#Brexit - EU take note: Britain’s suitors are lining up

In a bid to provide some much needed certainty to restless businesses and industries within its borders, the UK this week released a customs position paper detailing Britain’s position on future customs arrangements. With statements from Brexit secretary David Davis; the international trade secretary, Liam Fox; and Chancellor Philip Hammond, the fact that a position paper has been articulated at all signals a renewed unity within the British Cabinet. The Commission was not pleased, acknowledging the publication with little fanfare. Instead, the bloc appears determined to play hardball with the UK, and Eurocrats have signalled that London will not be allowed to start free-trade agreement (FTA) talks until after Brexit is completed. Similarly, the proposal to extend a customs union-like arrangement post-Brexit seems to be dead in the water.

The news was compunded by revelations that one of the main candidates for an FTA with London, the Gulf Cooperation Council (GCC), is backing down from a deal due to an ongoing spat with Qatar. With attempts at optimism floundering, is the UK on track for incalculable economic pain post-Brexit?

But critics would be wise to hold their tongues – at least for now. As David Davis has pointed out, the EU is running a £90 billion trade surplus with the UK and, even if the EU is determined to talk tough, there are very real economic imperatives that need to be taken into account during the separation. In the same vein, businesses are upgrading lobby efforts in Brussels to accelerate a deal, with Boris Johnson himself heading up a similar charm offensive with the Member States. The harsh economic reality is that smooth transition is in the interests of the bloc as much as it is for the UK.

What’s more, potential suitors are lining up – but not without specific requests. Theresa May has found a particularly willing ally in the Indian Prime Minister Narendra Modi, bolstered by a series of trade visits between the two countries over the past twelve months. As the UK moves to tackle a £13 billion trade deficit, a UK-India FTA has been valued at £2.1 billion in a recent Commonwealth report. Even so, such a deal requires a significant degree of skill and diplomacy with regards to issues of the movement of people. Any constructive negotiation between India and the UK will no doubt need to tackle immigration concerns, where restrictions on the availability of UK Tier 2 visas have led to a more than 50 percent decline in Indian international students studying in the UK since 2010. If the UK is as open to business as it claims, it will need to prove capable of true knowledge and technology transfer. Once necessary immigration concessions are made, policy makers can afford to be ambitious about the next phase of trade expansion with India.

The UK also seems set to sign a trade deal with Asia’s other giant, following repeated calls from both China and the UK to form an agreement in the near future. The 8^th UK-China Economic and Financial Dialogue held late last year was the first since the Brexit vote, with the delegation showcasing billions of pounds of investment and trade opportunities. These include the Northern Powerhouse Investment Portfolio of 13 large-scale infrastructure development projects, each worth more than £100 million, and the welcoming of Chinese investment in the £1.7 billion London Royal Albert Docks project. With the UK’s involvement in China’s ambitious “One Belt, One Road” trade and infrastructure project set to further cement its role as a global financial center, with or without the EU’s support, a Chinese-UK partnership promises dividends for decades to come.

Even the GCC remains a strong contender on Britain’s dance card, despite recent statements to the contrary. In 2015, UK exports to the GCC reached £22 billion, exceeding exports to China and more than double those to India. Furthermore, Britain’s relationships with the Gulf go deeper and are broader – London is known to many as the capital of the Arab world, and is a second home to millions of Gulf nationals. The recent diplomatic tension surrounding Qatar and its neighbouring Gulf states is unlikely to shake the long-standing, multi-billion pound relationship between the UK and the GCC; certainly not in the long run. And if there were any doubt, Saudi Arabia, the UAE, Egypt and Bahrain have assured US and European business groups that they are free to work with Doha and will not incur penalties for doing so, signalling a determination to keep the feud in the family. As the UK plans for long-term, sustained economic growth beyond its marriage to the EU, it would be premature to discard the GCC as a reliable, and lucrative, trading partner.

While the impending Brexit deal won’t be, in the words of Liam Fox, ‘the easiest thing in human history”, it won’t be nearly as impossible to turn into a victory as some are making it out to be. Defying the expectations of doomsdayers the world over, the British economy did not collapse as the sun set on the June referendum. In the same vein, as some of the world’s fastest growing economies line up to sign trade deals with the UK, it is premature to assume that May has as little leverage in the upcoming negotiations as has been made out. The next two years will be a challenging phase for negotiators, but innumerable opportunities for Britain’s future await on the other side.

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