Thank you Harry for that kind introduction. Good afternoon ladies and gentlemen. I am delighted to be here to mark the 20th anniversary of the British American Business Chamber – a significant milestone. I’d like to thank the Business Chamber for organising this event, and the South Carolina Chamber of Commerce for sponsoring it.
After having recently returned from a visit to Canada, I am particularly pleased to be sharing the podium with the Canadian Deputy High Commissioner, Alan Kessel and pleased that Mark Richardson, Senior Trade Commissioner, is also with us this afternoon. Our countries share a long history – this year marks the 100th anniversary of the Battle of the Somme, where British and Canadian troops fought and died together. Next July we celebrate Canada’s 150th anniversary.
And here in the present day I am pleased to say that our relations with your new liberal government have got off to a good start. I was delighted to meet both Prime Minister Trudeau and Foreign Minister Dion at the Commonwealth Heads of Government Meeting in Valletta in Malta, where we discussed the role of the Commonwealth in tackling global issues.
It’s good to be back here in Birmingham. With its strong trading heritage it’s an apt choice of venue for today’s discussions. Because of course it was the crucible, as we all know, of the Industrial Revolution; it has been an industrial powerhouse and a crossroads for trade, within the UK and across the Atlantic, for centuries.
Today, however, is not about the past, it’s about the future. I understand “Forward” is Birmingham’s motto - perhaps not as catchy as South Carolina’s, but it is certainly living up to it – as is the whole Midlands region. Although it is something that Aston Villa football team seems to be ignoring this season.
It’s not for nothing that we call it “the Midlands Engine”. It is home to some of the most innovative and exciting businesses and research institutions in the country. In the last five years, its economy has grown faster than the UK average and created more than a quarter of a million new jobs.
It is now worth £222 billion a year to the British economy. If the region matches the predicted UK growth rate over the next 15 years, it could create a further 300,000 jobs and boost the national economy by £34 billion. So this is a region that is literally motoring. And it is attracting serious foreign investment on the way.
Canadian investors are at the forefront of this. I was delighted to host a lunch at Lancaster House in London in December for UK representatives of Canadian pension funds, who collectively and individually are significant investors in UK infrastructure.
The Ontario Teachers’ Plan pension fund has a 48% stake in Birmingham Airport. The Canada Pension Plan Investment Board has a 17% stake in the £1.2 billion Bullring centre and has committed to acquiring a 50% stake in the Grand Central shopping centre. And just this month it has partnered Hermes Investment Management in the £1 billion Paradise development in Birmingham, one of the largest development projects in the UK, taking a 50% stake in the £150m first phase.
Of course we also have extremely strong links with the United States. It is now 70 years since Winston Churchill coined the phrase “Special Relationship”, which we’ve heard again recently in the news and which remains a fitting description. We look forward to welcoming President Obama to the UK next month, for what is likely to be his final visit as President.
And I don’t need to remind any of you here today about the scale of UK-US trade. In 2014, 28% of all UK foreign investment projects came from the US. And the UK is the biggest foreign investor in the USA, with a stock of 241 billion pounds.
Like the Midlands, South Carolina has a strong track record of attracting foreign investment. In fact, it was recently crowned “US foreign direct investment national champion” by the Financial Times. And now South Carolina firms are investing here in the UK – with Sonoco recently expanding their presence across two sites in Bradford and Chesterfield.
This is all excellent news, but we want more. We want to encourage more investment to fuel even more growth.
Why? Because we want people and businesses to realise their full economic potential - whether they’re in Birmingham, Alabama; Birmingham Ontario; or our very own Birmingham, England. We know that international trade and investment is crucial to this. EU-US trade alone supports 13 million jobs and nearly 3.5 trillion Euros in investment, and represents nearly half of global GDP.
Staying in your home market is not the option you choose - that’s why you’re here. But you also know that doing business across borders is not always easy and that red tape and other obstacles don’t always help. We want to break down those barriers, to make markets more accessible and to release the huge potential for further trade between us.
That is why the EU, including the UK, and other like-minded economies are gradually building a global free trade network – through the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP) and other EU Free Trade Agreements.
Some of you will already be familiar with these trade deals – the acronyms make for alphabet soup but the benefits will be lasting. The EU-Canada Comprehensive Economic Trade Agreement, or CETA, is designed to help businesses, such as yours, that wish to trade in Canada and Europe. By opening markets, CETA will increase business opportunities, stimulate growth and boost jobs. From the consumer perspective, it will also bring down prices and increase choice.
We are working hard with EU colleagues to ensure CETA comes into force by early 2017. To help you prepare, UK Trade and Investment - with DLA Piper, represented here today I believe - will be publishing a report that breaks down the sector opportunities the deal offers.
We believe that the EU-US Transatlantic Trade and Investment Partnership - or TTIP - will bring many of the same benefits to businesses and consumers as we expect to see from CETA.
A successful TTIP would be the biggest bilateral trade deal in history and is expected to boost the US economy by 125 billion dollars and the UK economy by as much as 10 billion pounds each year. That means as much as 400 pounds a year for the average family in this country.
So the benefits of these agreements are clear. They offer a once in a generation opportunity to change how we do business. An opportunity to put the UK and the EU in the vanguard of that change, setting the standards for world trade for generations to come. And it’s worth noting that this opportunity may not come along again. Despite the Chinese economic slowdown, the rise of Asia is undeniable. If we don’t seize this chance now, when the EU and the US together represent the bulk of global GDP, we may see world trading standards being set instead in Chandigarh and Shanghai.
These trade deals are also proof of the multiplying effect of EU membership. It amplifies our power and influence on the world stage. It gives us greater leverage in tough negotiations, like these on free trade. It enables us to achieve more as part of the EU than we could achieve alone.
Just looking at the question purely from a trade and commerce perspective, I believe the answer on Brexit is clear. The United Kingdom will be better off in a reformed EU.
Like many, I am aware that the EU has its shortcomings. But I believe that the deal which the Prime Minister successfully negotiated is a landmark agreement which delivers tangible benefits for the UK in the four key areas of concern: economic governance, competitiveness, sovereignty and welfare/migration. The deal gives the UK special status within the EU that no arrangement outside the EU could match. It is a good deal for Britain – as the Prime Minister David Cameron has said, it is a deal that gives us “the best of both worlds”.
The deal he secured on competitiveness is of particular relevance to you here today. It is a tacit recognition by the EU of the need to reform in order to respond to the economic challenges of an increasingly inter-connected world. And this in turn underlines the case for the UK to stay in the EU and to influence reform from within.
Of course it’s also worth pointing out that, if the United Kingdom left the EU, there would be no guarantee at all of retaining access to the EU market on the same terms, or to these beneficial free trade deals. And there would be no guarantee that we would get as good a deal in a bilateral negotiation as we do as part of the EU single market.
So from a business perspective, I think it is pretty clear that Brexit would give us the worst of all worlds. We would be knocking on the door, hoping someone would let us in. Much better surely to have the key, open the door ourselves and influence from the inside all the decisions that directly affect us.
Of course whilst gripped by our current European drama, we are also following very closely the dramatic events unfolding on the other side of the Atlantic. I note that the South Carolina primary was won comprehensively by Donald Trump and Hillary Clinton – perhaps your fine state should be viewed as a bellwether?
But be that as it may, I hope you will all, as transatlantic traders, welcome the benefits of CETA and the prospect of TTIP. I hope you will all recognise the important role of the EU in securing these, and other deals, that make business easier and help keep the Midlands Engine revving. Thank you.