The Labour Party Conference continues to dominate trade headlines, as prime minister Andy Burnham prepares to deliver his conference keynote, which could address the UK-EU relationship.
Business and trade secretary Jonathan Reynolds also discussed the nuanced of the trade relationship during a Politico talk.
First though, there’s insight from the Chartered Institute’s conference panel: Beyond the Border: Revitalising the UK-EU trading partnership. Held yesterday (28 September), speakers addressed the need to reduce trade friction, support SMEs and what EU alignment could look like.
EU-UK trade challenges
Dr Balazs Murakozy, a senior economics lecturer at the University of Liverpool Management School, noted that a lot of post-Brexit trade challenges have fallen disproportionately on smaller businesses.
Large businesses have been largely unaffected, he told the panel audience, but EU-UK trade is down 15% for medium-sized firms.
Chartered Institute director general Marco Forgione echoed this, noting that new rules and regulations, plus the associated paperwork, can be prohibitive for SMEs, which make up 99.4% of UK businesses.
Those considering trading with the EU often turn away, because it seemed “incredibly difficult”, he added.
Managing director of woodworking machinery company JJ Smith, Rachael Baker, cited the need for engineers travelling to Ireland to submit paperwork on every tool in their van, and said changes need to go beyond trade regulations to minimise friction.
Ways forward
Asked what should be done to make trade easier, several panelists praised the Single Trade Window – the UK government’s answer to a single portal through which all customs documentation could be submitted.
The project ended in its current form last year, with industry consultations ongoing as to what a new iteration of the project could look like.
Several panelists, including Baker and Liverpool City Alderman Gary Millar, said that a UK return to the EU would be ideal.
'Tread carefully'
Forgione made the caveat that while EU dynamic alignment enhances trade with our closest neighbour, it disadvantages many UK businesses trading with the rest of the world, such as those trading with India, the Gulf Cooperation Council or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
He concluded that it’s a “difficult tightrope” for negotiators to navigate.
It was also noted that in order for the UK to gain concessions for the EU’s ‘Made in Europe’ domestic procurement drive, it would likely mean being more open to EU youth mobility, an element of ‘reset’ negotiations that the government has sought to downplay.
Burnham on Brexit
That panel took place ahead of Burnham’s conference speech, which has been speculated to include significant content on the UK-EU relationship.
Politico’s Morning Trade Newsletter reports the divergent views of many senior Labour figures on the issue, noting Stella Creasy, former shadow minister and chair of Labour Movement for Europe, urged Burnham to drop the red lines around a customs union and rejoining the single market.
The party’s deputy leader, Lucy Powell, said that going beyond these red lines was “not possible”.
Reynolds on EU
Speaking at the ‘Politico Pub’ on Sunday (27 September), trade chief Reynolds expressed an interest in compromising on key ‘Made in Europe’ challenges.
Following EU officials request that the UK align with Brussels by applying tariffs to Chinese auto imports, Reynolds said this was “on the table” for Chinese electric vehicles. He added that this could pave the way for UK exemptions under ‘Made in Europe’.
However, on the broader ‘reset’ issues he also stood by the ‘red lines’ on a joint customs union or the UK rejoining the EU single market, touting the benefits of remaining an autonomous trading partner, and citing recent South Korea trade cooperation as an example of what can be achieved independently.
Elsewhere in the headlines
- The BBC reports that the retaliatory US trade ban on Canadian alcohol, dairy and motorcycles comes into effect today, as trade talks between the neighbours remains stalled
- The Office for Financial Sanctions Implementation has announced an update to its General Licence, incorporating new Iran sanctions
Yesterday in trade
- The US and China agreed a US$60bn low-tariff regime on non-sensitive goods following Chinese President Xi Jinping’s trip to the US
- We previewed activity at the Labour Party Conference in Liverpool
You can read those stories here.
