Britain’s post-Brexit trade plan could be a missed opportunity

The economic argument for free trade is politically more important than ever. A drift towards the use of tariffs and other protectionist measures has increased in G20 countries since the global financial crisis and there are signs that the protectionist trend could accelerate in the wake of Covid-19. This at a time when a global economic recovery will urgently need the boost that trade offers.

One of the great opportunities of Brexit is that the UK can lead the world, with countries like Australia, in championing free trade. The UK has made clear that signing free trade agreements is a top priority as it leaves the EU’s customs union. Negotiations with the United States are now under way, and Japan, Australia and New Zealand are earmarked as the next targets. At the same time, the UK is seeking to reach an agreement on the future UK-EU trade relationship.

But UK politicians and policymakers must not lose sight of the fact that the biggest economic benefit of trade comes from lowering barriers into one’s own economy in order to reduce costs for consumers, encouraging competition and boosting domestic productivity.