Consulting on a new trading future for the UK

  • techUK techUK
    Thursday26Jul 2018
    News

    As the Government launches four consultations on post-Brexit trade deals, Thomas Goldsmith looks at what they might mean for the UK tech sector.

This week the Department for International Trade has launched four new consultations on post-Brexit trade deals. These include separate consultations on the possibility of negotiating new free trade agreements (FTAs) with the United States, Australia and New Zealand, as well as one on the possibility of joining the plurilateral trade agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

For UK tech companies, deals with these countries could bring major benefits. The US is the main destination for exports for many tech companies, and tech investment flows are significant both ways. British affiliates in the information sector already account for 28 per cent of all foreign affiliates’ employment in the US, with the figure 24 per cent for the similarly digital heavy profession, scientific & technical services sector.

The EU has recently started trade negotiations with both Australia and New Zealand, as I wrote about in an insight, Doing digital Down Under, but these won’t be concluded before the UK leaves the EU. The UK could benefit from agreements with both though. The UK’s largest trade surplus with New Zealand is in telecoms, computers and IT, and with Australia, the UK Government recently concluded a new ‘FinTech Bridge’ to help cutting-edge firms expand in both markets.

However, these examples highlight how easy it already is to do business with all three markets. They are mostly pro-trade and open markets (recent US actions aside) and the actual hurdles for UK tech businesses are minimal. While barriers certainly do exist, these can be ones that are difficult even for an FTA to address, such as problems around different regulatory structures between States within the US. For example, the US does not have a federal Privacy Law, relying instead on different requirements per state.

The prospect of joining CPTPP is an interesting one, especially as its provisions on digital trade are some of the most advanced in any trade agreement. The advantages of being part of a major bloc could be significant, but some CPTPP provisions could be at odds with areas the sector would like to stay aligned with the EU. One example where this could be the case is around CPTPP’s provisions for regulatory coherence which differ from the EU’s precautionary principle.

If all goes to plan, a perhaps wishful ask as our report Dealing with the Deals makes clear, then the UK would have bilateral deals with eight of the eleven signatories to CPTPP (either through rolling over existing EU deals, or through the new negations with Australia and New Zealand). Given that, opportunities for additional improved market access are potentially limited and would seem to not be worth prioritising over continued alignment with the EU. techUK has been clear that it is crucial to see what the final outcome of the negotiations on the future UK-EU relationship is before a real judgement can be made on the tradeoffs involved.

Nevertheless, these consultations are an important step towards the UK’s post-Brexit trade policy and will inform the Government’s approach to their first bilateral negotiations. It is essential for the UK’s economy that future trade agreements provide a good deal for tech. techUK will be working with its members to respond to these consultations and to make sure the sector’s views and priorities are considered when negotiating these potential deals.

If you would like to feed into techUK’s responses, please contact thomas.goldsmith@techuk.org.

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