Today, the government will seek to define the UK’s place in the world as it publishes “Global Britain in a Competitive Age” reviewing foreign and defence policy. Back in 1962, the American statesman, Dean Acheson, famously observed that the UK had “lost an Empire but not yet found a role.”
Now, after Britain has left the EU, the time is ripe to be thinking about the UK’s international standing, particularly when it comes to trade.
We all know that trade is good for economics, but it is also good for politics, diplomacy and security too. An outward-facing trading nation is invariably a stronger political force.
The UK must enhance its trade and ties with fast-growing emerging economies across the world in Asia, Africa, Latin America and beyond. After all, 90 per cent of global growth is expected to come from outside Europe over the next two decades.
Growing the UK’s trade with emerging markets, will also enhance our political standing. We have a multipolar international order, with the rise of power of Asia and other parts of the world. This is reflected in the rise of the G20, which is gradually supplanting the G7 of Western nations.
There has been a lot of talk about the BRIC economies in recent years and certainly the UK’s trade with Brazil, Russia, India and China has lots of room for expansion. Specifically, today’s publication will advocate an economic pivot to the Indo-Pacific region. India is on course to become the world’s third largest economy by 2025, and it’s welcome news that the PM is due to visit India when Covid restrictions allow to push ahead with our trade partnership.
I have a wealth of experience of doing business in India and five years ago I was part of the delegation when then-Prime Minister Theresa May visited. I saw the trade deals agreement on the trip run alongside warm chemistry between the governments and cooperation on security and defence.
The government should not be passive and should play a proactive role in facilitating better trading relationships. When I first started my pharma business, I used the network of British Embassies to help me find local partners. Nowadays, the sophisticated diplomatic machine can offer trade missions, conferences, tenders and International Trade Advisers, which can all support exporting and investment opportunities.
I am a believer in not only the economic benefits of free trade but also its political advantages. Trade brings people together, and facilitates cooperation and understanding between nations. The eighteenth century philosopher Montesquieu famously asserted that “the natural effect of commerce is to lead to peace. Two nations that trade with each other become reciprocally dependent:”
Having said that, I am not a trade absolutist. There are some countries that we should not trade with because of their disdain for democracy and a complete mismatch in values.
It’s up to the government to decide where to draw the line and business should follow their lead. When it comes to foreign governments who are criticised for human rights, I am convinced by the argument that we will carry more political leverage, the more we trade with them. To my mind, the carrot of trade is preferential to the stick of sanctions.
China, India and a host of other countries have embraced trade liberalisation and other market-oriented reforms, and been able to grow and raise standards of living for their populations.
Foreign aid may provide a sticking plaster, but it is economic development and trade which enables countries to stand on their own two feet and develop. Furthermore, people in these countries should not be denied higher-quality products and services from imports because of judgements made by their leaders.
Today’s publication is a reminder that the UK still has a key role to play on the global stage, as the fifth largest economy, a great trading nation, and an important strategic, defence and diplomatic country. The UK will be hosting both the G7 and COP26 talks this year, which is a reminder of its global role. A strong and vibrant trading Britain will be a force for good in the world.