In a major new report, “Making Trade Work Again: Resetting the
UK's Trade Strategy for a Changing World,” the Institute for Global Change
argues that the UK's trade strategy needs a fundamental reset.
The old model – built on multilateral liberalisation, US
leadership and falling trade costs – no longer holds.
Multilateral progress has stalled. The US is increasingly using
trade policy to pursue strategic and domestic goals. And the risk
of deeper trade fragmentation is growing.
While the government is rightly re-engaging with major partners
including the US, EU and China to improve the UK's trade
prospects, this must be the starting point for a broader
strategic rethink on two fronts.
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From Slow-moving FTAs to Dynamic Market Access
Agreements
A core part of that reset is recognising the diminishing returns
from traditional free trade agreements. Following welcome
progress on an FTA with India, the UK now has agreements in place
or pending with most of its major trading partners. FTAs are also
slow to negotiate, heavily goods-focused, and less aligned with
the UK's service-dominated economy. Rather than chasing further
gains through broad, slow-moving deals, the government should
shift more of its trade negotiating resource towards targeted
market access agreements that focus on the UK's sector strengths
– particularly in digital services, where trade is growing
rapidly. As TBI's report sets out, this shift would make the UK's
trade strategy more agile, more competitive, and better suited to
the realities of a fast-changing global economy.
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Tech-Enabled Trade Facilitation as a New Engine of
Growth
The report also highlights that in a world where signing new
trade agreements is increasingly difficult, the UK must make
better use of the deals it already has – by investing in digital
trade infrastructure to make it easier, cheaper and faster for
firms to trade, especially for SMEs. It proposes a package of
reforms to unlock this potential, including: an AI-powered trade
advisor to help businesses navigate rules and access markets; a
reboot of the UK's stalled Single Trade Window; the use of global
supply chain data to make customs checks more efficient; and
encouraging the use of distributed ledger technology to speed up
and simplify trade documentation and cross-border payments. Done
right, tech-enabled trade facilitation can become a new engine of
growth.
Trade has been a major driver of UK growth in the past. With
growth weak, public finances tight, and global conditions more
volatile, the government must do all it can to ensure trade is
contributing to economic performance – not weighing it down. That
demands a more shrewd, modern and strategic approach to
navigating the world as it is, not as it once was. The
government's forthcoming Trade Strategy should reflect these
pivots if it is to be fit for the future.
Tom , Director of Economic Policy at TBI
said:
“The UK can't control global trade winds – but it can ensure its
own sails are set to catch them. The government is right to
re-engage with major partners like the US, EU and China, but
that's only the start. Globalisation is evolving quickly, and the
UK's trade strategy needs to evolve with it.”
“We should place less emphasis on broad FTAs, which often get
bogged down in debates over sensitive goods sectors – and focus
more on faster, targeted market access agreements that reflect
the UK's strengths in services and digital trade.”
“And we need to make sure more businesses can benefit from the
trade deals we already have – by upgrading the UK's digital trade
infrastructure to make it faster, simpler and cheaper for UK
firms to trade. Get it right, and trade can be a real engine of
growth – even in this tougher global environment.”
You can find a copy of the report here
