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UK After Brexit: UK-China Free Trade Deals Talks

  • July 24, 2016
  • By Rajesh Namase
  • 0

UK-China free trade deals are under way. Many wonder about the future of UK after Brexit. UK – China free trade deal talks have been taking place recently. The UK and China appear to be keen on a free trade deal that will enable Chinese businesses and banks to have greater access to the UK economy. Chancellor of the Exchequer, Phillip Hammond, feels it time to explore worldwide trading opportunities and commercial agreements, including the world’s fastest growing economy, China.

China is larger than Europe, and it doesn’t take much of a stretch of the imagination to conclude that good economic and trading relations with China will go a long way to allay the fears of those opposed to Brexit. One day the term ‘Brexit’ will be studied by history students. Now, however, it seems to come up every time the UK looks outside the EU for mutually beneficial trade agreements.

UK-China Free Trade Deals

Hammond believes that any economic shock arising from the British population’s decision to leave the EU will be temporary. Never forget that Brexit was not a government initiative. The referendum was agreed by all major political parties, and the British citizens decided that the UK should leave and run their own country.

The US is not the friend it once was after Obama’s negative comment post Brexit. Why should Americans interfere in British politics – they have enough issues of their own in that area right now!

Chinese Investment in UK

China already invests in the UK. In fact it is one of the largest investors in the UK in the world. Hammond’s strategy is a short-term one to minimize the economic impact of the country leaving the EU, and maximize inward investment for long term growth. There are few reasons why this cannot be achieved, even though, as Hammond admits, countries worldwide were disappointed with the result of the referendum.

Most people voted on the basis of Britain’s ownership of their own country, believing that fiscal and social control was being increasingly held by the European parliament rather than their own.  Brexit was a close-run fight, and many dislike the term. Britain has not yet exiting the European Union, and there are still many discussions to be had before the extent of the separation is decided.

UK Seeking Free Trade Agreement

Meantime, the UK is seeking new trading partners; particularly those willing to agree to a free trade agreement. That is one without import or export tariffs, or quotas on goods and commodities traded between partners to the agreement. Sabres frequently rattle, but ultimately economics win the argument. It is unlikely the US would want to sever trading relationships with the UK, but a deal with China would put Britain in a stronger position in future negotiations.

It has been reported in the Chinese media that the Chinese Minister of Commerce Is prepared to do a free trade deal with the UK.  Mr. Hammond says Britain feels likewise. China is the second largest economy in the world. However, this would likely open the door for cheap Chinese goods to enter the UK more easily – and why not many Brits may ask!

 UK After Brexit: Chinese Free Trade Deals

Before the USA and the EU take a belligerent stance against the UK, they should consider the implications. A Britain that is trading freely with China, and likely many other countries such as Australia (also seeking a free trade agreement,) will be in a strong position. The UK might not suffer as much as the US or the EU would were reciprocal trade agreements to be terminated. That ia why Britain believes that UK-China free trade deals are so important.

In return for an open market for Chinese goods in the UK, China would open its country up for UK commercial interests such as banks, insurance and standard and luxury UK goods. Not only would the UK then have an important source of income from exports, but it would also feel less impact from a reduction of US and EU imports.

UK-China Free Trade Deals – and Others

No doubt, much of this would have been discussed at the recent G20 strategic meeting in Shanghai. Those European and North American countries that are threatening the UK with all sorts of issues because of the Brexit vote should consider this. By trading with China, Australia and perhaps many other British Commonwealth countries without barriers, the UK may have the upper hand in trade deals with their previous allies.

The British public has made its feelings known about the EU – although it was a close vote. UK-China free trade deals are good, and what will transpire next is the ability of the UK to close free trade deals with other willing countries.  Their association with the Commonwealth might still be significant, and let’s face it, the UK is still the world’s 5th biggest economy –  and not to be ignored!

About Rajesh Namase

Rajesh Namase is a technology enthusiast, online marketer and SEO. He specializes in online marketing (SEO, SEM, Social Media, Content Markting, Email Marketing). Apart from that, he loves to blog about technology on TechLila.