UK must build closer economic ties with Asia, says Liz Truss

International Trade Secretary will say the UK needs to secure business with eastern growth markets

UK International Trade Secretary Liz Truss arrives at Downing Street for for a Cabinet meeting. Getty

As global trade moves East, the UK will need to “forge closer economic ties” with Asian nations, the International Trade Secretary is expected to say.

Liz Truss will use a speech on Tuesday to set out how the UK’s post-Brexit trade strategy will be increasingly about securing business with eastern growth markets including India.

The Department for International Trade’s Global Trade Outlook report, due to be published on Tuesday, has found that the “centre of global economic gravity is moving away from Europe” and towards the Indo-Pacific.

By 2030, three of the four largest economies in the world will be in the Indo-Pacific region, the report forecasts.

It says the region set to account for 56 per cent of global GDP growth and 44 per cent of global import demand growth in the next 30 years.

Global demand for British digital and financial services is expected to double in the next decade, with demand for digital services calculated to grow by 117 per cent, the department said.

“In order to seize the opportunities of the future, we need to grow trade with the fastest-growing parts of the world while turbo-charging digital and services commerce, which is exactly what we’re doing," Ms Truss said before her address to the Policy Exchange think tank.

“We are building a global network of next-generation trade deals that are advanced in services and digital trade, and forge closer economic ties with markets in East Asia and the Asia-Pacific.

“We know the demand for high-quality British goods and services exists, and is growing, therefore we need to ready British businesses for export and bolster inward investment across the country, creating new jobs, business and growth.”

In its integrated review of security and foreign policy published this year, the government outlined plans for a “tilt” in focus towards the Indo-Pacific, an approach the trade secretary wants to emulate through trade.

The Cabinet minister, according to the DIT, will say it is time to “move from defence to offence in trade” and will set out plans for targeting trade deals with the fastest-growing parts of the global economy.

The Conservative MP is planning to say “the status quo is not an option” and outline how her trade policy will open trade routes beyond Europe, with Britain in control of its trade policy and free to strike trade agreements since leaving the EU in 2020.

Officials said the UK was already making “significant headway” in building more successful trade routes with growth economies in the Indo-Pacific.

The UK has started negotiations to join one of the world’s largest free-trade areas, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – which includes the likes of Japan, Australia and Singapore – and will soon “kick-start” negotiations with India, Mexico and Canada, Whitehall officials said.

Ms Truss will encourage more businesses to sell abroad to make exporting the “norm for UK businesses”. Only one in 10 British businesses currently sells overseas.

“The path to economic revival does not lie in retreating and retrenching,” she is set to say.

Shadow trade secretary Emily Thornberry said: “Liz Truss has been in her job two years and two months, and still hasn’t delivered a single trade deal that we didn’t already have inside the EU, so it’s time she stopped making the same speech about the prospect of new trade agreements, and actually got one completed.

“Even more importantly, she has still not addressed the fundamental problem with her strategy, which is that the deals she is discussing don’t come anywhere close to making up for the losses British businesses are facing because of the holes in the Government’s deal with Europe.

“Even her top priority of accession to the Trans-Pacific Partnership is forecast by her department to deliver UK export growth of just £1.7 billion over 15 years, a third of what we exported to Luxembourg in a Covid-affected 2020.

“For that to be Liz Truss’s top priority shows a serious lack of ambition for British exports.”

Updated: September 13th 2021, 9:30 PM