International Trade secretary Dr Liam Fox speaking to the Capital Club Dubai on his visit to the United Arab Emirates (UAE).
I would like to thank the Capital Club for inviting me back again so soon after the last time. I am delighted to be back in the Gulf so early in my role as Secretary of State for International Trade.
I have come to know the UAE very well over the course of my career, yet every time I visit, I can’t help but be awestruck by the sheer ambition, creativity and potential on show here.
Dubai alone, which 50 years ago had a population of only 40,000 people has become a truly global city – with architectural feats that I believe push the boundaries of what is imaginable as well as laying claim to being the business hub of the Middle East. I can remember my first visit in1993 when none of where we are today even existed - it would have been a large sand dune!
And situated on one of the most geo-strategic points on earth, the UAE will continue to play a further huge part in global affairs including trade, and also security and diplomacy.
Like the UK, this region has a proud trading history. Along with the Silk Road, the Gulf was an extremely important trading route for goods travelling from Asia to the Mediterranean and onto Europe. But it wasn’t just goods that were traded; the routes carried philosophy, religion and art – spreading cultural as well as economic prosperity.
It is therefore no surprise that Dubai was chosen to host the World Expo in 2020 and I hope it can forge a similar lasting legacy to that created by Britain’s own Great Exhibition back in 1851.
The theme of the World Expo is ‘Connecting minds, Creating the future’, which brings me nicely onto what I want to talk about today.
My message today is simple – that Britain is going to be open for business like never before, and we will use our new found position outside the EU to become the world’s brightest beacon and champion of open trade.
And I will give you 3 reasons why I am optimistic and confident about the future:
Trade and investment
Firstly, I want to talk about the incredible collaboration between the UK and UAE that is already taking place and how much more we can achieve together, and how we cannot allow our ties to slacken.
Last year across the Gulf, UK exports stood at over £20 billion – that’s more than to China and more than twice as much as our exports to India.
The UAE is the UK’s fourth largest market outside Europe and our exports have increased by 37% since 2009. And given our well established footprint, it’s not hard to see why.
Many of you are amongst the 100,000 UK nationals that wake up every morning and go to work here in the UAE; and we have 5,000 UK companies doing business on these shores.
But it isn’t just a one way street; the UAE is a huge investor in Britain. Abu Dhabi Sovereign Wealth Funds have committed to invest in urban regeneration in Manchester, the Manchester Graphene Engineering Innovation Centre, and have already invested over £1 billion in UK offshore wind.
One of my biggest frustrations is that people don’t appreciate that trade is a 2 way relationship – and it can be a win-win; and there can be enormous benefits to inward and outward investment over time
Giving companies the freedom to access new markets and technologies enhances both productivity and profitability, which boosts national income. The UK actually earned enough from our investments overseas over the past 10 years to offset our average trade deficit.
A more open economy means a greater 2-way flow of investment, both fuelling an increased capacity in the industrial base and paving the way to greater export potential.
Look at healthcare. Leading UK providers such as King’s College Hospital and Moorfields Eye Hospital have invested in the UAE: exporting the best that the NHS has to offer. And the UK benefits from UAE expertise too. VPS Healthcare’s investment into Ravenscourt Park Hospital in London will allow patients to benefit from advanced cancer care. That is the glorious joy of an open 2-way trading relationship – everyone can and should benefit.
I now want to turn to areas where we can strengthen our partnership and unlock some serious potential.
Let’s take finance. The UK already has a strong presence in the Dubai International Financial Centre (DIFC) with 15% of regulated financial service firms hailing from the UK. The DIFC and London’s financial centre have collaborated on regulatory frameworks and a common law for financial courts – but there is still so much more we can do.
Cass and London Business Schools should build on their existing great work to enable local UAE professionals to attain world class financial qualifications. We should continue to work together to reduce barriers to entry for both British and UAE firms. And finally, given the UK’s world leading expertise in global events – think of the magnificent 2012 Olympics and Paralympic Games as well as the 2014 Commonwealth Games – I hope the DIFC can help British firms make the 2020 World Expo the spectacle it deserves to be.
Turning to aerospace, the UK’s leading capabilities makes us the perfect partner to continue help developing UAE’s burgeoning civil aerospace sector. We are one of the 5 largest producers of jet engines in the world and every 2.5 seconds a Rolls Royce powered aircraft takes off or lands somewhere in the world.
