The benefits of Free Trade

Yesterday evening, I addressed spiritsEuropes’ Annual Trade Review alongside Australian Ambassador to the EU, Dr Mark Higgie, and Commissioner for Trade, Cecilia Malmstrom to discuss the positives of free trade and what policymakers can do to enable our SME’s in particular to increase their exports.

As the European Conservatives Coordinator for International Trade this is an issue I have been following closely for a number of years in the Parliament, championing the clear and positive benefits that agreements such as CETA and TTIP will bring.

Global trade has presented countless opportunities for nations around the world and this momentum must be kept and built on.
We as policymakers must continue to show the world that free trade brings economic growth, jobs, and increased consumer choice for all parties involved.

It is also so important that politicians showcase the power of free trade, not just to the economy as a whole but to the SME’s and to the consumers. Too often, the public believe that free trade agreements only benefit the big, multinational companies whilst the small businesses and the individual get left behind.

We have seen this view reflected in serious and clear opposition to comprehensive agreements such as CETA and TTIP. This distrust of free trade became political opposition and led to calls for less ambition and further protectionism. This is not positive and protectionism will lead to further protectionism. Whilst a number of these views are fuelled by negative myths of free trade, they show that a lot of people still need convincing.

It is the job of those who are outward facing and ambitious to dispel these myths and this is where positive lessons can be learnt from the TTIP and CETA discussions.
The negotiations of Free Trade Agreements need an effective communication strategy which makes it clear that ambitious free trade deals will directly benefit and deliver for the small business and the consumer.

This effective communication strategy should focus on two areas. The first area is ensuring the transparency of as much information as possible and making it clear that society and stakeholders of all levels are brought on board. When this doesn’t happen, it has shown to lead to a dissatisfaction with trade.

The second area is the importance of showcasing the tangible benefits to the small business and the individual. Too often there is focus on the positive statistical GDP figures that free trade agreements will bring but this does not always show the benefits in real terms. This ultimately makes it more difficult for individuals to see how free trade will directly benefit them. The focus therefore should be on the reduction in poverty, the increase in jobs and the new opportunities for trading and purchasing.

There is always an appetite to trade, and there is clear and coherent ambition from SME’s across Europe and the wider world to take advantage of the opportunities that the global marketplace presents, not just with the major established economies such as the US but also in areas such as Africa where growth increases year by year. SME’s are central to any successful trade agreement and this is what should guide policymakers.

We should therefore ensure that our SME’s not only receive the positive messages of free trade but that they are given information on how to best navigate the new markets they are seeking to trade in. It is in everyone’s interest to help our SME’s grow and see their ambition reflected into success.

There needs to be an emphasis on the reduction of tariffs and the removal of non-tariff barriers, with a focus on cutting the red tape that SME’s face. Whilst it is important that high standards are not compromised, lengthy and expensive testing requirements that might often be different in process, end up producing the identical high standards. This can represent a serious barrier for our SMEs and one that makes it more expensive and harder for them to export.

My country the UK, is one of the world’s biggest importers of wine and champagne whilst we are equally proud of the high quality and renowned gin and whiskey that we export to all corners of the globe. These industries drive many economies forward and must be given the right tools and opportunities to build on this.

It is clear the SME’s have the ambition to showcase their innovation but we must give them the right tools and information to do this. If countries around the world work together in a positive manner to bring down barriers and to open up new export markets, our industries will not disappoint us with that they can do. The enthusiasm is there and the opportunities for European spirits’ exporters is clear.