I
t did not happen, of course. But now, four years on, there are signs that things have begun to move in the right direction:
• this spring, brand-new trade deals came into force with Australia and New Zealand
• this summer, the UK became the first European nation to formally join the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP)
• Indian officials have expressed confidence that a major FTA between the two nations could be completed by year’s end
• negotiations are underway for a similar deal with the Gulf Cooperation
states, including Saudi Arabia
• talks are underway with both Turkey and Switzerland over much more comprehensive trade agreements.
The discussions with Turkey highlight the fragility of Whitehall officials’ oft-repeated claim that post-Brexit FTAs with 71 nations are already in force. What they fail to mention is that 68 of these are merely carry-over agreements from the days when the UK was a member of the European Union (the only exceptions being this year’s deals with the CPTPP, Australia and New Zealand). They are far from all-embracing. Even membership of the
11-nation CPTPP involves nine countries – Australia, Canada, Chile, Japan, Mexico, New Zealand, Peru, Singapore and Vietnam – with whom the UK had either new or carry-over EU deals. Brunei and Malaysia were the only exceptions. Nevertheless, Henriette Gjaerde, trade and customs stakeholder
relationship specialist
at the Institute of Export and International Trade, commented: “This milestone marks a significant step forward in the UK’s global trade strategy, strengthening our relationship with some of the fastest-growing regions in the world. UK businesses will benefit from greater access to the markets of 11 countries, which, including the UK as the 12th member, account for a combined GDP of £12 trillion.
Council (GCC)
“This agreement can offer numerous opportunities for UK exporters, providing improved market access and reduced tariffs on goods. It can foster new partnerships across the Pacific region. This is a time of opportunity, and we look forward to supporting businesses in maximising the opportunities this partnership offers.”
INDIA-UK AGREEMENT CLOSER Although membership of the CPTPP, which is expected to become effective on a practical basis in the second half of next year, is estimated to have only a minor effect in the short term on Britain’s GDP, the longer term prospects involving a market of half a billion consumers appear enticing. The biggest prize this year
promises to be an FTA with India. Even before any deal has been struck, total trade in goods and services between the two nations stood at £36.3 billion in the year to the end of March, representing a 34.2% rise on the previous 12 months. Total UK exports to India amounted to £14.7 billion (up 44.2%), while India’s exports to the UK rose 28% to £21.6 billion. While the-then Prime Minister
Boris Johnson said an FTA would be signed and sealed by October last year, detailed negotiations have taken much longer, with the twelfth round of talks getting underway in the middle of August. One reason for the length of
negotiations has been that India’s government wants a complex agreement with the UK to serve as a template for other FTAs it is negotiating, including one with the EU. Even so, sufficient progress has been made to prompt Sunil Barthwal, India’s commerce secretary, to state in the summer that a deal would be concluded before the end of this year. ‘The Hindu’ newspaper reported: “Both sides are working to iron out differences on issues including an investment treaty, intellectual property rights and rules of origin.” Briefings in late August by
government officials in London downplayed speculation that a deal could be reached by September’s
G20 summit in New Delhi. “It’s about the deal and not the date,” said a government source. “There are several outstanding issues, and you leave the really tricky stuff until the end.” This sparked press speculation that sticking points included tariffs on Scotch whisky and UK car imports. However, reports from India
suggested these issues had been as good as resolved with a ten-year plan to progressively reduce the tax on whisky and with Narendra Modi’s government agreeing to reduce the import duty on cars to 75% from the current 100%, although compact cars would be excluded. According to Bloomberg, there would also be a cap on the number of vehicles that could be sold under the lower tariffs.
“ THIS MILESTONE MARKS A SIGNIFICANT STEP FORWARD IN THE UK’S GLOBAL TRADE STRATEGY, STRENGTHENING OUR RELATIONSHIP WITH SOME OF THE FASTEST-GROWING REGIONS IN THE WORLD.”
HENRIETTE GJAERDE, THE INSTITUTE OF EXPORT AND INTERNATIONAL TRADE
23
THINK GLOBAL PEOPLE TRADE
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