UK Trade Strategy

As well as seeking new arrangements with the EU, like the recently announced EU-UK Common Understanding, the government will look to make the most of our existing trading arrangements.

CBI impact

The CBI has long called for the full implementation of the Trade and Cooperation Agreement and will continue to work with both governments to ensure businesses on both sides of the Channel are benefitting from a smooth trading relationship.

In light of tariffs and wider geopolitical instability, a strong transatlantic relationship is critical to the UK’s growth. In addition to the recent UK-US Economic Prosperity Deal, the government reaffirmed the UK’s commitment to secure a transformative technology partnership with the US.

CBI impact

This technology partnership aligns with the CBI’s calls for the government to refresh the Atlantic Declaration, strengthening cooperation across technology and AI.

Whilst keeping national security front of mind, the government has emphasised the importance of the UK-China trading relationship to the UK’s growth. As well as the Economic and Financial Dialogue launched earlier this year, the government has committed to reconvening the Joint Economic and Trade Committee (JETCO).

CBI impact

CBI members told us that removing market access barriers and reconvening the Joint Economic and Trade Committee were their top priorities when it comes to the UK-China relationship.

The government has committed to identifying new levers, in additional to Free Trade Agreements, to build new and modern partnerships with emerging markets. For business, these partnerships will present real opportunities for growth.

CBI impact

We previously urged the government to look at the specific actions needed across each region to enable firms to grow their in-market footprint and increase trade with emerging markets.

The Regional Convention on Pan-Europ-Mediterranean preferential rules of origin (PEM) establishes common rules of origin among its members to facilitate trade and support supply chain integration. The government will now engage business and PEM members to consider the benefits of joining PEM.

CBI Impact

In discussions with the government, we have signalled that joining PEM could help the UK harmonise rules of origin and increase flexibility for UK exporters. However, we have flagged that this is not a catch-all solution and could have varying effects across different sectors. Looking ahead, we will gather member views and insights to feed into the government as they begin consulting with the business community.

The UK will now join the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), a temporary arrangement for resolving appeals while the dispute settlement system remains only partially operational. The UK will continue collaborating with other WTO Members to re-establish a fully functioning WTO dispute settlement system. Joining MPIA sends a clear signal that the UK is committed to the principles of free and fair trade.

CBI Impact

The CBI has repeatedly called for the government to lean into free and fair trade in the face of an increasingly protectionist and fragmented world. It is critical that the UK remains an advocate for the importance of an open trading system, particularly as the will of other countries to make multilateral progress wavers.

The government has assessed the full suite of its trade tools and will look to use a wider range to seize opportunities that promise growth in the short to medium term – including Digital Trade Agreements (or Digital Economy Agreements), Mutual Recognition Agreements and other sector-specific agreements. The initiation of dialogues with countries like Brazil, Kenya and Malaysia to explore new bilateral digital trading agreements are thus a highly positive step. Flexible trading arrangements such as Memoranda of Understanding or Economic Growth Partnerships may be better alternatives which allow for changing geopolitics and address specific sector needs.

CBI impact

CBI members have generally found Free Trade Agreements to be useful, but have emphasised the importance of the government making smarter and more strategic interventions. Building on existing clean energy and green sector agreements with partners like Norway and Japan are also positive next steps for the UK.

The government has refreshed its commitment to exploring and negotiating new Mutual Recognition of Professional Qualifications (MRPQ) agreements.

CBI impact

Our Trade in Services Council, Services Trade Taskforce, and other trade working groups have repeatedly highlighted the importance of these agreements, which will enhance the international attractiveness of UK qualifications, address skills shortages in the labour market, and enable professionals to practice across jurisdictions. Indeed, just last month our Building Bridges report called for the government to negotiate an MRPQ agreement with the EU.

Without stable and predictable regulatory environments, businesses cannot grow and innovate. The launch of the new Ricardo Fund will provide much needed capacity to regulators to resolve some of the UK’s highest priority trade barriers. Alongside the fund, the government has committed to annually publishing details of its successes in addressing barriers – an important step forward for transparency.

CBI impact

The CBI called for the government to create mechanisms through which UK regulators can work with their international counterparts to address barriers to trade. Within this, we urged the government to undertake a full mapping exercise detailing where regulatory dialogues already exist and how effective they have been for business and consumers to identify gaps in regulatory engagement and to understand where new dialogues should be established with key partners.

Often firms experience difficulties when trying to understand what bilateral and multilateral agreements mean in practical terms for their business when seeking to export goods and/or services. Government will now look to provided clearer guidance and resources for firms on their exporting journeys.

CBI impact

In our Serving Up Success report, we called on the government to provide clearer and more accessible guidance for firms on their exporting journey.

