Seeking to develop new business opportunities with a growing ASEAN market, David Cameron launched a trade delegation consisting of representatives from every region of the United Kingdom and is indicative of the UK’s desire to reduce its dependence on European trade.
On July 27th, British Prime Minister, David Cameron, embarked on his first trade mission since re-elected in May. The four-day tour included stops in Indonesia, Singapore, Vietnam and Malaysia. Thirty-one representatives from a diverse array of UK businesses, including insurance company Aviva and construction firm, Balfour Beatty, joined Cameron on his trip.
While the tour focused on increasing exports and forging future trade links, the Prime Minister’s office confirmed that deals worth £750 million would also be sealed during the trip.
This comes amid hopes that bilateral trade deals with South-east Asian countries will help reduce Britain’s reliance on the EU for trade. According to the Mr. Cameron, “over the next 20 years, 90 per cent of global growth is expected to come from outside Europe, and Britain must be poised to take advantage.”
In addition to bilateral trade, the Mr. Cameron also wants to jump-start negotiations between the EU and ASEAN on free trade. Cameron has stated that the UK can “open up more markets for British businesses by leveraging the power of the EU’s single market with 500 million consumers to secure bold, ambitious trade deals with these fastest, growing economies.”
The Prime Minister’s office indicated that a deal between the EU and ASEAN has the potential to benefit the UK economy by £3 billion every year. It would create one of the biggest free trade areas in the world with combined GDP of over $20 trillion.
Indonesian Credit Financing and the Northern Powerhouse
During the trip, Indonesia’s President Joko Widodo informed Mr. Cameron that he wants to encourage the UK to diversify its investments and to lower import duties for Indonesian products. Mr. Cameron stated that his government would offer £1 billion of credit financing for infrastructure projects in Indonesia, which could pave the way for the growth of £200 million worth of exports to the UK.
The Prime Minister also sought greater Indonesian cooperation in the fight against Islamic State (IS). With the world’s largest Muslim population, about 500 Indonesians are thought to have joined IS in Iraq and Syria to date. Mr. Cameron wants to offer more practical counter-terrorism cooperation in the form of aviation security and disrupting foreign fighters.
In Singapore for a business event, the Prime Minister discussed plans to establish Northern England as a global economic centre, dubbed the ‘Northern Powerhouse’. Hoping to attract overseas investment, the Prime Minister and his Business Secretary were accompanied by a delegation of 62 northern UK companies. In a separate address, the Prime Minister stated his commitment to tackling corruption and enhancing transparency in corporate governance and the property market.
Broader Vietnamese Cooperation and Tackling Corruption in Malaysia
A joint statement released during the Mr. Cameron’s visit to Vietnam recognised the great potential for broader cooperation. The two Prime Ministers confirmed that economic cooperation would continue to be a priority, and underlined their shared vision of an ambitious and comprehensive EU-Vietnam Free Trade Agreement, which would fully address both tariff and market access issues.
During the visit, leaders witnessed the signing of an agreement between Rolls-Royce and Vietnam Airlines worth £340 million. A joint statement also confirmed a deal for up to £500 million in export credits from the UK to Vietnam to fund future infrastructure projects.
Despite success in Vietnam, the Mr. Cameron’s trip to Malaysia seemed poorly timed. The country is currently experiencing its worst financial scandal in modern Malaysian history. However, this did not prevent Mr. Cameron from attending a reception for potential investors where he spoke about the UK as “open for business”.
Following demands from UK opposition leaders that the he should cancel the visit due to current corruption claims, the Prime Minister confirmed, that he would “go ahead with the visit, but that nothing should be off the table” and that he wanted to “talk about these issues including the specific ones now.”
In a one-on-one meeting with Malaysia’s Prime Minister Najib Razak, Mr. Cameron urged Mr. Razak to clean up the administration. He then met with civil society leaders campaigning for greater democracy and a free press.
Overall, the Prime Minister’s trade mission finalised a number of signed economic agreements, as well as strengthened future economic ties and enhanced security dialogue. While the EU remains Britain’s largest trading partner, it is clear the UK wants to look beyond Europe to the largely untapped potential of South-east Asia.