This article by Carl Richardson was first published in the Express & Star newspaper in December 2023:
As we stand on the cusp of a new year, 2024 promises more fireworks than just those that millions of people will see at iconic landmarks around the world as clocks strike midnight on the 1st January.
Somewhat incredibly, 2024 looks almost certain to be the first year since 1964 when a US Presidential and UK General Election will coincide. Close to 400 million voters will go to the polls to decide who will take up – or remain – in residence in both the White House and 10 Downing Street, unless of course Rishi Sunak does run the clock on his term right through to January 2025.
While domestic politics and the drama that will play out across the pond will no doubt dominate our airwaves, we should note that elections are also due to be held in India (population 1.4 billion), Indonesia (population 275 million), Bangladesh (population 170 million), Mexico (population 130 million) and South Africa (population 60 million) amongst other countries as well over the next 12 months.
In total, over 2 billion people will have the opportunity to vote in 2024 and democratically elect the leader of their country. As we remember ever year in November, this was a hard-won right for freedom and certainly something that nobody should ever take for granted.
The interest in the US election is of course understandable. With the characters who are likely to be involved, the drama around the election will be ‘box office’ and no doubt make for compelling viewing. It should also offer a bonanza for advertising companies, and any businesses associated in the production and distribution of ads, with a record spend of $16 billion expected around the election, 30% more than was the case during the previous election cycle.
From a business perspective, America remains the biggest economy in the world and the UK’s single largest trading partner, so what happens over there undoubtedly has an impact on many British businesses.
While our own business has investments in a number of countries outside the UK, including in Asia, Australasia, and Western Europe, we continue to have a significant focus on the US, and Canada, and generally regard them as great places to invest, grow and conduct business.
Talk of a Free Trade Agreement between the UK and the US is something that all recent Prime Ministers and Presidents have been asked about, especially in the aftermath of Brexit. Sadly, there seems little prospect of that happening at a national level, with the Biden administration briefing again this month that prospects of such a deal are ‘off the table’.
Nonetheless, the UK Government, and in particular the Trade and Business Secretary Kemi Badenoch, should be applauded for pursuing an alternative strategy to bolster transatlantic trade, through the signing of ‘Memorandums of Understanding’ (MoUs) with individual US States.
The 7th such MoU was recently signed with Florida Governor Ron DeSantis – who may still be a candidate in the Presidential race – with a focus on boosting exports between the UK and Florida in high-potential sectors such as ‘fintech’ and space.
With a GDP of over £1 trillion, approximately the same size as Spain, the deal with Florida would seem a smart way of stimulating business opportunities for UK firms without requiring a full trade agreement. There is talk that the next such deal could be signed with California, which would be the 5th largest economy in the world were it to be a sovereign nation. It is surely to be hoped that however the elections work out in 2024, this pragmatic approach to stimulating trade and boosting business continues.
Equally, as much as the UK’s Transatlantic relationship will be of great importance to business in 2024 and beyond, there should also be much benefit to be had by those businesses who set their sights a little further and think ‘Transpacific’ in the New Year.
As a country, the UK signalled its intention to do this in early 2021, when the Government’s ‘integrated review’ spoke about the economic and security benefits of a ‘tilt to the Indo-Pacific.’ Three years on and one can see that this is a plan that has been executed upon to at least some extent, with further attention needed to solidify it.
The UK’s application to become the first new member to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trading block has been accepted. Full membership of a body that will represent over 15% of global GDP is now expected to come into force later in 2024, and will offer exciting opportunities for UK businesses to develop trade around the Pacific. After all, it should be remembered that we are in ‘Asia’s century’ and this is a region where McKinsey estimate 60% of the world’s middle class will reside by 2030.
Further efforts at enhancing business and trade opportunities have continued alongside CPTPP membership. One such would be the ‘Digital Economy Agreement’ that the UK signed with Singapore in 2022, guaranteeing the free flow of digital content between the countries and subsequently making it easier for business in either country to trade digitally together.
From a defence perspective the Royal Navy has taken some initial steps to increase the British presence in the neighbourhood, permanently deploying two warships – HMS Tamar and HMS Spey – to the region. More generally, the UK has also continued to participate in the long-term AUKUS trilateral partnership with Australia and the US to deliver nuclear-powered submarines to Australia by the late 20230s, and we wait to learn about other initiatives designed to support British interests around the Pacific.
The geopolitical situation in the region is undoubtedly extremely complex, driven by the growth of China as an economic and military powerhouse in recent decades, and the key role that it now plays in all global economies.
Such complexities are well illustrated by a situation facing the CPTPP group, now including the UK, which has received applications for membership from both China and Taiwan.
While discussions around these applications will no doubt require careful and creative diplomacy, it is just another small example of the attractiveness of the CPTPP group, and why the fact the UK has a seat at the table should encourage businesses to fully explore the opportunities that it will offer. An analogy that may be helpful for the future could be to view CPTPP as a muscle – it will only grow and strengthen if it gets used and worked out properly.
Ultimately, opportunities abound across the Pacific region, and it deserves attention as much as North America. Over the past year our business has continued to invest there, lately in both Singapore and Australia. One such investment has been with Permaconn, an Australian based firm that is a leader in alarm signalling communications technology, with products that ensure alarm signals are securely delivered from protected premises to monitoring centres.
2024 promises to be as unpredictable as recent years, and making predictions at this time of year is undoubtedly somewhat futile. Suffice to say that whatever challenges are thrown at the business and wealth creating community, the men and women who take risks, grow businesses, employ others and ultimately generate the taxes that pay for our public services, will continue to seek out opportunities and innovate in order to find success all around the world.
Oh…and Aston Villa will also win the Premier League.