Liam Fox is Secretary of State for International Trade, President of the Board of Trade and MP for North Somerset.
One of my most frequent, and frustrating, experiences of 2017 was returning from a positive and optimistic international visit only to encounter a wave of negativism at home. The interest being shown in Britain overseas, and an increasing willingness to trade and invest with us, was in stark contrast to the self-defeating pessimism that is too often on show from certain politicians, commentators and media outlets over here.
It is easy to get the impression that these people would rather see Britain fail than see Brexit succeed. So, let’s begin 2018 with a reminder of the good news.
In 2017, we saw the highest level of Foreign Direct Investment (FDI) projects into the United Kingdom in our history – a vote of confidence in the future from real investors. We also saw that exports of our goods increased by 15.9 per cent and services rose by 11.6 per cent to £617 billion in the year to October 2017, following increased interest in exporting from across British business. The UK trade deficit in goods and services narrowed by £10.7 billion over the same period.
I may have been outspoken in the past regarding the small proportion of British businesses who sell goods and services abroad, but this is clear evidence that UK companies are succeeding on the world stage. The second half of 2017 also saw strong growth in manufacturing output and, partly as a result of our improved export performance, order books for British manufacturers are stronger than at any time since August 1988.
We also saw a continued explosion of interest in British tech and innovation. There have been 58,000 tech start-ups in the UK – that’s almost one an hour. I intend to showcase this further in 2018 and I will make an announcement on this in my first international visit of the New Year in China later this week.
All of this adds up to an extremely positive picture for the British economy which already has record employment levels and is the envy of many of our European neighbours. I’m glad that the Department for International Trade (DIT) has been able to play its role in our trade and investment success securing a historic record number of inward investment projects in our country’s history. This is estimated to have created 75,226 new jobs in 2016/17 and safeguarded an estimated 32,672 jobs, this amounts to almost 108,000 new and safeguarded jobs associated with FDI projects recorded in 2016/17.
We are delivering on our manifesto commitment to create an overseas network of HM Trade Commissioners. External applications for these posts close on 11th January, and our 108 overseas posts are being reorganised to provide more targeted help to British exporters. We have made it easier for SMEs to access UK Export Finance (UKEF) through delegating powers directly to their banks.
We have also ensured that British businesses are able to operate in some of the worlds more difficult markets by making available, through UKEF, political risk insurance at affordable rates. Our digital trade portal, great.gov.uk, continues to improve with a new ‘export readiness’ tool and our Export Hub roadshow, encouraging SMEs to export, has visited over 200 constituencies. None of these were ever likely to make front-page splashes but they are making real differences to real businesses, as our data shows.
There is every reason to believe that this optimistic picture can be maintained. Global trade, which has been growing more slowly than global GDP over the past few years, has picked up again and looks set to be robust in 2018. In the US, the Trump tax cuts have created a confident environment for growth in the world’s largest economy. If we want to have the income to fund our essential public services and pensions, we will have to sell into these growing markets. The IMF projects that around 90 per cent of world growth is likely to come from outside the EU.
Currently, the EU accounts for 43 per cent of UK exports in 2016, compared to 54 per cent in 2000. The EU market as a proportion of Britain’s total exports fell by three per cent from 2015 to 2016 and four per cent from 2014 to 2015, an important consideration as we negotiate Britain’s future regulatory alignment.
As we leave the European Union, we will take up our independent seat at the World Trade Organisation (WTO) in Geneva, which will give us an opportunity to help shape global trading policy. At the WTO conference in Buenos Aires last month, I argued strongly for the need to achieve global agreements on digital and e-commerce if we are to ensure that the economic potential of these developments reaches into every part of the global economy, particularly developing countries.
Research shows that women are much more likely to take advantage of the flexibility that e-commerce allows, enabling many more to participate in their economies. This is key not only to the development of greater prosperity but we also know that countries which have higher proportions of women in the workforce are likely to be more politically stable and thus contribute to wider security.
We will also be able to free ourselves from the EU common external tariffs which discriminate against developing countries who try to add value to the basic commodities, a subject about which I will be saying more about early this year.
As we establish our own independent trade policy for the first time in 40 years, we will be able to negotiate new trade agreements with major trading partners. It is worth remembering that the EU does not have free trade agreements with the US, China, India or the Gulf states, and though we are not able to negotiate new trade agreements while we remain within the EU, we have established 14 trade working groups across 21 countries, to help us prepare for Brexit.
I’m never sure whether groups such as Open Britain, who keep asking why we do not yet have any new free trade agreements, simply don’t understand the EU rules under which our trade operates or whether they are just utterly disingenuous. Our departmental priority in 2018 will be to ensure that we do all the work necessary so that we continue to benefit from the free trade agreements that the EU already has with other countries and that we maintain full access in both directions at the point at which we leave. Stability now with maximal flexibility in the future is what we seek.
That – coupled with a continued drive to see more direct investment coming into the UK and more exports going abroad – will provide my department with a full work programme. Together, since Theresa May created our department after the referendum, our DIT team of ministers has undertaken over 141 visits abroad, promoting British Trade and Investment and discussing the potential for future trading relationships.
Attitudes need to change as we go into 2018; Brexit is not a time bomb to be defused, but a great opportunity to be embraced.
Our international competitors are already out there trying to carve out their slice of the world’s growing markets. We need to get beyond the obsession with criticising Brexit, lift our horizons, and be out there, too.