Over the next five years, £7 trillion of new wealth will be
created across Asia-Pacific— excluding China: a quarter of global
forecast growth and more than twice the entire GDP of the United
Kingdom. Evidence to the Committee described selling into
companies in Asia as “effectively selling into the world”.
By 2030, two-thirds of the global middle class will live in Asia:
a huge market for goods and services that play to UK strengths in
areas like education, financial services, health, and luxury
goods.
But in a report today, the House of Commons Business and Trade
Committee warns the UK is punching below its weight, relative to
both its capabilities and the size of these markets. The UK share
of exports to the region has been stuck at around 12% since the
1990s. The UK can and should do more to support specific sectors
that are driving the growth in these markets: digital trade,
luxury goods, defence, and green tech.
New trade restrictions in the region – especially against those
outside - have been rising: from around 5 per month last decade
to more than 20 per month in 2024. But through evidence in
Parliament, and a series of high-level meetings in Japan earlier
this year, the Committee has found that the UK is now poised for
a “breakthrough moment” for trade with Asia.
Rt Hon MP, Chair of the Committee,
said “There are moments in history when the
tectonic plates of power begin to shift. This is one of them. In
the next five years, £7 trillion of new wealth will be created
across Asia-Pacific—more than twice the entire GDP of the United
Kingdom. By 2030, two-thirds of the world's middle class will
live there. This is not just a commercial opportunity. It is a
strategic turning point—a test of whether Britain has the courage
and clarity to compete in a new economic age, or whether we allow
the future to be written without us.”
“We are trusted. We are respected. And we are needed. But
goodwill alone will not secure our place in the Asian century.
That's why the Business and Trade Committee sets out five urgent
moves: deepen our defence-industrial partnerships to embed UK
expertise in key supply chains; harness our soft power with a
joined-up strategy across embassies, universities, the BBC and
the British Council; lead on digital trade through CPTPP and
DEPA, because data flow is the lifeblood of our services exports;
power Asia's green transition with a Green Trade Strategy; and
above all, deliver diplomacy that works—by being present,
embedded, and permanent in Asia's new growth corridors.”
“The window is open—but it will not stay open. If we fail to
act, others will fill the vacuum. If we rise to the challenge,
Britain can be the partner of choice in a fast-changing world.
Now is the moment. Not for retreat. Not for delay. But for
resolve. Because in the contest for the future, Britain must not
be a spectator. We must be a champion.”
CPTPP accession, bilateral FTAs, enhanced trade dialogues and
rare defence alliances bring strategic advantage and offer the UK
significant leverage to drive down barriers including tariffs,
weak intellectual property enforcement and diverging digital
standards.
But Free Trade Agreements alone will not unlock these markets.
The Committee says Government must now adopt a five-part
strategic approach to realise the full commercial potential of
Asia-Pacific for the UK:
1 - Deepen defence-industrial partnerships. This week's
National Security Strategy rightly recognised the Indo-Pacific as
a core strategic priority. The region is both the engine room of
global growth and the frontline of geopolitical contest. In
Japan, Australia, and Singapore, Britain is not just a trading
partner but a trusted defence ally. The UK should build on
existing cooperation to embed UK industrial capabilities into
regional supply chains.
2- Leverage the UK's global soft power in higher education,
research collaboration, the creative industries and cultural
diplomacy with a joined-up approach that links embassies,
universities, the British Council and the BBC to turn long-term
influence into trade.
3- Accelerate digital trade interoperability. ASEAN's
digital economy alone will hit $1 trillion by 2030. But rising
data protectionism threatens to fragment the market. The UK can
use the CPTPP, bilateral agreements and plurilateral frameworks
to remove regulatory friction, ensure data flows and secure
data-driven trade access. The brand new Trade Strategy has backed
the Committee's recommendation to join more digital trade
agreements in the region
4 - Power Asia's green industrial transformation. Half the
world's emissions come from this region - this is where net zero
will be won or lost. Demand for offshore wind, green hydrogen,
and carbon finance is soaring. Britain needs a Green Trade
Strategy to take its growing, green industrial strengths to those
growing markets.
5 - Deliver diplomacy that works, with sustained senior-level
political engagement and a diplomatic presence on the ground that
is resourced commensurate with the opportunity in the region. In
line with this recommendation, Thursday's Trade
Strategy asks UK Trade Commissioners around the world to
focus on business priorities more.
