By Claire West
ippr analysis shows that while UK exports to BRIC countries have increased rapidly in the last decade, they still lag behind Britain’s share of world trade. If Britain increased its share of BRIC countries’ imports from their current levels to 3.7 per cent (our global average), it would be equivalent to £27 billion of extra UK exports.
In a speech for ippr at the London Stock Exchange, Lord Mandelson will say:
'As Europe’s Trade Commissioner, I had experienced life at the sharp end of globalisation and the very complex politics of its transmission belt, international trade. The challenge to how we live in the West, how we are earning our living in the world, and also how globalisation is transforming life in the rest of the world.
'At one level, I found these changes both exhilarating and positive. I’d seen enough third world poverty as a young man in Tanzania and elsewhere to feel that the forces that were lifting and pulling people out of the grinding poverty of agricultural self-sufficiency were not a bad thing.
'Stand back far enough from globalisation and what you see is its relentless ability to exploit technology and deploy capital — that is, invest in the growth potential of developing and emerging economies — more and more efficiently.
'Modern economic life seemed to me to be characterised pretty simply: new opportunity for many, new uncertainty for most. And I started to recognise the deep causes of a lot of what I had seen as an MP for Hartlepool for 13 years.
'Because it seemed to me that there were two very different globalisations: the economic version, the 'seen from 10,000 feet' version, of new opportunity and aggregate growth.
'And a more personal and individual one, in which jobs were lost and real wages stagnated and from which only a relatively small elite seemed insulated.
'But this is not the only contrast — within — countries that struck me about globalisation. Another is that between countries and the very different types of economy and different economic rules that prevail in the world.
'Simply boiled down — while being cautious of simplifications — the distinction between liberal economies that are open and democratic in the main, and others that are more centralized and protected by the state, with or without fully democratic political systems.
'On one hand the liberal economic narrative, in which free trade and liberal economics were driving innovation. And the more ambiguous reality, in which some states played by the liberal rules of free economic competition only when it suited them, and the rest of the time distort the costs of capital, protect and subsidise industry and blur the line between transparent and opaque regulation.
'I am not, here, suggesting that there is a right course and a wrong course and that we in the liberal, democratic West are on the side of virtuousness while anyone else is a sinner. Economics is a lot more complicated than that, as is politics: the tensions among the faster growing emerging economies are just as great, if not more so, than between developing and developed countries. Just observe the mounting strains in the trade relations and currency arguments between China and Brazil, or India, that bear witness to this cross-cutting political web.'
Impact of the financial crisis
'The financial crisis has added another layer of complexity and political reaction to this. Because it seems to exemplify for many the volatile and unaccountable power of global markets. And the extent to which our lives, our jobs, our pensions can end up as collateral damage in their periodic crises.
'And while it is an understatement to say that it is a little more complicated than that, it still captures a very real political anxiety that things have somehow got beyond our control. That globalisation is something that is being done to us than for us, and that far from celebrating it, we all need protecting from it.
'So the work ippr is launching today is both important and timely. Because its focus will be both on understanding these challenges and their consequences better, and on setting out strategies to address them.
'We'll be gathering our evidence not just here in Britain and Europe, but around the world, from India, Brazil and China, on the globalisation frontline as well as from less developed countries.
'Britain’s place in the global economy reveals a £27 billion export gap to the BRIC countries. While British exports to BRIC countries have increased rapidly in the last decade, they are still behind Britain’s share of world trade. If Britain increased its share of BRIC countries’ imports from their current levels to 3.7 per cent (our global average), it would be equivalent to £27 billion. ippr’s work will seek to identify how to close this gap.'