US 'doesn't want to restart trade negotiations' says Trevelyan
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The UK recently completed the first round of its trade negotiations with Mexico over a deal set to boost the £4billion trading relationship between the two countries and open up a market which is estimated to reach almost 150 million by 2035. The Government says its Mexico 2.0 deal will transform the UK’s relationship with the world’s 16 biggest economies with a new Free Trade Deal (FTA) fit for a digital age and supporting hi-tech jobs, future industries and growth.
Marco Forgione, Director General of The Institute of Export & International Trade, told Express.co.uk there are great opportunities to expand trade between the two countries.
He said: “There’s massive market potential. Mexico has all the indicators of a really booming economic market. The UK is in a prime position to agree a really superb trade agreement.”
Mr Forgione continued: “There is an immediate benefit in encouraging greater trade between Mexico and the UK. Whatever people’s views historically of Mexico are, it is an incredibly dynamic and progressive economy with a high-skilled, developing labour force, particularly in high-value manufacturing. They are a significantly growing economy. By 2050 the expectation is it will be the fifth largest economy in the world.
“They have a booming middle class in Mexico. There are massive opportunities to expand [trade]. It’s also another key stepping stone on accession to CPTTP.”
The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) is a trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Automotive, aerospace, pharmaceuticals, food and drink are key industries in Mexico.
Fintech, finance and education sectors could also provide opportunities for British businesses.
Mr Forgione said: “The Mexican economy is diverse and growing and moving up the value and supply chains in some key, leading sectors. If we’re looking at diversification of supply routes and supply chains for UK businesses it’s a fantastic addition.
“The challenge the Government faces, not just on this Free Trade Agreement which is an enhancement of the continuity agreement, but others is how we get businesses utilising the agreements that have been penned.”
He explained efforts need to be ramped up so small and medium-sized enterprises (SMEs) are encouraged and supported to take advantage of Britain’s trade deals.
Mr Forgione called for chapters on SMEs to be written into agreements with Government to do more to support efforts to provide advice and guidance.
The Government says a modern, enhanced agreement with Mexico would aim to remove barriers and bureaucracy for small businesses as part of efforts to help them grow via exports.
Mexico is the top market for British whisky imports in Latin America. The UK also exports power machinery, road vehicles, medical and pharma products on top of services.
Mr Forgione said the new deal could offer a tremendous opportunity around the e-commerce industry with Mexico’s not as developed as the UK’s.
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He said: “There’s a tremendous opportunity for UK businesses to go and help grow e-commerce provision in Mexico.
“There are technologies, there are services around that, which would be an immediate, potential growth market.”
He identified areas around standards, movement of people, sanitary and phytosanitary goods, mutual recognition and data sharing as potential challenges in the negotiations.
Biosecurity on goods could be the biggest challenge with Britain’s developing standards in this area post Brexit needing to be reflected in a new FTA with Mexico.
Issues around digital standards might also prove tricky with a Bill going through the UK parliament over digital trade documentation.
Those requirements would also need to be reflected in the UK-Mexico FTA. Data access would also need to be enshrined in the new FTA.
Use of chemicals in production and pesticides could also be key areas for discussion.
Mr Forgione said: “What you want is within this [FTA] and future [FTAs] is that these are penned in a spirit of flexibility and collaboration because, particularly around technology and methods of working, we have no sense of what those processes, procedures and technologies are going to be in 10 years’ time.”
Asked if immigration will be a major issue, Mr Forgione said he saw no immediate demand for low-skilled workers to come to the UK.
He said: “The reality is there is a significant number of high-skilled, really capable business leaders who we would want to encourage to come and help us and grow businesses in the UK.”
The Institute, which was founded in 1935, issues monthly and quarterly trade reports, with evidence of a consistent decline in the number of UK businesses exporting.
Small and medium-size enterprises have seen the biggest falls, according to the Institute.
Mr Forgione said: “It’s impossible to tell whether it’s Brexit, or the global meltdown in logistics, whether it’s the cost-of-living crisis or inflation.
“It’s not just trade into the EU, it’s global trade.”
He argued countries must simplify the methods for trade to take place and exports to grow.
Mr Forgione said: “If we can exploit the changes the Government is putting through with regard to digital trade documentation, support that with a digital trade corridor between Mexico and the UK, we are really going to start sparking to life trade between [the UK and Mexico].”
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