Next government must focus on FTAs, says CBI

Global supply chains to British industry could be put at risk unless the UK succeeds in reaching more post-Brexit trade deals, the head of the nation's largest business organisation has warned.

Flags representing many countries.
Tony Danker, Director-General of the Confederation of British Industry (CBI), says that when the new government comes to power in September, it must accelerate the pursuit of new trade agreements.Since Brexit became a reality in January 2020, the UK has managed to seal only one, comprehensive 'from scratch' deal - with Australia - though several others are in the offing, most importantly with India.

Dealing with de-globalisation

In an interview with The Times, Tony Danker said the West’s shift away from countries such as Russia and China risked becoming “incredibly expensive”, as companies stopped sourcing goods from the “cheapest and most economically efficient” markets.He argued that whoever succeeds Prime Minister Boris Johnson must pursue free trade agreements (FTAs) not only to capitalise on the UK's departure from the EU, but also to cushion the blow of "de-globalisation" by prioritising imports just as much as exports.Mr Danker said there was a need to do deals with countries exporting the likes of metals, minerals and food that are becoming increasingly important to UK companies' supply chains."I understand why there are political drivers to escalate de-globalisation," he said, "but if we do them without thinking about our economic resilience, that's incredibly expensive for everybody."Although Mr Danker said that, after discussions with American officials, he was "a bit more optimistic" about a trade deal with the US, he added: "I still wouldn't bet my life savings on it." 

A deal with Mexico?

Meanwhile, Marco Forgione, Director-General of the Institute of Export & International Trade, has described a possible FTA between the UK and Mexico as offering “massive market potential”.He told the Daily Express that “the UK is in a prime position to agree a really superb trade agreement” that would open up a market whose population is estimated to grow to almost 150 million by 2035.“Whatever people’s views historically of Mexico are, it is an incredibly dynamic and progressive economy with a high-skilled, developing labour force, particularly in high-value manufacturing. It is a significantly growing economy. By 2050 the expectation is it will be the fifth largest economy in the world,” Mr Forgione said.He added that Mexico’s diverse and growing economy was moving up in importance in the supply chains of key sectors. “If we’re looking at diversification of supply routes and supply chains for UK businesses, it’s a fantastic addition,” he said.Mr Forgione also felt a deal with Mexico could boost the UK's bid to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), an 11-nation trade bloc of which Mexico is already a member along with Australia, Brunei, Canada, Chile, Japan, Malaysia, New Zealand, Peru, Singapore and Vietnam.UK Trade Secretary Anne-Marie Trevelyan has said the Government hopes to successfully conclude negotiations with the CPTPP before the end of 2022.
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