Now the UK is leaving the EU, Boris Johnson's government can start planning a serious trade strategy for life after Brexit. So far the focus has been on a UK/US free trade agreement. But before that, the initial challenge for Britain will be to establish a rational set of priorities.
First, the government must ask what resources is it prepared to commit to trade policy? Second, it needs to establish what trade agreements would be most beneficial to the UK economy. After all, there’s no point in giving priority to a laborious trade negotiation with, say, Burkina Faso, if the benefits of that agreement would be very limited.
And third, how difficult would it be to conclude a free trade agreement with those priority countries? Are those countries ready to open up their markets on a reciprocal basis with the UK? Talk of a free trade agreement with India may meet several criteria but it would be difficult to negotiate. India is not a free trade economy.
Trade negotiations should be a major priority for the government because good agreements have the potential to turbocharge Britain's economy. British exporters will have better access to markets, building a stronger export culture throughout the economy. Imports will be cheaper and more accessible, lifting domestic living standards as a result. And finally, open trade drives micro-economic reform, contributing to increasing the productivity of British firms.
For those reasons, the Department for International Trade needs to be well resourced and led by a senior member of the Cabinet. As far as prioritising negotiations, the starting point must, of course, be the free trade agreement with the EU. That agreement must not deny the UK the opportunity to make high quality agreements with other countries.
Logically, an FTA with the United States should be the next priority. It is the UK’s largest individual trading partner already and has a government keen to conclude an agreement and to do it quickly.
There’s no doubt the next priorities should be in Asia. The biggest gains from a trade agreement would come from China, Japan, South Korea and India. Agreements with Canada, Australia and New Zealand would be good for investment in particular too.
But not all these countries would be easy partners. India does not share the same free trade instincts as Australia and New Zealand and nor is China the easiest partner to negotiate with. Issues such as defining China as a market economy and access to the UK by firms such as Huawei would be a problem.
In principle, it would be best to pick low hanging fruit and prioritise countries like Canada and Japan, which already have trade agreements with the EU, as well as Australia, New Zealand and, of course, the United States.
With the US, the work done on the trans-Atlantic US-EU trade agreement, known as TTIP, which was abandoned altogether by the EU this year, could form a useful starting point.
But there is a simpler way to sequence trade negotiations than this. The UK could sign on to existing plurilateral trade agreements, thereby concluding quick market outcomes with relatively little diplomatic pain.
The most attractive of these agreements is the Comprehensive and Progressive Trans Pacific Partnership (CPTPP). The CPTPP is a high-quality free trade agreement which binds together Australia, New Zealand, Canada, Japan, Singapore, Vietnam, Mexico, Malaysia, Peru, Chile and Brunei. The Bush and Obama administrations were also keen to participate in the CPTPP – indeed the negotiations were driven initially by the Americans – but president Trump decided to withdraw. Despite the Americans backing out, the other 11 members decided to proceed with the agreement. So the CPTPP covers nearly 14 per cent of the global economy and is the third largest free trade area in the world.
The UK should move quickly to formally indicate to CPTPP members its enthusiasm to sign up. Australia and Japan have already informally pledged their support for British membership. Others are unlikely to raise major objections. The only obstacle would be an intellectually irrelevant but geographically pertinent argument that the UK is not in the Asia-Pacific region.
If all CPTPP members were willing to accept the UK, negotiations would be swift. The agreement, after all, could not be re-engineered for the UK. The condition of British entry would be the acceptance by the UK of the central features of an agreement already in force.
CPTPP is comprehensive and its application to the UK would be uncontroversial. Tariff and non-tariff barriers between the UK and the other 11 members would largely disappear. Investors would be protected from capricious policy changes by member governments which were in breach of the terms of the agreement. Environmental and labour standards would be maintained. And, yes: no-one would attack the NHS.
So to sign on to this ground-breaking agreement would give the UK access to markets which constitute 13 per cent of global GDP. To put that in context, the EU (including the UK) is 16 per cent of global GDP. What's more, most of these markets are in the fast-growing Asia-Pacific region.
If Britain is to become the global player Boris Johnson wants it to be, then it has to engage more strategically in the Asia-Pacific. The centre of global gravity is fast moving away from the North Atlantic to the Pacific and Britain needs to be part of that action.
Alexander Downer is chairman of Policy Exchange. He was Australian High Commissioner to the UK and previously Australia’s foreign minister