UK Must Deepen Ties with EU to Avoid Slow Trade Growth, BCG Says
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Article content(Bloomberg) — UK trade growth is set to undershoot the global average over the next decade, according to a new report from Boston Consulting Group which laid bare the importance of the European Union to Britain’s efforts to support exporters.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentTrade between the UK and its partners is expected to grow by 2.3% annually, compared to the average of 2.5%, as protectionism and geopolitical tensions forge global trade splits with the formation of distinct blocs, BCG’s annual trade report found. Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentThat’s because several of the country’s most substantial partnerships are with countries that expected to see subdued growth in trade, such as the US — which is focusing on its “America first” strategy of producing for domestic customers — and China.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentThe UK could boost trade by focusing on relationships with nations that are keen to form and stick to deep trade agreements, such as the EU, Canada, Japan, Mexico and Vietnam, BCG said. An example of this was Britain’s recent accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a trade bloc with 11 other members ranging from Brunei to Canada.Article contentHowever, “we can’t escape the fact that the largest proportion of trade in the plurilaterist node is with the EU, and so the depth of the UK’s future trading relationship with the EU will have an outsize impact on UK trade prospects more widely,” said Tim Figures, partner and associate director at BCG.Article contentThe report comes days after Prime Minister Keir Starmer said he will pursue greater access to the EU’s single market, setting him up for a fight with hard-line Brexiteers who believe the UK should be focusing on trade relationships elsewhere in the world. They include Nigel Farage, leader of anti-immigration party Reform UK which is currently comfortably topping national opinion polls.Article contentArticle contentFarage has criticized Starmer for “breaking faith with his manifesto pledges on the EU” by promising to align more closely with the bloc’s rules and regulations. But BCG’s findings may act as a warning for Reform, which is keen to distance itself from its European neighbors but has so far given little detail on how it would approach matters of foreign policy or international trade if elected to power. The next general election is due by mid-2029 at the latest.Article contentForming trade deals with large economies such as the US and India was touted as a Brexit benefit, and while the UK last year reached a free trade agreement with India, securing a deep deal with the US has proved difficult due to increasing protectionism from President Donald Trump’s administration.Article contentNow its relationships with other economies could face further hurdles. “UK trade growth is expected to lag the global average as its policy of ‘triangulation’ between US, China and the EU comes under geopolitical pressure,” Figures said. “The most promising growth now lies with like-minded partners and the fast-expanding markets of the global south, but the UK will need to act quickly to adjust supply chains and rebuild momentum with its traditional trade partners if it wants to stay competitive over the next decade.”Article contentBCG only expects US trade to grow by 1.5%. But in that case, the sluggishness wouldn’t necessarily translate into weaker GDP growth as increased domestic production and consumption may offset the slower growth.Article contentTrending Posthaste: Mortgage borrowers who held out for lower rates are paying the price News RBC CEO says he's 'more excited' about Canada's growth outlook than he has been in a decade Banking Trump demands U.S. defence companies stop buybacks and dividends Investor Scotiabank let 3,000 people go late last year, CEO says Banking Canadian quantum computing company raises $180 million from investors including RBC, Telus Innovation Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Posthaste: Mortgage borrowers who held out for lower rates are paying the price News RBC CEO says he's 'more excited' about Canada's growth outlook than he has been in a decade Banking Trump demands U.S. defence companies stop buybacks and dividends Investor Scotiabank let 3,000 people go late last year, CEO says Banking Canadian quantum computing company raises $180 million from investors including RBC, Telus Innovation