Slash trade tariffs like Singapore to boost 'Global Britain', Board of Trade recommends

The UK should consider slashing trade tariffs like Singapore to spur economic growth, the Board of Trade has suggested, as it called for exports to be placed at the heart of the recovery from covid-19.

Calling for the Government to pursue trade deals with high-growth economies outside of the EU, Boris Johnson’s new group of trade advisers has recommended the UK follows the example of the Asian financial hub through the widespread removal of barriers to free trade.

Publishing its first report after being set up last year, the Board also recommends that the Government establish an “ambitious” new target for boosting exports by the end of the decade.

Whitehall sources last night suggested it would go beyond George Osborne’s previous goal of hitting £1 trillion in exports by 2020, despite the significant decline in global trade caused by the pandemic.

To help business internationalise, the advisers propose new export incentives which are likely to mirror those available in the US, ranging from tax breaks to Government support for small and medium sized firms.

Its recommendations are said to have been heavily influenced by Tony Abbott, the former Australian prime minister, who was among the senior experts appointed to the Board in September.

The report is also underpinned by research from the Fraser of Allander Institute, which finds that 6.5 million UK jobs are supported by exports, and that wages in these roles are 7 per cent higher than the national median.

The Office for National Statistics also estimates that goods exporting businesses are 21 per cent more productive than those who do not.

Other proposals include signing “ground breaking” new trade agreements with India, the Gulf states and the Mercosur group of Latin American countries, along with finalising deals currently being negotiated with the US, Australia and New Zealand by 2022.

The report identifies Asia and the Indo-Pacific as the key trade frontier, highlighting that two thirds of the world’s 5.4bn middle class consumers will be based in Asia within a decade.

It highlights Scotch whisky, one of Britain’s most valuable food and drink exports, as a product that would especially benefit from greater trade ties with Asia.

It comes ahead of Mr Johnson’s trip to India next month, which Government sources say is likely to herald a series of new export announcements, as well as potentially setting out the timetable for commencing trade deal negotiations.

With Mr Johnson and International Trade Secretary Liz Truss leading calls internationally to lower trade barriers, the Board points to the “liberalising approach” of Singapore, Australia and New Zealand as a blueprint for post-Brexit Britain.

Noting that all three “have benefitted from faster economic growth, higher incomes, and more jobs” since opening up their economies, it points out that 96 per cent of all Singapore’s imports are free of duty.

Commenting on the recommendations last night, Ms Truss said: “This report shows how Global Britain will deliver jobs and growth across the UK, particularly in areas like the Blue Wall.

“Export-led jobs are more productive and higher paying, but currently too few businesses export and our economy is not international enough.

“This potential can be liberated through more trade deals, boosting our role as global hub for digital and services trade, and by pursuing policies that drive an exports-led recovery.

“The opportunity we have as an independent trading nation is huge. Today’s report outlines how we can do things differently and capitalise on defining trends like the emergence of Asia’s middle classes and rapid growth in the Indo-Pacific.”