30th November 2012 London, UK
The Rolling Stones may not have been foremost in the minds of Ministers as they agreed to open trade talks between the EU and Japan yesterday, but if the negotiations are successful, they could be among those that benefit.
The decision to open negotiations between two of the world’s largest economies was a major success story for Britain after we put the issue back on the agenda last year.
Alongside our allies, we have been at the forefront in pushing to lower trade barriers with countries outside the EU.
One in ten jobs in Europe depends on such trade, and if we manage to liberalise further, then it could add over two million jobs to European economies and 2% to Europe’s GDP.
An EU report this summer put it rather dryly when it said that: “Boosting trade is one of the few means to bolster economic growth without drawing on severely constrained public finances.”
The point is that for the UK, and indeed for the EU, trade is sustainable growth, not debt-fuelled.
Estimates are that the EU-Japan deal could benefit European economies by 0.8% GDP, creating over 400,000 jobs across the 27 member states.
And this is not the only trade deal on the table.
We are close to an ambitious deal with Canada, which could be worth £425 million a year for the UK in the short-term, and three times that in the long-term. A deal is near with Singapore, one of our major trade partners in Asia. Negotiations will soon start with Morocco and Tunisia, and we are looking for free trade agreements with the countries of south-east Asia, such as Thailand and Vietnam.
Trade talks may sound dull, but for businesses they really matter.
Sometimes it’s a question of trade tariffs that price British goods and services out of the market.
Dorset Cereals saw its sales to South Korea jump six-fold in three months this year because the EU-Korea Free Trade Agreement abolished a 45% customs tariff.
Sometimes the barriers are indirect.
With Japan, one of the issues up for negotiation is the length of copyright protection on sound recordings. How many years should bands like the Rolling Stones get royalties from their back catalogues? Across Europe, from next year, it will be 70 years. In Japan, it’s currently 50.
In Europe, we are valued as a key reformer, as a leader on free trade and as a country with links around the world. And we’re working with Trade Commissioner Karel De Gucht, who supports the trade agenda and who pushed hard for these EU-Japan talks to begin.
Last week, CBI President Sir Roger Carr said Europe is the bedrock of our international trade. This latest news bears him out.