International Trade
NO SHORTAGE OF TRADE ISSUES IN N PM’S IN TRAY There is probably never an easy time to become Prime Minister. But for Liz Truss it is fair to say that with soaring inflation, a cost-of-living crisis and a potential trade war with the EU in the offing, this is a particularly challenging period to take the reins. The prospect of a fully-fledged trade dispute between the UK and the EU is growing in likelihood. The Northern Ireland Protocol Bill has completed its Commons stages and has been introduced into the House of Lords.
the EU might harden its line further but the noises coming from Ireland right now suggest constructive dialogue might begin soon.
Should the Bill become law, it would provide UK Ministers with the legal powers domestically to overwrite the NI Protocol and introduce check free, friction free movements of goods East-West and WestEast across the Irish Sea for Great Britain and Northern Ireland. Though the implementation of the new law is still many months away - the EU may respond aggressively with further actions. This may include tariffs on selected UK exports to the EU while attempts to resolve the matter are undertaken by the dispute resolution machinery in the Withdrawal Agreement and Trade and Cooperation Agreement. The British Chamber of Commerce is prioritising a negotiated solution but is advising potentially affected companies to take advice now to mitigate their exposure to new costs on exporting goods to the EU should matters worsen.
36 Thinking Business
It is still unclear how much willingness for compromise there is on the UK side (under the new PM) and from the EU. There is a danger that things could escalate, and that
intensive series of non-EU trade negotiations.
Following Liz Truss’s leadership win, Irish foreign minister Simon Coveney struck a more hopeful note.
Negotiations with India are expected to be completed in time for 24 October – and the BCC has had sight of some negotiating drafts in key areas.
He told Irish broadcaster RTE recently: "I have to say I have some cautious optimism that we will see in a few weeks' time the opening of an honest effort to try to settle some of these issues that have been outstanding for far too long”. Watch this space.
Negotiations with Canada for a bespoke trade agreement are expected to conclude by the end of the year to tie-in with UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
India and Canada
Negotiations with the Gulf Cooperation Council, Mexico and Israel will continue but may not conclude until into 2023.
Also, near the top of the in tray for the new Prime Minister, is an
Businesses must be part of the solution too by creating the right workplace conditions, for example by providing flexible working practises, training opportunities and a focus on workplace healthcare and support
Picture of Liz Truss from UK Parliament under following licence conditions: full licence, no changes have been made.
Prime Minister Truss will also be expected to deliver a key export strategy which provides a pathway to stronger export-led growth. The Office for Budget Responsibility forecast in last autumn’s Budget export growth between 8-9% this year. Trade data from the first half of this year puts UK export performance short of that growth trajectory. The BCC