The government will establish a regular, structured two-way dialogue with UK businesses on evolving EU legislation. Businesses can highlight the implications of EU regulations on their operations and the support they need from government, whilst the government can simultaneously use this feedback to guide their regulatory engagement with the EU.

CBI impact

As the UK and EU’s regulatory regimes have evolved following Brexit, CBI members have reported increased disruption, costs and operational challenges, which is why we have long been calling for greater regulatory cooperation.

The government’s GREAT campaign has done a commendable job at promoting the UK as a leading destination for trade and investment and will now be expanded to target international buyers, promote the UK’s strengths, and utilise FTA milestones to generate interest among international businesses. As well as this, ministerial engagements abroad will be used to further amplify GREAT campaign messages.

CBI impact

The CBI has underscored the importance of trade shows and missions as a tool for the UK to signal to overseas partners that it is open for business and to connect UK-based companies to customers in overseas markets. CBI members are pleased to see a commitment to strengthening this important campaign.

The government has committed to building a more flexible hub and bespoke delivery model across government, supporting UK firms in markets with the greatest opportunities for the UK. As well as strengthening and deepening its expertise across international markets, the government has also committed to breaking down cross-departmental siloes by having UK Ambassadors and High Commissioners work closely together to give equal weight to business contacts and political contacts.

CBI impact

In our response to the FCDO’s Economic Diplomacy Review, we highlighted the importance of UK Ambassadors and HM Trade Commissioners operating in a dynamic and collaborative way to strengthen cross-government working and revitalise the UK’s diplomatic offering.

The government has recognised UK Export Finance (UKEF) as a critical lever to drive economic growth, increasing UKEF’s capacity to £80 billion – funding which will be used to drive export-led growth across the UK.

CBI impact

CBI members have frequently highlighted the negative impacts of reduced export support on their operations. Better incentivising firms to export will supercharge growth and, if done in conjunction with non-financial support, will maximise uptake and impact.

Two years after the Electronic Trade Documents Act came into force, the government announced it will deliver a set of related pilots to accelerate the adoption of Electronic Trade Documents. Alongside these pilots, a new online information hub will be the first port of call for businesses looking to digitise their trade journey.

CBI impact

As called for by the CBI’s Trade in Services Council, there is still work to be done to raise awareness of electronic trade documents among the business community. These announcements will make digitalising supply chains and trading international both easier, faster and cheaper.

Supply chain resilience is critical for the UK’s economic security. The government has announced the launch of a new Supply Chain Centre, which will spearhead work in this area and help to secure the UK’s ability to withstand future disruptions. The Supply Chain Centre will undertake data-driven, business-informed reviews of critical supply chains and crystalise the specific actions needed to build resilience. Most critically, the Supply Chain Centre will work with international partners to find common solutions to supply chain challenges, mapping supply chains and developing coordinated responses.

CBI impact

The CBI has been strongly advocating for the government to work with international partners to de-risk, diversify and reduce critical dependencies and systemic vulnerabilities, as well as taking a more active role in mapping supply chains to identify economic security challenges and opportunities.

A new Economic Security Advisory Service will streamline the government’s approach to partnering with business on economic security issues. This service will connect government expertise and guidance with priority growth businesses, offering advice, guidance and support and enabling an effective two-way dialogue.
CBI impact: In the CBI’s Strengthening our Economic Resilience report, we outlined the importance of effective dialogue between government and industry when it comes to bolstering the UK’s resilience and emphasised the need to bring together senior cross-Whitehall resilience leads with businesses to monitor and develop mitigation strategies for current and emerging risks.

By committing to drive initiatives which support trade in environmental goods and services, promote high sustainable standards, and protect the environment, the government is ensuring its trade policy complements the UK’s climate goals. Specific commitments on seeking plurilateral and multilateral outcomes which support the global green transition will be important to maintaining the UK’s global environmental leadership.

CBI impact

The CBI believes trade policy should always complement our environment strategies and climate goals, whether through ambitious environment chapters or turbocharging our support for green trade and services. The CBI called on the government to work in bilateral and multilateral for a to reduce non-tariff barriers to green trade and services, promote robust sustainability standards, increase access to finance, and improve supply chain transparency.

As a services superpower, expanding trade in services is essential. The government will extend services market access and consult with governments and businesses on expanding Economic Partnership Agreements to include services to maximise two-way trade in services. Moreover, the government has committed to an ongoing workstream with ONS to assess how services trade flows data can be improved.

CBI impact

As a strong advocate for the power of trade in services, the CBI is pleased to see these announcements. The CBI’s Trade in Services Council and our Services Trade Taskforce both repeatedly raised lack of available data on services exports as a longstanding issue for the services sector.