The economic and political background for the UK

#accelerate#economic#India Britain looks forward to signing a free trade agreement with India to boost its economy. Pictured is a container terminal in India. Britain and India have launched what is expected to be Britain's biggest trade talks this year. How important is this negotiation to the UK? What is the current state of UK-India trade? With no progress in negotiations for a free trade agreement with the US in early 2022 and little prospect of a breakthrough in the foreseeable future, the UK has high hopes for talks with India that officially begin with Delhi on Thursday (Jan 13). India is expected to be the 3rd largest economy in the world by 2050. The British government hopes trade with India will double in ten years. Anne-marie Trevelyan, Britain's minister of state for Trade, called the prospect of a free trade deal with India "a golden opportunity" and, of course, the potential for huge commercial benefits. George Riddell, e&Y's director of trade strategy, said the opening of the talks was a "welcome step", which he said had generated real enthusiasm in the business community. But India, with many vested and fragile interests to protect, has been reluctant to liberalise, says Chris Morris, the BBC's World Trade correspondent. The EU has been trying for years to strike a meaningful deal with India, with little success. Australia has also been trying to reach an agreement for a decade. Negotiations were particularly difficult in areas such as government procurement policy and trade in services. Mr Liddell pointed out that the terms of trade currently used between service providers in the UK and India date back to 1995 and do not cover any technological advances that have taken place in the past 25 years. India has always placed high requirements on Indian professionals and students to obtain UK visas to work and study abroad.If the recent history of negotiations with India suggests they will be difficult, why is Britain pushing for a trade deal with India as quickly as possible?Announcing the formal launch of the talks, the British government pointed to India's economy of more than $2 trillion and its huge market of 1.4 billion people.The government also says a free trade agreement with India, if concluded, would create huge benefits for both countries. Total trade between the UK and India could increase by £28bn a year by 2035 and add up to £3bn to wages across the UK. Indian-invested UK projects The UK's increased push for a trade deal with India is also partly due to the difficulties of negotiating with other important economies.For the UK, China is basically a no-go area. Although China's economy has passed the $17 trillion mark, it has 1.4 billion people.The United States is saying no; Other big emerging economies, such as Brazil, are extremely difficult to negotiate with; Britain and the European Union have reached a deal, albeit on worse terms than before Britain left.Smaller deals could be struck, such as the one already agreed with Australia and another in principle with New Zealand in 2021. The British government sees the agreements as an important step towards joining the TRANS-Pacific trade agreement CPTPP in one of the world's most dynamic regions.But the uncomfortable truth is that, after leaving the EU, the UK is trying to rebuild its trade policy almost from scratch, while, broadly speaking, many governments are focused on domestic economies.Emily Jones, associate professor of public policy at Oxford University's Blavatnik School of Government, said that in general, some of the momentum for trade agreements has dissipated.It does not help that there is little momentum behind a multilateral deal at the World Trade Organisation. And under President Trump and Joe Biden, the United States has been focused on protecting American workers at home.As a result, the OBR estimates the economy will shrink by about 4 per cent in the long run as less trade takes place outside the SINGLE market and officials are under pressure to find ways to make up the shortfall elsewhere.Ms Jones said: "We have really good British civil servants working in trade, but I think politics is driving the agenda of trade negotiations. The importance of demonstrating performance was given priority over intrinsic economic value."The government would challenge that. It is trying to boost digital trade and exports of services, an area where the British economy has often excelled. But the overall strategy is less clear.When it comes to the environment, for example, analysts say it is not clear how Britain's trade policy fits into the UK's climate goals.In agriculture, the UK government wants to promote a shift towards sustainability and biodiversity. But at the same time it has agreed to open up agricultural trade with Australia, whose agriculture has become far more entrepreneurial than Britain's.Minette Butters, president of the National Farmers' Union, is of course critical of the UK-Australia trade deal, saying the Australian deal is one-sided and offers little benefit to British farmers.The administration responded by saying it was trying to strike new types of trade deals, which meant some people might not like it because it would be different from past deals.Last month, Britain's trade minister, Mordaunt, gave a speech in the United States urging Washington to stand with Britain in the "global game between two competing models of capitalism."She argues that free trading Britain is on one side and the EU, a trading bloc that is pushing its regulatory system to the rest of the world, is on the opposite side.