Why we need to build bridges not walls

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It’s often said that the only man-made structure that can be seen from outer space is the Great Wall of China.

Built by the Ming Dynasty, its primary purpose was defence - protecting the country from invasion - though over time, the 4,000-mile structure has also acted as a customs border and trading post.

The Great Wall is now one of the world’s leading tourist destinations and today’s Chinese Grand Project is very different.

Called the One Belt-One Road initiative, as conceived by President Xi Jinping, its stated purpose is to globalise, to reach out and grow trade and investment links - essentially creating a 21st century version of the Silk Road.

Great Wall of China

Its budget is $900bn; an investment much more than a road then. Projects include rail links, seaports, airports and even broadband - and so, in many respects, the purpose of Belt and Road is the exact opposite of that of the Great Wall.

To build walls or construct bridges?

This is surely one of societies most fundamental questions, as true for communities and companies, as much as it is for cities and countries.

From Jericho or York, to Berlin or Jerusalem, the construction of walls has played an existential role in city narrative. The same can be said for countries (think of Hadrian’s Wall or the Iron Curtain).

However, walls – and bridges – go well beyond the physical. They can be the abstract, virtual, policy-based expressions of a political and economic perspective.     

Yes, Donald Trump wants to build an actual wall between the United States and Mexico but he is also seeking to introduce new trade barriers, for example with China. This forms an essential part of his Make America Great Again agenda.

Northern Ireland / Ireland border

Closer to home, the desire to avoid a hard border between the Republic of Ireland and the United Kingdom is stressing out the Brexit negotiations to a point of near ossification.

In fact, the vote to leave the European Union is about to throw the UK into the maelstrom of geo-politics and economics.

Having put up a wall of sorts, we will quickly need to get on and build bridges.

As we leave one club, we will have to seek bi-lateral alliances with individual countries - most of whom have their own existing and evolving alliances - all set in the context of economies and governments that can change overnight.

This is why trade deals are so tough and why they take so much time.

Countries likely to be top of the UK list for a deal - such as Australia, Canada, India and the United States – all have their own separate trade policy objectives.

Most especially, this will be to seek open access into the UK for their products, whilst best protecting their own domestic markets from ours - in truth, a consideration at the heart of any deal for both parties.

This certainly includes lamb or butter from New Zealand, chlorinated chicken and other food products from the US and free movement of people from India.

The UK has little experience in trade negotiations, which is why the Department for International Trade has had to bulk up its team by making an astonishing 800 new staff appointments.   

The other consideration of course is this, what exactly is it that we intend to sell into new markets - facilitated as part of new trade deals - that we cannot sell to that same market today?

To date, there has been very little discussion – in fact no discussion - on this.

Today, almost half of our £519bn of exports go to only 5 countries – the US, Germany, France, Netherlands and Ireland – so, one assumes that protecting these markets is the number one priority for the new DIT trade team.

However, I struggle to believe that 800 civil servants are focused solely on the EU and US, so we must be looking to grow new markets, to at least balance any loss in EU trade, as well as fuelling future growth.

The simple fact is this. If we do have the products these markets desire, then growing exports to them is going to be a long, hard slog.

Taj Mahal in India

For example, in terms of the oft-quoted ‘new’ emerging markets, the UK could double its exports to India (currently standing at £5.7bn per annum) and yet India (population 1,340m) would still be a smaller market for us than Belgium (population 11m).

It’s not that we shouldn’t try, but we have to realise there are no quick wins.

Essentially, in order to achieve such growth we have to have the companies chomping at the bit, with desired products in place and a commitment to go out and sell into these markets, beating any competition from elsewhere.

In this context, it is disturbing to hear that the UK government plans a 10% reduction in overseas trade promotion posts.

Midlands Engine

Germany exports five times more to China than we do and, guess what, their export promotion activity is better resourced than ours, even before that 10% cut is implemented.

One of the bridges we are building is greater collaboration across the Midlands. This region is a UK star when it comes to exports and we host some of the UK’s greatest export success stories.

There are many armchair generals who appear on TV at night declaring we should just ‘get on with it’, whatever it is.

Our relationship with the world is about to be reset and success will only be achieved by reaching out, building not walls but bridges - based on values of humility and mutual respect – backed up with hungry companies, excellent products and a cracking sales force.