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Abu Dhabi, UAESunday 16 December 2018

Jacob Rees-Mogg talks to The National about Middle East trade ties post-Brexit

Top politician says the British government is “extremely enthusiastic” about developing free trade deals with region's nations

Conservative politician Jacob Rees-Mogg. PA
Conservative politician Jacob Rees-Mogg. PA

Touted as Britain's next prime minister, the Member of Parliament Jacob Rees-Mogg has trade with this region firmly on his mind as the United Kingdom looks to its post-Brexit future.

The bespectacled politician, well-known for his staunchly pro-Brexit views, tells The National that the UK government is “extremely enthusiastic” about developing free trade deals with the Middle Eastern nations.

“The UK has a lot of important, long-standing alliances with the Middle East, in terms of friendship and defence alliances, and it would sensibly follow to develop those into trade alliances,” he says.

“The more free trade, from our point of view, the better. And the closer the relationship, the better. I think the UK government and [the UK secretary of state for international trade] Liam Fox would be extremely enthusiastic about developing free trade with Middle Eastern states.”

Indeed, one of the first official trips that Mr Fox made after the country voted to leave the EU last summer was to the Middle East, showing the importance with which the UK views its links with the region.

On his visit to countries including Bahrain and the UAE last September, Mr Fox spelled out how he wanted to take British-GCC trading relations further after Brexit, identifying 31 “big ticket exporting opportunities”, which include defence, infrastructure, science and hydrocarbons.

Mr Rees-Mogg clearly agrees that there are huge areas of collaboration between the UK and the Arabian Gulf nations.

“It’s very hard to see who loses by increasing trade,” he says. “In my view, the UK should be as open to products produced in Middle Eastern countries as possible. We should welcome imports from the Middle East, without tariffs.”

The UK faces a challenge in that it is not technically allowed to strike any new trade deals until it officially leaves the EU, in March 2019. But does Mr Rees-Mogg regard that as a problem?

“Yes and no. We can’t conclude deals until after we’ve left, under EU law. But we can certainly lay the groundwork,” he argues.

His chances of steering Britain through Brexit talks have been given a significant boost this week, after he topped a survey of ruling Conservative Party members as the favourite to replace the incumbent leader, Theresa May.

In the survey for Conservative Home, the North East Somerset MP secured 23 per cent of the vote, while the Brexit secretary David Davis came in second with 15 per cent.

Affectionately dubbed "the MP for the 18th century" thanks to his unashamedly old-fashioned ways, Mr Rees-Mogg has seen a surge in popularity since the British general election in June. Social media has also fallen in love with him, with a grass roots movement called “Moggmentum” set up to celebrate his every word.

Earlier this week, The Times fuelled leadership speculation with a report claiming that Mr Rees-Mogg is to be given a ministerial position in an impending reshuffle, which will put him in prime position to replace Mrs May.

Mr Rees-Mogg has always denied his leadership ambitions, however, and he gives the same message to The National. “I remain, and am very happy being, a Member of Parliament for North East Somerset.”

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He adds that he was delighted that Mrs May had stated her intention to stay in power for the foreseeable future. “That’s very welcome, that’s very important, and I’m very pleased that she’s done that. I think it’s helpful to have certainty.”

Certainty is what British business craves right now. Many UK-based banks are putting in place contingency plans as the Brexit talks get off to a rocky start, with no agreement between the two sides on some of the key sticking points, such as the so-called “divorce bill” that Britain will have to pay as it leaves the bloc - that has been mooted by the EU as up to £60 billion (Dh287.42bn) although the UK government remains adamant it will not pay anywhere near that amount.

As one might expect, Mr Rees-Mogg is less concerned about the apparent stalemate in Brussels.

“I think things are going broadly in line with what you would expect,” he says.

“Both sides are putting their case forward, but we are still in the early stages. Most EU discussions are completed just in time for the deadline. It’s very rare for EU discussions to be completed well in advance.”

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The old Etonian is himself a successful financier, so it is in a way reassuring that he does not feel too concerned about the progress of the Brexit talks. As a partner and co-founder of Somerset Capital, he oversees assets under management of almost US$9bn. The fund invests primarily in emerging and frontier markets, including Asia, the Middle East and Latin America. It has offices in London and Singapore, and Mr Rees-Mogg has spent time living in Asia himself, before returning to his country estate in Somerset.

Perhaps it is this exposure of living and working in the East which gives him his unwavering confidence in Britain’s vast trading opportunities after Brexit.

“The more tariff-free trade you can have as a country, the better,” he says. “In this way, you can reduce prices for your own consumer. Protectionism protects the producer interest, not the consumer interest.”

He adds: “I would have thought, from our point of view, we would have been keen to agree a deal of almost complete openness.

"But that will really depend on what Middle Eastern states want to do in return.”