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6 October 2017

Liam Fox: free trade is in our national DNA

Below is a transcript of the speech by The Rt Hon Liam Fox MP, Secretary of State for International Trade, at the Launch of the Institute for Free Trade.

Good evening. One of the problems with our politics in the United Kingdom today is that everything is seen through the prism of Brexit. But long before Brexit and long before the EU, the United Kingdom was the champion of global free trade. As Boris said, it is in our national DNA.

But it’s true, that in the global trading environment today all is not healthy. The level of growth of global trade has only been running at about half the rate of growth of global GDP, which is the inverse of the normal relationship. And why? Well, the problems run deep. The OECD estimated at the end of 2010 that the G20 countries were running about 300 non-tariff barriers to trade. By the end of 2015, we were running 1200 non-tariff barriers to trade. In other words, the world’s wealthiest countries are the ones who are gradually silting up the trading system. Those who themselves have benefited most from free trade are pulling up the drawbridge behind them. And that is not only economically stupid, it is morally reprehensible.

So, we need to champion that cause of free trade once again loudly and unequivocally. And we have to adapt ourselves to a growing change in that trading landscape. If you look at the EU’s own trade website, it points out that 90 percent of global growth in the next 10-15 years will be outside Europe. That, therefore, is where we have to place the majority of our efforts.

And we have to understand that we are dealing with a very different cultural environment too. Consumers are changing the way they think about trade. Pascal Lamy wrote a very wonderful piece - that may, in itself, surprise you that I would begin a sentence like that - but he said that we are now moving from a protection view - in other words protection of producers - to precaution of consumers. And our consumers will take much more interest in the trade agreements that we make in the future and we must take much more notice of the consumers.

I sat in a trade ministers meeting in Davos - it was 52 minutes, because I had my watch on the table, before anyone said the “c” word. Nobody mentioned consumers for almost an hour, in a trade meeting. It was all about producers. We need to change that.

And we may think that the benefits of free trade are self-evident. But Dan, we need to sell our vision and our mission to a public that is often either unaware or sceptical about the benefits of free trade, and we must explain those benefits in terms that people, our consumers and our voters, actually understand. We need to say that when the UK sells its goods and services to other countries, it helps the UK economy grow stronger. We need to say that improving trade and selling more into markets overseas supports jobs at home. And we need to point out that the choice and competition that comes from trade means a greater variety of goods in our shops, helping keep prices down and helping incomes go further.

The popularity of LIDL and Aldi are free trade in action. Getting bigger widescreen TVs at lower prices from Currys is free trade in action. Getting all the fruit and vegetables we want all year round rather than depending on our own seasonal produce is free trade in action. As you said Dan, people take it for granted and we need to remind them that it doesn’t happen by accident. It’s by purposeful policy that we are able to achieve it. So, we need to make all of our arguments mean something to all our people.

And more, we have to go beyond the simple economics into that moral argument. As Boris said, we have taken a billion people out of abject poverty in the last generation. The biggest reduction we have ever seen in human history because of free trade. And we have to ensure that those benefits are carried on to the next generation and beyond.

And even beyond those arguments we’ve got to put it in a global context. Because the prosperity that comes from free trade underpins social cohesion, which itself underpins political stability and contributes to our wider security. There is a continuum between prosperity and security which we cannot choose to interrupt at any part without understanding that it will be affected in all the parts.

That is why it is so important that we have this Institute, that we have this commitment, intellectually, to the free trade agenda. We have a wonderful case to make. I’m delighted to support the Institute, and as we leave the European Union, and as we take our independent seat on the World Trade Organisation, we shall not only support the concept of global free trade, we will champion and lead the charge for global free trade. And DIT, my department, Dan, will be a very very willing partner in your great and wonderful quest. So thank you for what you’re doing, and ladies and gentlemen, can I ask you to raise a glass to the success and endurance of the Institute for Free Trade.

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