Yahoo Finance UK can replace EU trade by picking trade partners wisely, says Open Europe
Britain should focus on trading with countries including Canada, India, China and Israel after Brexit if it wants to make the most of life outside the EU, Open Europe has said.
Economists believe that those countries have the best combination of growth, location, and demand for British goods - which the UK has so far failed to fully exploit.
Pakistan, Nigeria and Bangladesh are also key growth markets which Britain has not so far properly appreciated, according to the new analysis of export targets by Open Europe.
The top 10 targets - which the economists see as those in which British exporters are currently underperforming - will represent £41bn of untapped potential by 2030, unless trade policies are changed.
The Government should use a range of tools to improve trade, prioritising these target countries, including investment treaties, targeted agreements to tackle specific barriers to trade, and, where possible, free trade agreements (FTAs).
“Although FTAs can be important, including because they serve to symbolise governmental commitment to support trade, the EU’s FTAs of which the UK is party have so far proved far less important for facilitating trade than could be expected. The UK already trades effectively with the USA and other major economies without an FTA,” said Open Europe.
“There do remain barriers to trade to address, but agreeing an FTA with, say, China or the USA will be tough to achieve. Even if a full FTA remains difficult to achieve, there are various possible agreements including bilateral investment treaties or targeted agreements to address particular trade issues.”
Officials can influence trade in other ways, for example with migration links and contact between universities, as well as schemes to promote innovation or to enhance cooperation in certain industries such as defence.
“Possible projects include new scholarship schemes for students from target countries, jointly-funded university research programmes, defence and security cooperation, development expenditure to support infrastructure, and so on,” said the report.
“The more that the UK can work closely with countries across a host of issues, the easier it is to also address barriers to trade.”
Trade in services should be a particular priority, the economists said, as the sector accounts for most of the UK economy but has historically proved harder to open up globally - the EU, for instance, made it easier to trade in goods than in services.
“Some services companies, for example in the insurance industry, have said that EU membership provides them with little advantage, and even that Brexit will be a positive advantage,” the report said.
“To support services trade, the UK needs travel regimes for businessmen and women are not overly burdensome – with security checks, as far as possible, carried out in advance of travel.”
