Andrew Bailey, the Bank of England governor, has called for the UK to “rebuild” its trading relationship with the European Union, urging that everything possible be done to strengthen long-term trade ties.
His comments follow this week’s UK-US trade deal, which Bailey hopes will be the first of many steps toward easing global trade tensions.
In an interview with the BBC, Bailey described reversing the decline in UK-EU trade since Brexit as “beneficial,” noting the importance of a closer relationship with the bloc.
“It would be beneficial. Having a more open economy to trade with the European Union. Because there has been a fall-off in goods trade with the EU over recent years,” he said.
The governor stressed the EU’s significance as the UK’s largest trading partner. “It is important we do everything we can to ensure that whatever decisions are taken on the Brexit front do not damage the long-term trade position. So I hope that we can use this to start to rebuild that relationship,” he added.
Bailey also expressed optimism about the broader implications of the UK-US agreement, suggesting it could help restore confidence in the global trading system.
“It demonstrates that trade deals are important. Trade deals can be done, and the trade is important…honestly, it seems an unpromising landscape at times. But I hope that we can use these deals to rebuild the world trading system,” he said.
The UK government is currently in discussions with the EU ahead of a summit later this month, aiming to reset its trade and security relationship with Europe.
According to BBC economics editor Faisal Islam, the key diplomatic win with the UK/US trade deal is that it leaves the UK open to do a full EU deal on the likes of food standards.
“By maintaining UK food standards and not, for example, accepting hormone treated beef or chlorinated chicken, a “full fat” food and farm export deal with the EU, similar to Switzerland’s, is now clearly on the cards in the next fortnight. This could slash post Brexit red tape for key exporters both ways,” said Islam.
“Then you have an overall picture of a growing economy, with good trade relations with the US, EU, India and soon the Gulf too, with rates being cut,” he added. By Gabrielle Pickard-Whitehead, Left Foot Forward
