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A Winning Hand!

Brexit has been the unsung story of the election campaign as the UK enters the closing phase on Brexit’s eight anniversary. In this country the promise is of orderly change. stable government and economic growth, but across the Channel the EU grapples with the rejection by millions of EU voters of the status quo. David Collins explains how the opportunities for post Brexit Britain can be seized and charts the progress of its independent global trade.  Not only has trade with the EU grown, but independent global trade deals will bring benefits to the UK economy and a winning hand to the new government. 

The United Kingdom’s decision to leave the European Union has been a topic of intense debate since the 2016 referendum. While much of the public discourse, especially within mainstream media, has emphasized challenges, there have been significant potential benefits to the UK’s trade landscape that have often been overlooked. Brexit has positioned the UK to pursue a more independent and potentially advantageous trade policy.

Leaving the EU has given the UK the freedom to negotiate bespoke trade deals tailored to its specific economic needs and strengths. As an EU member, the UK was bound by collective agreements that had to balance the interests of 28 diverse economies. Now, the UK can prioritize sectors where it has a competitive advantage, such as financial services, creative industries, and high-tech manufacturing. Many will recall how experts insisted that the UK would never be able to negotiate trade deals with third countries once it left the EU. Yet, the UK has been quite successful in securing new trade agreements. As of 2024, it has signed trade deals with over 70 countries, including major economies like Japan, Australia, and New Zealand. These deals often go beyond simply replicating EU arrangements, incorporating provisions that are more favourable to UK interests.

Brexit has allowed the UK to embrace a ‘Global Britain’ strategy (a phrase that still provokes a sneer among many), looking beyond slow-growth Europe to forge stronger economic ties with dynamic economies in Asia, Africa, and the Americas. This approach aims to position the UK as a champion of free trade on the world stage. The UK’s accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a prime example of Global Britain in action. Membership in this 11-nation trade bloc gives UK businesses preferential access to markets accounting for around 15 per cent of global GDP, opening up new opportunities for export and investment. Strangely, many resent these benefits because acceding to the CPTPP has rendered the notion of re-joining the EU virtually impossible.

Leaving the EU has given the UK more control over its regulatory environment. While maintaining high standards, the UK can now tailor laws to better suit its economy and potentially reduce bureaucratic burdens on businesses. This flexibility could be particularly beneficial in emerging sectors like fintech, where the UK aims to maintain global leadership. The ability to diverge from EU regulations also allows the UK to be more agile in responding to global economic trends and technological advancements, potentially giving UK businesses a competitive edge in rapidly evolving industries. For example, the UK’s principles-based approach to AI, in contrast to the EU’s rigid innovation-stifling stance, will pay dividends in the future. There is though further to go. Unbridling itself from EU regulation was perhaps the Brexit benefit which has been the most neglected – there appears to be an entrenched mindset that by default the UK must remain aligned with the EU on all fronts.

Brexit allows the UK to prioritize services in its trade negotiations, potentially opening up new markets for its world-class financial, legal, and creative services sectors. Services account for around 80% of the UK economy, yet many international trade agreements, including those negotiated by the EU, have traditionally focused more on goods. The UK-Japan Comprehensive Economic Partnership Agreement, for instance, includes more comprehensive provisions for digital and financial services than the EU-Japan deal, reflecting the UK’s strengths in these areas. Negotiated under duress after years of post-referendum foot-dragging, the Trade and Cooperation Agreement (TCA) with the EU unfortunately prioritized goods to the EU’s advantage. Hopefully this failing might be redressed in the coming years. Trade deals can be mutually beneficially as the deal with fellow G7 member Japan shows.

Leaving the EU’s Common Agricultural Policy and Common Fisheries Policy gives the UK more control over these important sectors. Fisheries in particular had been plundered in the North Sea by European vessels. The UK can now implement policies that better suit its unique geographical and economic circumstances, potentially leading to more efficient and sustainable practices in farming and fishing. Moreover, free not to impose the EU’s heavy tariffs on many agricultural products (designed to protect these sectors on the continent from global competition), the UK can now source cheaper fruits and vegetables from the Middle East, Africa, and Latin America, helping to lower costs for consumers.

Brexit has provided an opportunity for the UK to strengthen trade relationships with Commonwealth countries, leveraging historical ties and shared legal systems. Agreements with Australia and New Zealand, for example, are seen as stepping stones to deeper engagement with the fast-growing Indo-Pacific region. An upgrade of the UK-Canada FTA along with a new FTA with India are anticipated in the near future.

As an independent trading nation with its own seat at the World Trade Organization (WTO), the UK has the opportunity to pioneer new approaches to trade policy. This could include leading on digital trade rules (seen for example in the UK-Singapore Digital Economy Agreement and the WTO Joint Statement Initiative on E-Commerce), championing green trade to support climate goals, or developing innovative ways to support small and medium-sized enterprises in international trade.

Realizing these benefits requires navigating significant challenges. Adjusting to new trading relationships, particularly with the EU, has involved some short-term disruptions. But these have been far less than claimed during the campaign’s the notorious Project Fear that went so far wrong as to predict food shortages and riots. Despite the downturn in global trade caused by Covid, from which few have been immune, trade with the EU is broadly consistent with historic trends. Imports from the EU have actually increased. The UK’s standing in the world has not diminished – it remains the second largest destination of foreign direct investment in the world.

The success of the UK’s independent trade policy will depend on its ability to leverage its strengths, continue to negotiate favourable deals, and help businesses seize new opportunities in global markets. While Brexit has undoubtedly presented challenges, notably in relation to the integration of Northern Ireland into the UK economy, it has also opened up new avenues for the UK to pursue a more advantageous trade policy. By embracing its newfound flexibility and focusing on its economic strengths, the UK has the potential to forge a prosperous path as an independent trading nation.

Professor David Collins

David Collins is Professor of International Economic Law at City, University of London and a member of Politeia's Academic Advisory Council. A WTO specialist, he previously practised commercial litigation in Toronto and was a prosecutor for the Attorney General in Ontario, Canada. His publications include The Public International Law of Trade in Legal Services (Cambridge, 2019), An Introduction to International Investment Law (Cambridge, 2016). Twitter: @davidcollinslaw.

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