In fact, just last year Rolls Royce signed their largest ever deal to produce engines for 50 Emirates A380s. I think I speak for the thousands of talented British engineers, when I say that this positive commercial relationship must continue.
The second reason why the UK is open for business as it possibly never has been before is because of the glorious opportunity we have to position ourselves at the centre of an increasingly interconnected world.
Now I do understand that there will be businesses and investors who are concerned at the level of change afoot.
Let me reassure you that for the moment, nothing changes. We are still members of the EU, until the formal process of exiting is completed.
And while members of the Union, the UK will continue to – as it has always done- push for further economic liberalisation across the EU.
Some have said that a vote to leave the EU was akin to the UK turning its back on free trade and towards isolationism. That could not be further from the truth. In fact it is the opposite of what is happening.
We want the EU to succeed – we just don’t want to be governed by it. And as we leave, we intend to do so in a way that ensures minimal disruption for our European partners with whom we will continue to have strong economic, political and security bonds. In many ways, we are not leaving Europe; we are re-joining the rest of the world.
In an era of globalisation we need to be open to trading with any market which is functionally similar to our own even if it is not geographically proximate. We do not need to be tied to the 20th century’s view of a geographical trading bloc. As I have often said, if Francis Fukuyama had called his book ‘the end of geography’ not ‘the end of history’ it would have been much closer to describing the world in which we now find ourselves.
The UK has always been a confident and outward-looking nation: always refusing to be constrained by our size or our island status. And the national pride that is felt at the moment after coming second in the Rio Olympics, ahead of China, and the Paralympics reinforces what can be achieved by a determined population of less than 65 million.
I often think that the era of globalisation could have been written with the UK in mind. We have a system of law, including commercial law that is admired across the whole world and underpins confidence in investments in Britain.
We have a skilled workforce, low levels of industrial disruption, a low taxation and low regulation economy, some of the world’s best universities, access to a good research base; we speak English, and we are in the world’s best trading zone for global trade. And all of these things are part of our economic fundamentals unaffected by our relationship with the European Union.
And these fundamentals have meant that the British economy has proven resilient both before and after the referendum – despite the doomsday predictions that we were hearing.
We are seeing record numbers in employment and the lowest levels of unemployment in a decade; according to the World Bank we are the highest ranked major economy for ease of doing business; and we are still continue to attract investment from all over the world – with huge recent inward investments from Japan and GSK announcing last month that it would expand its UK manufacturing sites to the tune of another £275 million.
And to all those who have doubts about Britain’s ability to achieve economic success outside the European Union let me just give you 2 facts. First, if we take the top 10 markets where the UK has a trade surplus only one of them, Ireland, is in the EU.
And if we look at the 10 markets with which the UK has a trade deficit, 7 out of the 10 are in the EU. It is, therefore, very much in the interests of other EU states that Britain and they makes a success of Brexit and our new relationship.
Department for International Trade
Finally, I want to turn to some of the exciting things happening in government in Britain and how we’re helping British business succeed overseas.
For the first time in years, trade has taken its rightful place at the heart of government policy making and at the heart of the structures of Whitehall.
My department will champion UK PLC around the world, ensuring we boost exports, encourage both inward and outward investment, and prepare the ground for trade negotiations when we leave the EU.
We will also be quicker, than we have been, at identifying big-ticket exporting opportunities in high growth markets; we have already prioritised 31 across the Gulf, including here in the UAE. This not only covers traditional industries such as oil and gas or defence and infrastructure, but emerging areas like life sciences and creative.
And UK Export Finance – the government’s export credit agency, which now sits in my department – will continue to be on hand to ensure that no export to the UAE fails because of lack of finance or insurance. It has already offered finance for billion dollar infrastructure projects, including the Al Maktoum Airport and Expo 2020, and it will continue its great work on reducing barriers to trade.
Before I finish, I want to reiterate that the UK’s and UAE’s economic ties are already strong, but that there is so much more potential for growth.
We are both proud trading nations, and as the UK embarks on its new journey outside the European Union, we have wonderful opportunity to cement our trading future in a way that brings prosperity to all our citizens.
150 years ago the UK was the world’s biggest trading nation, and now we will lead the charge again for freer and fairer global trade. We are essentially at the heart of the new campaign for global trade liberalisation.
Britain is very much open for business as never before.
And that is worth getting out of bed for in the morning.