Shanker Singham: Today’s signing of the UK-Australia deal symbolises a new economic era for Global Britain

17 Dec

Shanker Singham is CEO of Competere. He is a former adviser to Liam Fox when he was Secretary of State for International Trade, and to the Office of the United States Trade Representative.

We have often taken the special relationship for granted on this side of the Atlantic. While we rest on our laurels, often the US’s other allies and trading partners steal a march on the UK.

What is needed is a comprehensive re-engagement with the US at multiple levels – Prime Minister, Cabinet, ministerial and parliamentary. There is already a lot of private sector to private sector dialogue but these need to be accelerated with ministerial sponsorship.

It is clear that on matters as diverse as the Northern Ireland Protocol, to our interest in a comprehensive free trade agreement, the UK has not been able to land forensic, knock-out blows, whereas others, notably the Irish and the EU have been more successful in prosecuting their interests with the new administration.

There are signs of improvement however. We have seen a significant uptick in the frequency of UK ministerial engagements in Washington recently. There were at least five UK ministers in the US, the week of the December 6 for example. Importantly, UK engagement is not limited to Washington DC and New York. Penny Mordaunt, the trade policy minister has just returned from the longest ministerial visit to the US in recent history – a tour of five US states lasting over 10 days, a lifetime for a minister.

Liz Truss, the Foreign Secretary, made a very important speech at Chatham House on December 8, where she acknowledged that the world had broken down into those countries that supported a vision of capitalism based on competition versus those whose capitalist model is based on distortion and cronyism – and that the countries in the former camp constituted a network of liberty. AUKUS was just a start to bring those countries together to pursue an international economic policy that maximised open trade, competition on the merits and property rights protection.

Anne-Marie Trevelyan, the Secretary of State for Trade, also made a recent intervention at the CPS’ Margaret Thatcher conference on trade, where she specifically addressed the cancer of anti-competitive market distortions which are plaguing global trade. In this the UK and US have very similar concerns and are looking for similar solutions – a mechanism to deal with the problem that does not drive a coach and horses through the international trading system.

On what the UK’s regulatory system will look like in the future, Lord Frost was also crystal clear when he discussed this in the House of Lords, noting that the UK will diverge from EU regulation, not just for the sake of it, or because it can, but because it must do so in order to promote a pro-competitive regulatory agenda that both increases economic growth at home, but will also make it easier (and faster) to do trade deals.

The trade policy minister’s long trip led to substantial progress on Memoranda of Understanding with a number of states, as diverse as Tennessee, Oklahoma, North and South Carolina and Georgia. She made a very important speech to the Carter Centre. In it she was much more forensic about a case that does not get made often enough – why a free trade deal with the UK is in the American interest, not just the British one.

The UK leaving the EU’s Single Market and Customs Union is a massive global event. The UK, to quote Minister Mordaunt, has made itself a piece on the global chessboard, and a powerful one at that. It alone is negotiating or discussing international economic policy issues with all the key players, including the EU with which it is one of the few major players to have an FTA already.

The UK has made it crystal clear to its trading partners which side of the table it is going to be on – to inter-operate with the world on the basis of equivalence and adequacy, as the US and CPTPP countries do, instead of pushing its own regulatory vision on the rest of the world as the EU and China do.

This shift is a seismic one in geo-economic terms. If the Americans fail to capitalise on it, they will have lost a huge opportunity to win the battle for the world’s operating system, and to ensure it is based on voluntary exchange, underpinned by open trade and competition, including regulatory competition based on outcomes. This would unleash wealth creation and economic growth at a time when it is so crucially needed as the world struggles to emerge from Covid-19.

But the UK is not just making speeches. It is delivering. Today’s signing of the UK-Australia deal means that the UK’s entirely de novo trade negotiating agenda is now in full swing. Contrary to the naysayers who said that trade deals take 10 years to do, this was initiated in 2020 and concluded in 2021 – within a year of the UK leaving the EU.

It is anticipated that the NZ deal will quickly follow. Within the year, the UK also concluded a deal with Japan that contains important new elements and departures from the EU’s deal especially in the crucial data area, signed a deal with Australia, established its working group for accession to the CPTPP, and will doubtless conclude a number of MOUs with US states as a down payment on an eventual FTA with the US. This has all been done within a year of concluding the FTA with the EU, the point at which our trading partners knew whether we could do trade deals or not.

The UK and US must now use the recently announced Atlantic Charter to push for the key initiatives such as the reduction of anti-competitive market distortions around the world and the commitment to open trade and competition on the merits.  They must tie other nations into the AUKUS deal which is much more than an agreement about submarines, especially the Japanese.

The geo-economic tectonic plates are shifting as we said they would, but even faster than even we hoped and anticipated. For the first time in a long time, the network of liberty countries look like they might be winning.  We are far from out of the woods, and the world remains a very dangerous place for freedom, but these countries now have line of sight to victory, and the UK is their champion. We may yet lose, but if we do, it will be because this moment of opportunity was wasted.