Trade: A Cure for Brexit Depression

07/07/2016 09:37 | Updated 07 July 2016
Bloomberg via Getty Images

In the fortnight since we unexpectedly Brexited, I have met many depressed individuals, some to the point of complete despair. How, they wonder, will Britain ever prosper again in this brave new world?

Here I offer a small part of the solution: It's Free Trade, but not as we currently know it.

David Cameron sensibly used to insist that if you sat round the Cabinet table then it was part of your job to sell Britain abroad. You know the kind of thing. Fill a plane with business people. Fly to some far flung place. Arrive and commend the many benefits of buying British goods and services to new partners; often in the fastest developing countries in the world.

As Party Chairman, my seat around that table was actually secured as Minister Without Portfolio. And of course, without a department to manage, I ended up doing more than my share of trade negotiations and talks.

Back in 2014 I found myself chairing the grandly named Joint Economic Trade and Co-Operation (JETCO) Summit in Vietnam. On landing I was whisked off to the Vietnamese Communist Party headquarters in Hanoi. Settling into an oversized chair in the Great Hall Of The People, the Deputy Prime Minister entered and we enthusiastically discussed our deepening relationship in trade, education and financial services. We got on well. And then it dawned on me. My hosts were extremely welcoming, but could it be that my title of "Party Chairman" has quite a different connotation in Communist Vietnam?

Either way, sadly all that pomp and grandeur was completely out of kilter with that which we could actually achieve for our long-term trading relationship. For whilst I was able to negotiate away some communist customs red-tape, which was causing irritation to British exporters, the really meaty gains all fell under the remit of the European Commissioner for Trade.

Frustratingly, time and again I found myself responding that I would add the latest issue to a growing list which I would raise with the EU Commissioner on my return. Time and again, the opportunity to truly develop our own trade relationship was thwarted during that JETCO 2014 summit.

Now Vietnam enjoys growth of six to seven percent a year, so they are reaching the point where they need the kind of services that Britain specialises in - like help building their own stock market, and so on. Yet depressingly the Vietnamese/EU Free Trade Agreement has been in progress for years. And it moves at a snail's pace. Beginning back in June 2012, there are few signs that it will draw to a conclusion any year soon.

And as I travelled across South East Asia to advanced economies like Taiwan and Singapore, and developing ones like Malaysia, I discover the same lack of Free Trade Agreement in market after market. Each pointed to EU negotiations which started years ago. None of them are likely to draw to a conclusion anytime soon. If at all.

This makes no sense. Think tank Open Europe estimates that striking a series of Free Trade Agreements with South East Asian economies, as well as China, India and Japan, could boost our own GDP by as much as 0.6%. Enough to start addressing some of the negative impact of leaving the EU.

And of course, there are even bigger fish to fry globally. Amazingly, we don't for example have a Free Trade Agreement signed with a closest partner it the world - the USA.

In short, we have become a bit lazy sat within the EU trading block. With Free Trade Agreements covering just 66% of our global trade, we have fallen a long way behind the likes of Australia, Canada and Norway who have 80% of their trade covered by FTAs.

So let's accept that we are to leave the EU, but resolve to turn it to our advantage. For the sake of all those who despair for our future, it's time to look outwards and start negotiating those Free Trade Agreements. Even if we start this Autumn, I bet we can still wrap them up before a single one of those long-discussed, yet never ending 27 country EU Agreements kicks in.
Now how's that for a tonic for Brexit depression?

Grant Shapps is the Conservative MP for Welwyn Hatfield