Future International Trade Opportunities

Debate between John Howell and Craig Tracey

Wednesday 1st May 2019 Westminster Hall

[Craig Tracey (North Warwickshire) (Con)]

I beg to move,

That this House has considered future international trade opportunities for the UK.

It is a pleasure to serve under your chairmanship, Mr Rosindell.

Leaving the European Union will provide us with a unique set of opportunities to develop trade policy. As we leave influences and restrictions put on us by the EU, we will be offered an exciting opportunity to compete more freely in global markets. That is one reason why I voted to leave the EU, and I know that was first and foremost in the minds of the 67% of my constituents in North Warwickshire and Bedworth who voted the same.

I recognise not only the opportunities but the challenges—we will face stiff competition globally—but we have to take the opportunity to ensure that the benefits of leaving the EU are fully recognised and, importantly, felt throughout the whole UK, not just in small pockets of it. I have discussed that with many businesses in my constituency and more widely in meetings here in Parliament, and I genuinely feel that we are ready and that the UK will be well placed to fulfil our huge potential.

As the Government know, according to International Monetary Fund projections, 90% of world growth is likely to come from outside the EU, so in future a greater proportion of UK trade will be with non-EU countries. That will be the case whether we are inside or outside the EU.

[John Howell (Henley) (Con)]

One initiative that preceded the referendum was the appointment of trade envoys. That had nothing to do with Brexit, but it illustrates the point about the enormous opportunity, in particular in developing markets. I happen to be trade envoy to Nigeria. Will my hon. Friend join me in saying what a wonderful job that that initiative does in helping to keep us in the forefront of international trade?

[Craig Tracey]

My hon. Friend is absolutely right. One of the priorities of the Department for International Trade, in co-operation with the Department for International Development, is to look at how to replicate and increase the effects of the economic partnership agreements. There are with seven in place now, and we want to extend them to 31 other countries, including African and Caribbean ones. The opportunity is certainly out there, and I agree with him wholly.

We have made a good start. The Government’s stance in the White Paper on trade was encouraging:

“When we leave the EU we will regain our independent seat at the WTO. As an independent member and one of the largest economies in the world, we will be in a position to intensify our support for robust, free and open international trade rules which work for all, and to help to rebuild global momentum for trade liberalisation.”

We are already seeing encouraging signs. According to the OECD, at the end of last year the UK’s inward investment stock was an impressive $1.89 trillion, more than double Germany’s, which stood at $920 billion. The Government have already established working groups and high-level dialogues with a range of key trade partners, including the US, Australia, China, the Gulf Co-operation Council, India, Japan and New Zealand. I commend that approach, and I know that the Department plans and will work to extend that list, continuing to increase global trading relationships.

Analysis in a report by Minnesota’s Minneapolis Fed suggests that were we to reduce trade and investment barriers with the rest of the world by 5%, we would raise UK income by between £25 billion and £30 billion per year, even taking into account possible future restrictions on trade and investment with EU. Dr Graham Gudgin, an economist at the University of Cambridge’s Centre for Business Research, states:

“A smart WTO Brexit with well-designed trade, immigration, agricultural, fishing and regulatory policies would, far from being a ‘disaster’, have an excellent chance of delivering substantial long-term net benefits.”

Exciting opportunities across a wide range of sectors are open to Government as we move forward.