"Post-EU-US agreement, even remaining Brexit doubters can acknowledge that Brexit offers some advantages"
UK's Independent Trade Policy: A New Era for Trade Relations
The UK's ability to act swiftly and decisively in international trade negotiations has been on full display, most notably with the deal struck with the US. This newfound agility is just one of the benefits of the UK's independent trade policy post-Brexit, as outlined in the Policy Exchange report "Trading Tigers."
According to Ben Ramanauskas, a senior research fellow in economics at Policy Exchange, the UK can negotiate deals tailored specifically to its interests. These deals have the potential to reduce tariffs more effectively than EU deals would have, while also allowing for strategic partnerships beyond the EU framework.
One such example is the free trade agreement with India, estimated to save British businesses up to £400 million annually in tariffs. Another significant development is the framework deal with the US, which was struck shortly after President Trump's inauguration. These deals highlight the UK's capacity to forge new trade relationships independently and maximise benefits for its businesses.
In comparison to the EU, the UK has reportedly achieved more favourable terms in some recent trade deals. For instance, the UK's 10% tariff on certain US goods is better than the 15% tariff that UK exporters would have faced if still bound by EU agreements, as acknowledged by UK Business Secretary Jonathan Reynolds. This advantage stems from the UK's ability to negotiate more competitive terms outside the EU's collective bargaining stance.
However, it's important to note that the UK's independent trade policy isn't without its complexities. While the UK benefits from flexibility and reduced tariffs, the EU's negotiating power as a large bloc offers it a strong baseline in trade talks. In specific cases, like the US deal, the UK has secured somewhat more advantageous terms for its exporters. The EU approach is more collective and may prioritise broader regulatory alignment and standards, whereas the UK may accept more concessions or different standards to achieve immediate bilateral tariff reductions.
Brexit also opens up opportunities for the UK to foster trade partnerships with fast-growing regions and Commonwealth countries, aligning with a "Global Britain" strategy aimed at economic growth outside the EU. This contrasts with the EU's multilateral trading system, which emphasises maintaining common rules and protections.
Looking ahead, the UK's independent trade policy should be utilised to build on existing trading partnerships and develop new relationships with East Asian economies, as suggested in the Policy Exchange report. The UK has already demonstrated its prowess in this area, with the Comprehensive Economic Partnership Agreement (CEPA) with Japan being more substantial than the previous Economic Partnership Agreement (EPA) due to negotiations between two nations, rather than 28 EU member states.
In summary, the UK's independent trade policy post-Brexit offers benefits in tariff savings and trade deal flexibility, as illustrated by agreements with India and the US, and allows for targeting new partners globally. This approach contrasts with the EU's collective, regulatory-focused trade approach, providing the UK with both opportunities and challenges in securing advantageous trade terms.
Politics and general news are abuzz with discussions about the UK's independent trade policy, particularly the savings estimated to be up to £400 million annually for British businesses through the free trade agreement with India. Additionally, the framework deal with the US is another significant development in this new era for trade relations, showcasing the UK's capacity to forge new trade relationships independently and reap benefits.
