Britain faces an enormous challenge in the wake of Brexit, but the prize is more than worth the fight. That’s according to one experienced former trade negotiator who now finds himself at the heart of the UK’s trade debate.
Shanker Singham is director of economic policy and prosperity studies at the Legatum Institute in London. He’s a trade negotiator who helped former Soviet Union states transition to market economies and who served as an adviser on trade and economic policy to Mitt Romney’s presidential campaign in 2012.
On accepting the role at the Legatum Institute in January last year, he could have expected a comfortable life in wonk world, walking the thick carpets of Legatum’s plush Mayfair HQ, enjoying the grandeur of what must be the swankiest think-tank in the country.
But the referendum result in June last year saw his field of study leap from an academic setting to a position of national importance. Suddenly, Britain needed experts in trade policy.
Singham was a Remainer, having penned an opinion piece on the case for remaining a member of the EU just a day before the vote. But within hours of the result he recognised that if the UK played its cards right, an extraordinary opportunity now lay before it.
“The biggest danger that we face is a lack of ambition,” he tells me. “If you’re going to jump from point A to point B then you have to jump with conviction. Otherwise we’ll end up between two stools, in a mess on the floor.” He says the risk in the months following the vote was that the government tried to cling on to some halfway house of EU membership, such as remaining a member of the customs union – which would have prevented the UK from striking any new trade agreements.
Post-Brexit, he says our success rests on four pillars. “First, there’s what we can do unilaterally – such as reducing tariffs in certain areas and pursuing pro-competition domestic regulation.” The second pillar concerns bilateral discussions with, at first, the EU. On this, Singham is confident that pragmatism will prevail on the continent and the UK will secure a comprehensive free-trade agreement, but “the EU piece of the Brexit prize is actually not as dominating as some people think. It’s important, but it’s not the only thing.”
South Korea, Mexico, Singapore and the US are all countries with whom the UK can strike beneficial new agreements.
The third pillar is plurilateral, and concerns UK-led efforts to reduce the barriers to trade in services across the world. “We’ve been trying to solve these issues for 20 years and we have failed, so the UK needs to bring
together a group of like-minded countries who actually believe in the merits of competition and agree with these countries a very advanced free-trade agreement which deals with services and global value chains. Economically such a network would constitute a much bigger prize than the EU.”
The fourth pillar concerns the UK’s role at the WTO, specifically pushing for greater liberalisation on trade.
I put it to Singham that the risk lies in EU member states putting politics ahead of economics. His response is refreshingly pragmatic. “Britain leaving the EU is not by any means the biggest threat to the integrity of the Single Market and the EU project. The biggest threat to that is economic decline and the best way of ensuring economic growth on the continent is to have a comprehensive free-trade agreement with the UK. EU states have to deliver jobs and wealth creation and there is only one way of doing that: reduce the barriers to trade and be more open to other countries – including the UK.”
He sees the need for a transitional agreement, especially for financial services, but says the EU needs one as much as the City does. “If you have an Italian bank that is not allowed to borrow, lend or take deposits in the City of London because we’ve failed to secure a transitional agreement then you’re going to have an Italian banking crisis. That does not help the EU goal of having a stable financial market.”
Singham is on a mission to ensure that the opportunities of Brexit are not dismissed on the grounds of complexity. “There is a difference between things that are difficult and things that are impossible, and just because it’s possible doesn’t mean it will be easy.” Can we really expect the EU to offer us a good deal? “Economic rationality will prevail. Probably.”
Revolution is in the blood for Tory MP
Policy wonks, MPs and economists gathered at an event in parliament on Tuesday to discuss the hot topic of ‘the fourth industrial revolution’ – robotics, artificial intelligence, etc. The minister responsible for this field is Matt Hancock, minister for digital.
His brief includes digital infrastructure and all things disruptive. He’s come a long way from his ancestors, who were actual Luddites, smashing up weaving machinery in the early 1800s. Up the revolution, comrade.
Absolute scenes at City charity bash
Chaos in the City last night at the Ultimate News Quiz, where teams of journalists battled it out for glory in the name of charity. Piers Morgan hosted, and caused a row when claiming that Snap achieved a value of $28bn on its float. After a stewards inquiry the correct answer of $24bn was agreed.
In the auction, a dancing lesson with Ed Balls went for £5,000. This is particularly amazing when considering that a week for two in St Lucia went for a mere £2,500. I know which I’d rather.
Treasury keeps the boss well briefed
It’s been a busy week for the chancellor, Philip Hammond, with much of it spent dealing with the fallout from his dramatic U-turn over the National Insurance tax rise. No surprise, therefore, that he doesn’t have time to read all the newspapers.
Helpfully, his staff prepare a digest of the top stories for him. Yesterday morning this document was photographed by a Downing St snapper and revealed not one but two City A.M. stories featuring in his daily briefing. Another satisfied reader...?
Of course Hogg had to quit Bank role
“Unpleasant business” was how Treasury select committee chair Andrew Tyrie described the resignation of Charlotte Hogg from the Bank of England. George Osborne went further and suggested that she wouldn’t have had to go if she’d been an older man.
This is utter nonsense. Hogg made a stupid mistake in failing to declare her brother’s role at Barclays, and she paid a high price. But if you’re the regulator you can’t afford to fall foul of your own rules. Her gender had nothing to do with it.