Director’s update: Globalised Economy

The last two months have been a tour de force of international meetings. From Davos and WTO MC12 through to the G7 and CHOGM, all have been held in the backdrop of war in Ukraine, global inflation, rising costs and real concerns about how to secure resilience. The B7 in Germany last week was no different.  With lively conversations on the question of deglobalisation and what does decoupling from China mean, it was interesting to hear the German Chancellor Olaf Scholz note that “decoupling was not an option” and to achieve true economic resilience “we need to work with democracies globally to turn multipolar into multilateral”.  Following all this diplomatic engagement the real work starts now.  And industry have an integral role.

We need to take the issues in your board risk registers as well as your growth strategies and ensure that the government is prioritising the international partnerships which will deliver the greatest gain.  The Q2 Regional Council papers started to gather insights on the issues and risks and Tony Danker and I are visiting Washington in two weeks to get State-side views.  From hydrogen development to semi conductor strategies these conversations will not only impact resilience today but how we build resilient supply chains for the future as well.

Ukraine

We continue to monitor member concerns and knock on effects of the sanctions.  As fresh sanctions are announced and implemented it is still important to hear any unintended consequences and indeed we have been helping to refine the legislation implementing the services sanctions (due in coming weeks) with member support.  Companies who had a “stop activity and wait and see” approach to Russia are now actively looking at full exits from the markets.  Every situation is different but even post war normalisation of relations with Russia will take a long time.

India, FTA, MOU

Industry have voiced increasing concern about the progress of the India FTA and the tight Diwali (October) deadline.  Having spoken at length with DIT. I am confident that the timeframes are creating a burning platform to focus minds rather than making the negotiators take things off the table.  With both governments moving into preparations next year ahead of 2024 elections, the window to get something agreed it narrow. We have written to the SoS to share these concerns and reiterate business priorities and have requested increased transparency about what we do and do not expect to land. The latter is coming following the next negotiating round (in 3 weeks).

For those who may have missed it, the CBI and CII signed a Memorandum of Understanding on the 9 May as well.  We have worked hard to ensure this is not just a MoU for the sake of it and there will be tangible work on the FTA, on the green transition, on university collaboration and to increase the Indian voice at the WTO.  This will bring industry together, help to increase collaboration between the two markets ahead of and following the FTA and support wider work on Indian market reform in areas such as IP.

NI Protocol and EU policy

Our Europe team are predicting a busy Autumn on the NIP.  We are continuing to speak to both sides to encourage a negotiated outcome, sharing member insights and providing practical solutions on how to implement the Northern Ireland Protocol.  Whilst the NIP is front and centre it is important to remember the increasing role of the EU as a global policy machine.

Over Q3, Sean and the team in Brussels will be refining the key areas which have impact for the UK and the CBI International Council will have oversight of our influence plans.

Trade missions, ministerial visits and major events

The world is opening up once again and the sheer number of inbound delegations this last month has been vast (US + states, Japan, Mexico, Colombia, Uruguay, Morocco, Georgia, Armenia without mentioning EU nations!!).

Equally UK Ministers have been doing the rounds and business having increasing appetite to use their visits to support growth around the world. The UK Tradeshow Programme is open for applicants, there is an Atlantic Future Forum in New York mid September and we will be taking a trade delegation to both the B20 in Indonesia (mid October) and India (end of November).

Do reach out if you’d like to know more and we are pressing for government to share a list of Ministerial destinations on a rolling basis.