This article is taken from the Autumn 2024 issue of

Think Global People magazine

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The incoming regime undertook to "drive forward trade talks to turbocharge economic growth" by launching a new trade strategy this autumn, with UK businesses and economic growth at its heart."Boosting trade abroad is essential to deliver a strong economy at home,” said Secretary of State for Business and Trade, Jonathan Reynolds. “That’s why I’ve wasted no time taking stock of progress and getting ready to press on with trade talks with our international partners."From the Gulf to India, our trade programme is ambitious and plays to the UK’s strengths to give British businesses access to some of the most exciting economies in the world."This announcement will kick-start the process of getting negotiators back into the room with counterparts as soon as possible, with the first round of trade talks under the new government expected to take place during the autumn."

A deal with India by year’s end?

Aside from hoped-for deals with India and members of the Gulf Cooperation Council (GCC) – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates – the UK hopes to see progress on trade talks with Israel, South Korea, Switzerland and Turkey. Marco Forgione, director-general of the Institute of Export and International Trade in London, described it as "extremely positive" that the new government had initiated trade talks with so many key economies."Making international trade easier and helping more UK businesses expand into international markets is central to getting growth into the economy," he said. "We know there’s real business interest in making international trade easier and we stand ready to work with the department [for Business and Trade] to ensure businesses, particularly SMEs, are armed with the know-how to turn these opportunities into reality."Of course, the biggest prize immediately would be the successful conclusion of protracted talks with India over an FTA, as illustrated by the fact that new Foreign Secretary, David Lammy, opted for a visit to New Delhi for talks with his counterpart almost immediately after taking office in July.But it has been more than two and a half years since Boris Johnson and Narendra Modi agreed in principle to a deal. The ensuing period has seen dozens of detailed discussions on elements of an agreement. And those discussions are continuing, although there is hope – possibly – of a successful conclusion by year's end.The majority of the 26 chapters in the draft agreement have, in fact, been resolved. However, longstanding problems persist, most notably over India’s desire to see the UK granting its citizens a more liberalised visa regime with greater migration and mobility opportunities.Meanwhile, the British are seeking lower Indian tariffs on products like whisky and cars, as well as greater access to the Indian market for their financial and legal services. The UK think-tank, the Observer Research Foundation (ORF), commented: "Most issues have either been resolved or are in advanced stages. Yet longstanding areas of contention persist. Former (Conservative) Home Secretary Suella Braverman set back talks last year with her remarks on Indian migrants constituting the largest number of visa overstayers in the UK. A Labour government, less encumbered by the immigration rhetoric that hamstrung the Tories, offers a clearer path to resolving this issue."On the UK’s part, it seeks a lowering of Indian tariffs on goods such as whisky and cars, currently at almost 100–150%. Britain also wants greater access to the Indian market for its financial, legal and other services, which account for 80% of the British economy – a challenge for India amidst fears of an influx of foreign competition."An issue that has more recently emerged for New Delhi centres around financial burdens, such as paying for national insurance despite being ineligible for UK social security benefits, placed on Indians working temporarily in the UK. Such issues highlight the broader challenge of balancing domestic policies with global trade ambitions."Still, according to Natarajan Chandrasekaran, chairman of the Tata Group, there are reasons for optimism, saying he was "delighted" that the new UK government had moved so quickly to restart trade negotiations with India."As one of the largest international investors in the UK, the Tata Group supports any action that strengthens the British economy," he said. "And as two of the world’s greatest trading nations with deep historical ties, India and the UK should be close economic partners, to the benefit of the citizens and businesses of both countries." 

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Alignment on social and environmental issues

Meanwhile, negotiations with the GCC – which started more than two years ago – are continuing. The issue has prompted domestic controversy recently after the House of Commons International Trade Committee produced a report calling for the scrapping of any trade deal because of concerns over human rights abuses in the Gulf states.Concerns voiced by the all-party committee included “the continued repression of women, the repression of the rights of LGBTQ+ individuals, and a crackdown on activists and the civic space”.“We urge the UK government to be openly prepared to end the negotiations rather than accept an unsatisfactory agreement,” said the parliamentary report, which also called for any trade deal to include undertakings by the GCC to commit its members to decarbonisation policies.Responding to the committee, the government – which believes an FTA with the Gulf states could boost the UK economy by up to $1.6 billion a year – maintained that Britain was a “leading advocate for human rights”, but free trade agreements were "not generally the most effective or targeted tool to advance human rights issues”.Closer to home, the new Labour government is keen to pursue ties with its primary trading partner: the European Union. In a recent interview with the ‘Financial Times’, Douglas Alexander, the junior trade minister, said he wants to forge a much closer trade relationship with Brussels.Describing the Conservatives' Brexit deal as "sub-standard", he said: "Geography still matters with trade so it isn’t a surprise that the EU accounts for 47% of the UK’s total trade." His immediate aims include a deal with the EU on the mutual recognition of professional qualifications; a reduction in barriers to agricultural trade; and new, non-tariff rules on the labelling of products.Of course, one potentially important trade deal is virtually in the bag: the UK's membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – a trade bloc currently consisting of Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Ratification of the UK's membership became a reality at the end of August when Peru became the sixth member nation to give its approval to the UK's application, virtually assuring that Britain would, by the end of this year, become the first European country to join the free trade bloc.Although analysts do not believe membership will have a huge impact on the UK's economic fortunes in the short term, there is more optimism about the long-term prospects of accessing a market of more than a half a billion people. Trade Secretary, Jonathan Reynolds, told the ‘Observer’ newspaper that joining the CPTPP would represent a "real win for big-hitting British exporters", as well as boosting the prospects of smaller businesses keen to break into Pacific Rim markets for the first time.Marco Forgione said that membership of the CPTPP marked an important stage in the UK’s trading future. "British businesses now have tariff-free access to some of the fastest-growing markets in the world to sell our goods and our world-leading services. This is an opportunity which can help reshape the UK economy.“At a time when global trade has been weaponised, this partnership can help the UK establish resilient and robust supply chains across Southeast Asia, Central and South America. In a world of growing geopolitical uncertainty, the expanding trading community of CPTPP nations offers an important counterpoint."The outstanding question now though is if this agreement generates contentment among UK exporters, then what sort of delirious response would that most cherished – and most elusive – FTA of them all generate...A trade deal with the US? That remains to be seen.

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