As Britain's Home Secretary (Minister of Interior) Theresa May emerges today as the successor to David Cameron as the country's next Prime Minister, one of her leading supporters in Parliament has called for swift action to be taken to negotiate Free Trade Agreements with Britain's main trading partners outside the European Union, including the United Arab Emirates.
May, Home Secretary since 2010, will take over from Cameron, who resigned after the British vote last month to leave the EU. Andrea Leadsom, the only other remaining candidate in the governing Conservative party's internal election to select the new leader, withdrew from the contest earlier today.
In an article on the 'Conservative Home' website this morning, David Davis, a close adviser to May who is predicted by many observers to be offered an important post in her Cabinet, outlined a series of economic initiatives that, in his view, need to be taken to prepare Britain for life outside the EU. Key amongst these, he suggested, is the rapid negotiation of Free Trade Agreements with Britain's major international trading partners.
The British economy, he said, needs to move towards "a more export-led growth strategy, based on higher productivity employment. Fortunately, this will prove eminently possible as a part of a Brexit-based economic strategy. Indeed, far from being the risky option that many have claimed, Brexit gives us many tools to deal with the very serious economic challenges that the country will face in the coming decades."
Under the terms of Britain's membership of the European Union, Davis noted, all such Free Trade Agreements can only be negotiated by the EU as a whole.
"Leaving the EU gives us back control of our trade policy, and gives us the opportunity to maximise returns from free trade," Davis wrote.
"Because any deals currently settled are obtained by finding a 28 nation compromise, the EU is clumsy at negotiating free trade deals. That is why we currently only have trade deals with two of our top ten non-EU trading partners.
“This is incredibly important to us, as about 60 per cent of our trade is with the non-EU world. In fact, we sell as much to non-EU countries with which we have no trade agreements as we do to the EU."
Davis said that a first objective for the new Government should be enter into negotiations quickly to prepare for Free Trade Agreements to come into force as soon as Britain formally leaves the European Union.
Noting that positive statements about such future agreements have already come from countries like the United States, Australia, China and India, Davis went on to say that: "Single countries, with the ability to be flexible and focussed, negotiate trade deals far more quickly than large trade blocs. For example, South Korea negotiated a deal with the US in a single year, and with India, which is notoriously difficult, within three years. Chile was even faster, negotiating trade deals with China, Australia and Canada in under a year."
In contrast, he said, the EU can take over six years to conclude trade deals, " and, without the often conflicting requirements of 28 different countries to consider, deals negotiated by single countries tend to be broader and have more favourable terms on matters that are important to us, such as services."
Davis predicted that the new Prime Minister would, very quickly, "trigger a large round of global trade deals with all our most favoured trade partners. I would expect that the negotiation phase of most of them to be concluded within between 12 and 24 months."
It is likely to take up to two years to complete negotiations between Britain and the rest of the EU on the terms of any future agreement on trade and other topics. Before the expiry of that period, Davis said, "we can negotiate a free trade area massively larger than the EU.
Trade deals with the US and China alone will give us a trade area almost twice the size of the EU, and of course we will also be seeking deals with Hong Kong, Canada, Australia, India, Japan, the UAE, Indonesia – and many others."
Any such agreements would only come into effect at the time that Britain leaves the EU, "but they will be fully negotiated and therefore understood in detail well before then," Davis said.
"That means that foreign direct investment by companies keen to take advantage of these deals will grow in the next two years."