



Trade matters, as this 2021 UK government analysis explains, arguing for faster export growth and highlighting the growing impact of rising 'non-tariff barriers' (the same barriers as David Frost It refused to recognize when it negotiated the ATT and continues to deny now . Analysis by the Department of International Trade found that exporters of goods have a "productivity premium" of 21 percent, with exporting companies paying higher wages and showing greater resilience to economic cycles than non-exporting companies. “This means better-skilled, better-paid jobs for people across the UK and a more competitive national economy,” wrote Richard Price, chief economist at the then DiT. Post-Brexit trade record This is a political point that the Labor Party has so far not dared to try to make on its Conservative opponents: Brexit has hit the UK's goods trade (goods exports were 17 per cent below previous levels to the Trade and Cooperation Agreement in the first quarter of 2023) and that blow falls hardest in the Midlands and the North, where manufacturing provides a greater proportion of high-productivity jobs.