Friday , June 21 2024

Lowering trade barriers could be the boost British business needs

This article was first published here.

The Daily Star, a staple of any good newspaper stand, has launched a campaign called Your Chippy Needs You, highlighting the plight of Britain’s fish and chips industry. It quotes the National Federation of Fish Friers, which fears 1 in 2 chippies could go bust by 2025. Crisis in the chippy world comes hot on the heels of a pandemic which saw the pub industry shrink even faster than before, with an average of 51 still closing every month, according to Altus Group. The British Beer and Pub Association calls the trend “alarming but not surprising”.

A toxic cocktail of slow business during the pandemic, energy bills, increased supply costs thanks to inflation and the war in Ukraine, and, of course, high taxes are squeezing many of our beloved pubs and chippies into oblivion. Some of those things are out of our control, but politicians of all stripes seem determined to make matters worse by growing the size of the state at every turn, making it more and more difficult for businesspeople and entrepreneurs to build their own success story in the British free market.

But there is a sliver of hope. At long last, Britain has joined the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a global free trade agreement which includes some of the world’s largest economies like Japan and Canada. It took a few years, but thanks to the persistence of successive trade secretaries including Liam Fox, Liz Truss, and Kemi Badenoch, the UK has become the first ever non-founding member of the CPTPP.

Joining the CPTPP sends a strong signal that Britain is open for business and buys into the benefits of free trade. There was a risk we might have responded to successive international crises – Covid, Ukraine, inflation – by retreating into our comfort zone and aiming to become self-sufficient as a nation, importing less and cutting off trading ties with the rest of the world.

That would have been a catastrophic mistake. The best way to help British businesses thrive is to throw open the doors for trade, allowing them to buy and sell goods and services in the global marketplace, free of high tariffs, burdensome regulations, and other trade barriers. The CPTPP is leading the way in creating opportunities for free trade by building a forum in which nations are encouraged to open dialogues about lowering obstacles to trade and fostering closer economic relations.

There are countless ways a trade community like the CPTPP could help boost British business. It would be hard to find any industry which won’t benefit from more open trading opportunities with the CPTPP’s 11 other member states. The first material benefit to come to light – which was reported before Kemi Badenoch even had a chance to announce Britain joining the bloc – was the abolition of import tariffs on Malaysian palm oil.

That might just be a godsend for Britain’s struggling pub and chippy proprietors. One of the many issues putting pressure on their bank accounts is the soaring cost of vegetable oil, fuelled by the war in Ukraine (where other oils like sunflower are produced) and not helped by food inflation more broadly. They will be able to import palm oil much more cheaply thanks to the new tariff-free arrangement with CPTPP member Malaysia. Palm oil is much better for the environment than other oils, too, and its reduced cost will be a boon for consumers struggling with the cost of living crisis.

If it were not for Britain joining the CPTPP, this policy change would almost certainly have been out of reach. But thanks to the creation of an enthusiastic forum where member states share a desire to lower trade barriers, deregulate, and make life easier for companies and consumers (in contrast to the EU) both Malaysian palm oil producers and British businesses will benefit. Who knew helping get British small businesses out of a rut could be as simple as going to the pub or eating fish and chips more often?

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