Britain can make up for any export loss post-Brexit by building on under-developed links with countries like India and making it a priority in its trade negotiations, according to a report by a top UK-based think tank.
Britain can make up for any export loss post-Brexit by building on under-developed links with countries like India and making it a priority in its trade negotiations, according to a report by a top UK-based think tank. Open Europe, in its research titled ‘Global Britain: Priorities for trade beyond the EU’ released yesterday, said there is enough untapped trade potential to offset the possible effects of Brexit on exports to the European Union (EU).
“There’s little point making policy looking at just today’s world. According to projections, Germany’s GDP will grow by 14 per cent between 2017 and 2030. Over the same period India’s is expected to more than double. So, we have modelled how the data will appear in 2030, using predicted growth figures,” the report says.
“There are some surprising findings. According to the model, UK exports to India, Canada and Israel consistently under-perform. By 2030, the UK would, we predict, under trade with those three countries by nearly 10 billion pounds of goods a year,” it forecasts.
The top 10 under-performing markets for goods and services represent untapped UK export potential of just over 41 billion pounds in 2030, according to the analysis.
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The researchers, therefore, call on the UK government to pursue a careful strategy of “intensive engagement with under-performing countries, but above all India, Canada, Israel, and China”.
It also advises not to focus too much on 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 US and other major economies without an FTA,” the report notes.
Effectively exploiting Britain’s soft power assets of deep, historic connections with countries like India, developing deeper connections with “priority countries” of India, Canada and Israel, and a focus on service exports are among some of the report’s other recommendations.
It concludes: “All three of our top priority countries share strong historical ties – Canada and India remain in the Commonwealth, Israel looks fondly on the country which allowed it to be created. All share our legal system.
“And, while Canada speaks English, English is a lingua franca for India, and widely understood in Israel. The task of the government is to seize the opportunity of Brexit to draw fully on our comparative advantages, the English language, the common law system, the status of the UK judiciary and legal system, the UK’s security, development and defence reach, our world-class universities, our innovation and science.”
Open Europe says it has developed its quantitative analysis to help inform the crucial decisions on trade and commercial policy.
The model is based on the observation that countries trade more with bigger countries that are closer to them.
Other factors, such as diplomatic representation and soft power connections were also considered.