British Economy: Lawrence Lui Frank Fritsch. Department of Trade and Industry.

British Economy:

Lawrence Lui

Frank Fritsch

Department of Trade and Industry

Background

• World’s eight largest exporter of goods (£ 191 billion in 2004)

• Second largest exporter of services (£ 96 billion in 2004)

• Exports are equivalent to around one-quarter of GDP

• Highest ratio of inward and outward investment to GDP of any leading economy

Goals

• Living standards and the competitiveness of our industry depend on our ability to trade and invest freely

• Maximizing the opportunities for international trade

• Liberalization

• Opening the markets of developing countries

Trade and Investment: how the UK benefits

• lower prices and wider choice for consumers• Promotes economic growth in developed and

less developed economies

UK trade and investment

• UK Trade & Investment is the Government organization that supports companies in the UK doing business internationally and overseas enterprises seeking to set up or expand in the UK

UK trade and investment

• Has contacts with over 200 different UK embassies that will help with the trading policy

Gains from liberalization

• Since then, average industrial tariffs of developed countries have fallen from nearly 40% to less than 5% through eight rounds of multilateral trade liberalization

• A more liberal investment environment has facilitated increased overseas investment

• By 2003 the world stock of foreign direct investment was equivalent to 23% of world GDP compared with 6% in 1982

Current: Trade Deficit

• Narrowed to 3.9 billion pounds ($6.8 B)

• Compared to 5.8 billion pounds in August

• Export to EU down 3%• Exports to rest of world

up 9%

EU Involvement

Developing Countries & Trade

• Competitive domestic markets

• promotes greater use of the market

• more stable and less arbitrary policy intervention

• stronger competition

• macro-economic stability

Involvement in multiple organizations to help international trade.

• Special/Differential Treatment in the WTO• The United Nations Conference on Trade and

Development (UNCTAD)• Economic Partnership Agreements (EPAs)• The Generalized System of Preferences (GSP)• EU Free Trade Agreements (FTAs)• Current: Indo-British Partnership Network (IBPN)

Presidency of the EU and DTI's four main goals

• Better regulation

• Open and sustainable markets in an outward facing Europe

• Boosting our economies’ potential for research and innovation

• Promoting employment

• Current: EU budget rebate proposal for 2007 - 2013

World Trade Organization Involvement

WTO: G8 (G7)

Group of 7/8•Leaders discuss ways to address major economic and political issues

•Who are the G7 Finance Ministers and what is their role?

Chancellor: Gordon Brown

• The Chancellor of the Exchequer is the title held by the British cabinet minister responsible for all financial matters

• He also has oversight of public spending across Government departments, and is generally second only to the Prime Minister in political power

WTO: Hong Kong Summit

END.

Questions?