Milan Expo and How Governments Promote Trade and Prosperity

I’ve just spent the weekend at the Milan Expo.  Over a hundred countries showcasing themselves in a tradition of world fairs that stretches back to the nineteenth century and the “first World Expo” at Crystal Palace in 1851.

The most expensive pavilion was the UAE extravaganza, coming in at allegedly just  shy of £100 million.  It is devoted to telling the Emirates’ epic sand-to-skyscrapers story, blockbuster style.

The small British pavilion on the other hand cost a fraction of that.  It is devoted to bees.  But by the time the Expo closes at the end of this month two million people will have been charmed by its English meadow and giant machined-tooled beehive.  That will make it the most popular British tourist attraction of 2015.  One of the Nottingham duo who created it is Hungarian; the other half German. Cheap, quirky, inspiring, high-tech, multinational.  It felt 100% British.

It set me thinking about how governments and specifically diplomats promote the UK’s prosperity.  Some argue we do so at the expense of other objectives, such as promoting human rights.  Others, that diplomats know nothing about business and so are by definition hopeless at supporting it.

The UK’s export promotion agency, UK Trade and Investment (UKTI) does important work helping British business navigate new international markets.  There’s a role for showcasing too.  The omnipresent GREAT campaign that confidently promotes Britain’s unique mix of past and future, Tower Bridge and Gherkin.  The pavilion that reminds nearly two million Italians that we know how to design things too.

But one area where Britain’s diplomats really come into their own is when they negotiate the opening up of international markets; or indeed, the creation of markets that did not exist before.

One of the great triumphs of the post war period was the establishment of a rules-based international system dedicated to removing the barriers to trade step by step.  The globalisation of our own times comes from the extension of that system to the formerly communist world after 1989.  The UK and its diplomats have been at the heart of constructing this liberal trading system.  They were also at the heart of the processes that brought the former Soviet Union, China and its partners in from the cold, by enlarging the EU and the World Trade Organisation (WTO).

Huge economic forces have been unleashed by this diplomacy.  There have been winners and losers, and transitional costs.  But the UK is undoubtedly more prosperous because this liberal outward-looking economic model has been adopted across the world.  And so is the rest of the world.  The Millennium Development Goals called for the halving of 1990 levels of world poverty by 2015. The goal was met by 2010.  Incredibly, over half of those lifted out of extreme poverty – 300 million people – were in China alone.  Not because of the World Bank, or Western aid.  But because of trade, investment, and global supply chains that link production and markets across the planet, all enabled by rules negotiated over many years, in many rooms, in many countries.  And in almost all of these rooms, there was a British diplomat, patiently pushing for openness.

The UK also stands for fairness and there are plenty of examples where global trade has led to local unfairness.  That’s why the UK is also the G7’s most generous aid donor, providing 0.7% of its GDP to help the poorest countries adapt.  That’s why the UK’s social policies now help those in Britain uprooted by these global forces, in ways that were unthinkable when the Great Depression in the 1930s impoverished millions.

The UK champions the cause of openness still.  My team in Geneva are helping to push forward the Information Technology Agreement (ITA) deal that will liberalise the $2 trillion market in high tech goods; the Environmental Goods Agreement (EGA) deal that will liberalise the fast growing $330 billion market in clean tech; the Trade in Services Agreement (TISA) deal that could be worth £5 billion to the UK service sector alone each year; and last but not least, the Doha trade round.

As I joined nearly 300,000 people at Milan’s own Great Exhibition on Sunday, I also felt a surge of pride.  Because this world of commerce and trade and prosperity is also a world that Britain has played an honourable part in building, no less than the peace that followed 1945.