There is a lot we can do before Brexit to realise our trading potential
3 min read
Minister of State for Trading Policy Greg Hands says that getting the "bread and butter" of trade deals correct will be crucial in making it easier for the UK to conduct trade after Brexit.
This week marks a year since the Government triggered the process of leaving the EU under Article 50.
There’s been a lot of work since then to prepare the UK for its new role outside of the EU, not least from the Department for International Trade as we look to establish our own independent trade policy for the first time in over forty years.
As the IMF predicts, 90% of global growth will be outside the EU in the coming decades, and the UK’s trade policy should be about helping our businesses tap into that growth.
There’s a lot of focus on the potential of new trade agreements, and our discussions with countries like Australia and the USA are working towards this, but there is a lot we can do even before we leave the EU to realise our trading potential.
This week the UK held its tenth annual ‘JETCO’ trade and economic talks with Brazil, and Trade Secretary Liam Fox and I were joined by Brazilian Trade and Industry Minister Marcos Jorge de Lima in London.
Brazil and the UK are the 9th and 5th largest economies in the world respectively, and our shared economies make up 6.1% of the world’s GDP.
Yet our annual trade is £5.4 billion, far below its potential and also compared with the trade we share with similar sized economies.
To improve this record we need to make it easier for UK and Brazilian companies to operate in each other’s markets, to overcome any regulatory barriers that make trade more expensive.
That’s where discussions like this JETCO come in. At this week’s meeting we signed a new partnership between our export credit agency, UK Export Finance, and the Brazilian National Development Bank to co-finance infrastructure projects in Brazil.
The Global Infrastructure Hub estimates that Brazil’s growing population will need £45 billion invested in national infrastructure by 2040. So providing financial support for Brazilian companies using UK contracts and UK companies bidding for those, will help UK firms seize that potential.
Similarly, a new Patent Prosecution Highway agreement will also prioritise the process for securing patents in each other’s markets and make it quicker and easier for companies to protect their intellectual property.
Again, this is an agreement between governments that has big potential for UK firms. The UK exports £288 million of pharmaceuticals to Brazil each year. The faster that is secured, the faster companies get their new products into the Brazilian market.
We are also working with Brazil on a trade facilitation programme which aims, among other things, to reduce the time and cost to import and export in Brazil, through faster processing at ports and helping Brazil comply with OECD standards as it moves to become a member of the OECD.
This is the bread and butter of trade, but its hugely important if we want to make it easier for UK companies to trade and do business in Brazil.
As we leave the EU, and establish new trading relationships with growing markets around the world, it will be these technical issues, and how we can work to support them, that make an immediate difference.
Greg Hands is the Minister of State for Trading Policy and the Conservative Member of Parliament for Chelsea and Fulham
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