The True Policy Revolutionary May Be a Woman In the UK

A leading politician set out some interesting views on trade last week. No, it was not U.S. President Donald Trump. Rather, it was United Kingdom Prime Minister Theresa May.

In two speeches, May began to lay out how the U.K. would go about extracting itself from the European Union given the Brexit vote this past June. The most interesting aspects of May’s comments, though, had to do with her vision for a global U.K. That is, the opportunity that Brexit gives Great Britain to advance free trade. May’s take is rather delightfully counterintuitive to the assumptions or assertions being batted around over the past seven months about what Brexit means.

The prime minister offered a straightforward take on what drove the Brexit vote: “It was simply a vote to restore, as we see it, our parliamentary democracy and national self-determination. A vote to take control and make decisions for ourselves. And – crucially – to become even more global and internationalist in action and in spirit too.”

She made clear that expanding free trade is very much central to British decision-making and self-determination. May not only wants to establish a free trade agreement with the E.U., but also accords with assorted other nations. And unshackled from the E.U., she can make that happen. As May put it, “So at the heart of the plan I set out earlier this week, is a determination to pursue a bold and ambitious Free Trade Agreement between the UK and the European Union. But, more than that, we seek the freedom to strike new trade deals with old friends and new allies right around the world as well.”

She went on to name names: “I am pleased that we have already started discussions on future trade ties with countries like Australia, New Zealand and India. While countries including China, Brazil, and the Gulf States have already expressed their interest in striking trade deals with us.”

May also prominently mentioned a free trade agreement with the United States. Interestingly, President Trump, who has been hostile to most trade matters, apparently has responded favorably to this overture.

Breaking away from the E.U. also should serve U.K. global competitiveness well by being cut loose from assorted regulatory costs imposed via the European Commission. This ties in with other positives for Britain in international markets, including a recent reduction in the top corporate income tax rate from 28 percent to 20 percent. Also, as noted in the Heritage Foundation’s 2016 Index of Economic Freedom, the U.K. provides strong foundations in key areas that are critical for international trade and investment. For example, it’s reported: “The rule of law is well established within an independent legal framework. Private property rights and contracts are very secure, and the court system is efficient. Protection of intellectual property rights is effective.” Also: “The efficient and transparent regulatory framework encourages entrepreneurship. With no minimum capital required, it takes less than a week to establish a business. The labor market is relatively flexible.” In fact, the U.K. ranks number 10 among 178 nations in terms of economic freedom – by the way, coming in one slot ahead of the U.S.

Of course, at the same time, work is needed to reduce government spending – government grabbed 43.2 percent of GDP in 2015 – and cutting personal income tax, with a top rate of 50 percent. If May’s government can make significant headway on these fronts, along with a few others, there will be considerable benefits to be reaped in terms of faster domestic economic growth and enhanced international competitiveness.

May noted the benefits of free trade, while also pointing out that they are currently at risk: “The forces of liberalism, free-trade and globalization that have had – and continue to have – such an overwhelmingly positive impact on our world, that have harnessed unprecedented levels of wealth and opportunity, that have lifted millions out of poverty around the world, that have brought nations closer together, broken down barriers and improved standards of living and consumer choice, forces that underpin the rules-based international system that is key to our global prosperity and security, are somehow at risk of being undermined.”

In the United States, the benefits of free trade were placed at risk during much of President Barack Obama’s eight years, as he bowed to anti-trade pressures from labor unions and environmentalists. Now, free trade is in serious question due to President Trump’s misguided populist proclamations.

So, perhaps we are returning to a time when the small island nation of the United Kingdom once again must lead the global economy in defending and advancing free trade. If the U.K. truly picks up the mantle of trade leadership, it will reap great rewards.