Speaking at the first CBI International Trade Conference, Director-General, Dame Carolyn Fairbairn, said: “trade offers one of the most powerful routes to post-pandemic recovery."
She stressed that better trade outcomes will create new jobs in all parts of the UK and underpin the Government’s levelling up agenda across the country.
Launching the CBI’s new report on trade, Partnership for Prosperity, Carolyn says trading success rests on a close partnership between government and business.
Good morning everyone. Thank you, Karan. I’m so pleased to be here to open our conference, and a particular pleasure to be here in person.
POWER OF TRADE
We are going to spend the next two days talking about trade.
It may seem a side issue compared with COVID and the vivid and daily challenges we are facing. But, in reality, it is absolutely central. Because now — perhaps more than ever — thriving, open global trade is fundamental, not only to the global economy’s recovery from this pandemic but also to the UK’s identity as an outward-looking world leader.
Trade is one of the most powerful economic tools the UK has to attract investment and create jobs as we recover and rebuild from this crisis.
You can see this in spades in our economy today. As we speak, pioneering clusters of firms across the UK are taking advantage of the benefits being global can bring.
Take Belfast: a world force in cybersecurity and emerging tech.
Or Swansea, where firms are drawing on years of industrial expertise to lead in the global transition to net-zero.
Or Glasgow’s cutting-edge BioCorridor: pioneering advances in next-generation healthcare, increasingly famous around the world.
PROSPERITY BY DESIGN
These hubs of global expertise are created, not by accident, but by design.
With industry, academia and government working together, regionally and nationally, to build the most competitive business environment possible and using it to attract investment, scale up exports and create new jobs.
And I know that Antonia and her team at the DIT, under the leadership of Secretary of State Liz Truss, are committed to striking deals that will help many more communities thrive.
So far, the UK has rolled over 20 of the EU’s trade deals with countries including South Korea and Switzerland. These are huge achievements and can hopefully be replicated with Canada and Turkey by the year’s end.
The UK’s nearly complete Free Trade Agreement with Japan is worth over £15 billion with valuable wins for digital trade, financial services, creative industries, manufacturers, and food and drink producers.
And firms are now looking ahead to opportunities with the US, Australia, and New Zealand.
A WORLD INTERRUPTED
As you can tell, we at the CBI believe strongly in trade as a great force for good. But it’s also true that its benefits haven’t always been felt by all.
Public trust in trade has taken a hit. People question whether it delivers the good jobs, keen prices and better lives promised.
And that uncertainty has only intensified in the past months with the pandemic striking at the heart of national economies as well as national health. And fortifying the creeping protectionism of recent years. All at a time when the world needs to work together more closely than ever on issues from vaccine development to urgent climate action.
CBI TRADE MANIFESTO
Tough times indeed. However, this turbulence also creates the chance – and I would argue the overwhelming need for the UK to reaffirm its status as a global leader.
That in 2021 the UK is not only hosting COP 26 but also taking up the presidency of the G7, creates an extraordinary opportunity for leadership. We will also be assuming our place at the top table of the World Trade Organisation for the first time in 40 years.
Together, these roles put the UK in an unprecedented position to shape the world’s post-pandemic recovery and use it to achieve some of the most important goals of our time:
- More inclusive global growth
- A net zero carbon future
- Renewed commitment to barrier-free trade that has been proven to raise living standards so powerfully over decades.
So today, the CBI is launching its Partnership for Prosperity report: setting out our plan for how UK government and business can work together to achieve this vision.
We have four main recommendations.
A PARTNERSHIP FOR PROSPERITY
First, a major step-change in the collaboration between business and government.
The past few months have shown just how much business and government can achieve together:
- Making ventilators to save lives
- Rising to the PPE challenge
- Partnering on rescue packages to save millions of jobs.
Now that same energy needs to be brought into the world of international trade.
The architecture set up to inform the UK’s trade negotiations - by Liz, Antonia and the DIT team has been a valuable first step.
