Shocking Revelation: A “New” Relationship with Europe Won’t Just Happen by Chance! You Won’t Believe What’s Needed Instead!

Good afternoon. This week’s Trade Unlocked conference in Birmingham brought together some 650 business and industrial leaders to discuss how to improve the UK’s sluggish trade performance.

Naturally, given that nearly half of UK exports are still destined for the EU, much of the discussion has focused on Brexit and how to mend the EU-UK trade relationship. United, but far from totality.

One thing that I have noticed is the strong interest of trade professionals in the Electronic Business Documents Bill which is making its way through Parliament and will enable current paper-based international trade to go entirely digital.

This should be distinguished from the Trade Single Window, which is due to start in 2025 and will (eventually) provide a single gateway for importers and exporters to interact with the multiple UK government agencies and departments that deal with trade matters.

The business experts I talk to are quite skeptical that one-stop shopping, while desirable in theory, will really turn anything around quickly; but around the digitization initiative there is much more enthusiasm.

It’s not just about speed, although Trade Secretary Paul Scully told the Commons it would be reduce processing times for commercial contracts from “between seven to 10 days to as little as 20 seconds”. It will also save a lot of trees in the process, which is good for the environment.

Fraud will also decrease, as digital documents created in real time are much harder to tamper with, reducing the risk of ‘ghosting’ – where criminal gangs pose as foreign buyers and distributors to extort money to the unsuspecting exporter.

As a journalist, I’m instinctively skeptical when people tell me that “x” software will save “y” billions — as it rarely seems to do — but there seems to be a fairly broad consensus that the digitization of business documents would bring significant advantages.

The most important of these, according to John Carroll, head of international and transactional banking at Santander Bank, would ultimately be the data generated by digitization which, he told a panel I chaired, could be a huge catalyst for banks wanting to serve small business customers who have traditionally struggled to access finance.

During the recent parliamentary debate, Scully said that small and medium-sized businesses could see a “13% increase” in international trade if trade was digitized. Given current trade statistics, it is certainly worth aiming for.

(The newsletter will return to this topic, so if any readers have any ideas and contributions they would be appreciated. Please reply to this email.)

Labour’s wish list to solve Brexit

Zooming out for an overview, it’s fair to say that the conference exposed many of the Brexit frustrations you’d expect – the chemical industry furious at Reach, the food and drink industry eager to reducing trade barriers, etc. etc

On the issue of UK domestic politics, I fear that – despite polls showing public acceptance of the need for a closer relationship (see chart below) – the same old pattern of expectation was clearly observable at the both the Labor Party and the Tories.

The government refused to send anyone to the conference. Indeed, Lee Anderson, the vice-chairman of the Conservative Party, went out of his way to destroy it, telling reporters that it revealed the Labor Party’s plan to “Aspire to Brussels”. Brexit is still hopelessly binary in some quarters.

Labor did show up, however, sending two senior Shadow Cabinet officials – Shadow Foreign Secretary David Lammy and Shadow International Trade Secretary Nick Thomas-Symonds – to deliver speeches. Alas they didn’t have much to say that it was new.

Both repeated a familiar wish list of Labor ambitions to ‘fix’ Brexit – a veterinary deal, reduced border bureaucracy, new visa deals, mutual recognition of professional qualifications and skills assessment bodies. compliance – but still with no real clarity on how to achieve it.

When Thomas-Symonds promised to ‘fix the holes in Boris Johnson’s Brexit deal – while respecting our clear red lines around the single market and customs union’, it was hard not to want to shout.

It is perhaps unfair to judge Labour’s Brexit policy by its public pronouncements on the subject – privately you hear the discussion is far more ambitious, but there is desperation not to rock the boat.

But as reported last week, it hardens hearts in Brussels when Labor refers to ‘holes’ in the Johnson deal that are in fact a function of the same ‘red lines’ that Labor now embraces.

In the same speech, Thomas-Symonds simultaneously bragged about Sir Keir Starmer’s pledge to make the UK the fastest growing economy in the G7, while lamenting the Office for Budget Responsibility forecasts. that UK exports would fall by 6.6% this year.

‘Something new’

Official Labor Brexit policy obviously does little to reconcile these two statements. As the Resolution Foundation Trading Up report noted last week, the value of a truly deep fix to EU-UK trade relations could be worth 1-2% of GDP – which is a long-term price that might be worth taking a lot of time. the political heat over, if anyone dared to make the arguments.

There is still time for Labor to put more flesh on their bones ahead of an election. Encouragingly, Lammy’s speech was decidedly forward-looking as far as Europe is concerned, which is the right signal to send, tiresome cakeiness aside.

Because like Mujtaba Rahman from the Eurasia group written in a note to clients this week – quoting senior German and other EU member state officials – it is possible to find receptivity in EU capitals to a deeper restart with a British government visibly determined to draw a line under the Johnson years.

“We could come to a cost-effective arrangement and think about alternatives which are much more attractive and which could also be used as models for Turkey and the UK,” a senior EU diplomat told Rahman: “This wouldn’t mean Norway or two speeds. , but something different. Something new.”

At this point, of course, it’s just pointless chatter. And that’s the kind of thinking aloud that makes European Commission officials howl in frustration, but I think it’s fair to point out – as Rahman does – that some of the opinions expressed in European capitals today hui mean that “the UK-EU relationship could be more fluid and develop faster than the pragmatic [in the shadow cabinet] to wait for”.

Labor just needs to sincerely ask itself how they access this kind of thinking. This will not happen by chance.

Brexit in numbers

This week’s chart comes from the Tony Blair Institute, which did some new opinion poll on public opinion on Brexit to coincide with the seventh anniversary of the vote to leave. The full report is out tomorrow and makes for fascinating reading.

What is striking is the clear level of agreement between leavers and stayers that the UK should move closer to the EU – 78%, in total – although that means staying out of the EU single market.

Leaving aside the fact that the public (like the Labor Party!) can be fuzzy and pasty about what it means to “come together”, it’s a pretty clear expression that at some fundamental level the public realizes that Brexit is not working as well as it could.

The poll results, based on interviews with 1,500 adults conducted by Deltapoll earlier this month, also show there is no loud clamor for Brexit deregulation or sudden upheaval among voters.

As Anton Spisak, head of policy direction at the Tony Blair Institute, observes: “It creates substantial political space to move the debate forward, from reviving old battles over the merits of Brexit, to discussing what ‘a better future relationship with the EU should result.’

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Britain after Brexit is edited by Gordon Smith. Premium subscribers can register here to receive it directly in their inbox every Thursday afternoon. Or you can purchase a Premium Membership here. Read previous editions of the newsletter here.