The UK will only be successful if we boost trade

The government has focused a lot of its economic policy on financial aid, tax reliefs, and employment incentives. This was understandable during the pandemic, but true success will now require us to see beyond the near-term and focus on boosting trade for the long-term, argues Sebastien Kurzel.

One of the defining reasons for leaving the EU was to unlock global trade. Pigeonholing ourselves to the stifling single market prevented us from signing key trade deals with key allies such as Australia and New Zealand, and growing economies such as China, India and Brazil.

But, fast forward to 2021, and, in my view, very little has been done to seize these opportunities, devise an independent trade policy, nor become a global exporter once more.

Britain's thriving manufacturing industry was once the envy of the world. With our innovations in steam power, Victorian towns and cities across the country produced goods – from textiles to steel – and shipped them across the Empire. However, following World War Two, we turned on a sixpence: we shifted towards a service-based economy, deindustrialised, and lost our place on the world stage for trade and commerce.

This period also correlated with the UK joining the EU. The mood of national declinism was palpable during this period, and so the UK joined the EU in an effort to remedy the country's economic failures, increase its international political influence, and avoid political isolation.

Until Brexit, we were inextricably bound to the EU single market, meaning our economic recovery from World War Two was always dictated by Brussels. Now, following the Covid-19 pandemic, the only thing dictating our recovery is ourselves. Boris Johnson's 'oven-ready' Brexit deal promised to ensure our complete independence from the single market and customs union – this promise has so far not been delivered. The Government need to do more to ensure we become a global trade partner once more.

All is not lost, though. We are global leaders in R&D and innovation, and produce cutting edge products that cannot be sourced elsewhere. For example, our thriving aerospace sector is the second largest in Europe, and the third-largest in the world (UK Department for Trade). Our aerospace capabilities alone should, in theory, make us extremely attractive to the global marketplace; aerospace giants such as Rolls-Royce and GKN have unrivalled manufacturing capabilities and are world-famous producers of propulsion systems and aerostructures.

We also have a hugely successful maritime and ports industry, whose growth has been driven by some of the country's most successful entrepreneurs. Just look at Bibby Line Group, whose logistics and shipping businesses have been one of the central backbones of the UK marine and shipping industries for hundreds of years; the business is still guided by the Bibby family under Sir Michael Bibby. Or consider Terence Mordaunt, co-owner of The Bristol Port Company, who has invested hundreds of millions of pounds in the port to increase its capacity as well as introduce new technologies.

Moreover, despite being almost exclusively a services economy, we cannot blame this entirely on our trade woes. UK services perform particularly well on exports, with a surplus running up to 5% of GDP. However, the overarching, inconvenient truth is that in 2019, the UK imported £131bn more goods than were exported (ONS).

Despite our competitive advantages in R&D and innovation, we need a manufacturing revival. Our economy is resoundingly uncompetitive. As we deindustrialised, our share of world trade dropped from 4.4% in 2000 to 2.5%. Even as late as 1970, nearly a third of our national income came from manufacturing (JMIP). Revitalising manufacturing will help us to have more to offer to the table, and in turn, help to reverse the export deficit caused by our services economy. We also need more trade deals.

Before Brexit, the UK automatically benefitted from over 70 trade deals through the EU. Since then, we have only managed to sign trade deals with 66 countries, with emerging superpowers such as China and Brazil missing from that list entirely. However, signing lucrative trade deals was never going to happen overnight, and we are making promising, albeit slow, progress. In October 2020, the UK achieved a landmark trade deal with Japan, which boosted trade between the two countries by about £15bn.

We may no longer be the most powerful empire in the world, but it is not unreasonable to suggest that we can once again become a country that the world wants to do business with. By reviving manufacturing and mass-producing cutting edge goods – of which there is clearly a market for – we will have more bargaining power when it comes to signing trade deals.