Addressing an online seminar co-hosted by Mersey Maritime, Western Union and Maritime UK, trade minister Graham Stuart said sea-borne trade would lead the post-COVID recovery. Tony McDonough reports
Trade minister Graham Stuart has put Merseyside and the UK’s maritime sector front and centre of Britain’s post-coronavirus recovery .
Addressing an online seminar co-hosted by Mersey Maritime, Western Union Business Solutions and Maritime UK, the Minister for Exports at the UK Department for International Trade said sea-borne trade would “lead the recovery”.
Mersey Maritime chief executive, Chris Shirling-Rooke, opened the Global Trade and Maritime Virtual Summit, introducing Mr Stuart as well as Martin Beck, lead UK economist at Oxford Economics, and Hikmet Ersek, chief executive of Western Union.
There was also a panel discussion which brought in Andrew Summerill, Global Head of Payments at Western Union, and Dr Carl Stephen Patrick Hunter, chief executive at Coltraco Ultrasonics. Business leaders and entrepreneurs from Merseyside and across the UK joined the online audience.
Ambition and spirit
Mr Stuart began by invoking the spirit of British explorer James Cook, who spoke of the value of “experience, resilience and pragmatism”. The minister added: “Cook spoke of the ambition and spirit of endeavour that we must embrace today.
“As we emerge from this crisis we will need to be stronger, more open and more dynamic than before and the maritime sector will be part of that. The sector can already boast world class excellence… we need to build on these strengths and take the golden opportunities offered by global trade.”
He spoke of the importance of “fighting protectionism” and encouraging free trade across the world, adding that the diversification of our supply chains was now “more important than ever”.
The UK is now looking to strike trade deals with the rest of the world following our departure from the European Union. Mr Stuart spoke about the importance of the negotiations with the US and also said the UK was opening dialogue with Japan, the biggest economy in the transpacific region.
“The biggest single thing we can do is open up global markets for UK firms… we will need a vibrant maritime sector. The Department for International Trade has teams on the ground both here and across the world who are determined that we have a trade-led recovery,” said Mr Stuart.
Global connections
In a pre-recorded address, Hikmet Ersek spoke about the importance of connecting people across the world, something his company had been doing for 170 years, he added.
“Sea transportation is enormously important. By 2050, it is estimated 80% of all global trade will be done by sea. When goods and money move then good things happen. When goods and money do not move then things will not happen,” he said.
Upbeat analysis
Martin Beck from Oxford Economics offered a detailed analysis of the UK economy and its prospects in a post-COVID world and his assessment was more upbeat than many may have imagined. To illustrate the size of the current crisis, he began by quoting Lenin… “There are decades when nothing happens and there are weeks when decades happen.”
He talked of the economic shock that had hit not only the UK but also many countries across the world. He said the UK economy was currently operating at 85% of normal capacity and he expected a 14% plunge in GDP in the second quarter of this year.
He added: “We expect GDP to shrink by 8% in 2020 but as things become more normal the economy should steadily rebound. In level terms, the economy should return to its pre-pandemic size by the end of 2021. That will represent two lost years of growth.”
Mr Beck said it was important to bear in mind that this isn’t a normal cyclical recession. He said: “The Government has ordered the shutdown of part of the economy to protect public health. The economy isn’t shrinking because of private sector excesses, structural problems or policy mistakes. Unlike a natural disaster, physical capital is unscathed.”
While uncertainty remains over what happens next in terms of the pandemic, he said, the UK Government was in a good position to keep borrowing at record highs for an extended period of time, with debt now being so cheap, saying: “The UK Government can effectively borrow for free and there is no urgency to cut the deficit quickly.”
He speculated that we may be entering a new era of big Government with public demand for redistribution rising and the need to prioritise capacity in areas such as the NHS rather than focusing on efficiencies.
Mr Beck acknowledged that while the potential benefits of a trade deal with the US had been hotly debated, there was strong evidence that the UK could make significant gains from a new agreement. He explained: “The US has consistently been the UK’s single largest (sovereign) export market.
“Share of UK exports to the US has been stable for the past 20 years while during the same period we have seen a decline in exports to the EU. Strong existing trade links and closeness in terms of language and culture could magnify benefits of a deal. There are strong underlying fundamentals.”
Embracing change
Mr Beck, along with Andrew Summerill and Dr Carl Stephen Patrick Hunter, took questions at the end of the session. Mr Summerill said he believed those businesses that embraced digital technology and flexible working would be the biggest beneficiaries of the post-COVID recovery.
“Those that change the fastest are the ones that will take full advantage of the momentum of the recovery,” he added.
Dr Hunter urged businesses to look beyond Europe to the East and emerging economies such as India as well as the Commonwealth and both North and South America. He added: “We must not allow ourselves to be frozen by the COVID effect.”
Mr Beck emphasised the versatility and the willingness to change that exists within the business sector. He explained: “Economists tend to take a static view and they can downplay how adaptable we are.”