But we need to do much more. Many of the UK’s allies, such as the US, Canada, and Australia, go much further than consulting with business.
They partner with them in real-time, including on the toughest trade-offs, through regular and structured engagement, business can give UK negotiators, the intelligence and edge they need to get the best deal.
And when the ink is dry, business can then help promote the opportunities to firms of all sizes across the country. I look forward to discussing this opportunity for much stronger partnership shortly with Antonia, and then this afternoon with Liz Truss, Secretary of State.
TRADE TO LEVEL UP
Second, levelling up needs to become a central objective of our trade and investment ambitions and vice versa.The CBI fully backs the government’s ambition to tackle regional inequality and level up. And we believe that unlocking investment is key.
Right now, the UK is Europe’s top location for inward investment and the second highest in the world. But, in 2019, over half of these FDI projects landed in London.
The UK’s investment calling card needs to stretch much more widely across the UK. This means reaffirming London’s global investment status, while at the same time extending the reach of inward investment - as well as the growth secured through exporting - to all UK regions and nations.
So, the CBI is today calling for a new Office of Trade Impact – along the lines of the Australian Productivity Commission – to analyse UK trade policy success across regions and sectors.
The devolved administrations and Metro Mayors should also be far more closely involved in trade policy to harness local pride, and the jobs and investment that successful exporting can bring to a region.
Third, the UK should be the world’s champion for trade in services and innovation. These are two global growth areas where British companies are already world leaders.
In 2019, the UK’s global services exports hit £328 billion, second only to the US as the world’s leading services exporter.
Yet while the opportunities here are great, so too are the regulatory barriers. With services’ share of global trade set to increase by 50% in the coming decades. The UK needs to focus far more and push far harder for trade liberalisation in services, from finance and legal to creative and design.
And mobility of people must be a big part of this. Success in services depends on getting the right people to the right place fast and easily – yes, even in a world of Zoom.
STEPPING UP GLOBALLY
Finally, and as I have already touched on, the UK has an unprecedented opportunity to lead from the front, at the highest of global tables.
As host of COP26 and G7 president in 2021, the UK will have the world’s attention and we should use it to challenge protectionist forces stalling global progress. To build a consensus among like-minded nations. To rebuild public trust in free trade, and to reinforce the global rules-based system for the modern age.
And as the CBI takes on the leadership of the B7 next year, the grouping of business organisations from the G7 countries we’ll ensure business plays its full part alongside the G7, and make the most of this chance to showcase the very best of UK innovation and expertise on a world stage.
The world will be watching, and we won’t disappoint them.
SECURING A DEAL
Let me finish with a challenge close to home and right in front of us.
With so many UK FTA talks already underway it’s a vital time for the UK to demonstrate its commitment to rules-based free and fair trade consistently and without faltering. And, at the CBI, we believe securing an agreement between the EU and the UK is central to these efforts. Compromise and common sense, matched by political will, must guide both sides towards an agreement. And it needs to be within weeks.
Too many firms - in the UK and in the EU27 - are unable to prepare for the end of the transition period because they don’t know what to expect.
Get a deal, and firms will do all they can to prepare. Get it soon, and they will have more time. Jobs will be saved, economic hardship minimised at a time when mass unemployment is knocking on our door and every job counts.
The message from business is clear: the time for a new EU/UK deal is now. And then both sides can draw a line and look beyond it. For the UK it will enable firms to look forward to the global opportunities ahead. And to do so with the UK’s brand as a free trading nation rooted in strong values reaffirmed beyond question.
So, to pull these thoughts together, as we emerge from this crisis, trade offers one of the most powerful routes to post-pandemic recovery.
This is a golden moment for the UK to champion free, fair, and open trade, particularly in industries of the future, from services and low-carbon innovation to tech and life sciences. Government and business working in partnership. Delivering a long-term vision for UK trade and investment that enables every UK region to prosper. And stepping up globally, to tackle the defining challenges of our age.
These may be dark and tough days, but by working together we have a historic chance to shape a better future.