‘Pragmatic patriotism’ drives the UK’s first trade strategy in over 40 years
The Government today launched its new Trade Strategy, the first since the UK left the EU in 2020 and therefore, the first delivered from Westminster and Whitehall in almost half a century. It comes as the UK attempts to steer its own route through some of the most turbulent economic currents in living memory without EU support, while the Labour Party simultaneously tries to assert its agenda against an equally difficult domestic backdrop.
Framed within Labour’s ‘Plan for Change’, the £85bn strategy aims to revitalise the UK’s trade performance, which has been lagging behind that of other G7 nations. Designed to unlock opportunities worth £5bn for UK exporters and expand UK Export Finance (UKEF)’s capacity to £80bn, it seeks to deliver economic growth while aligning with national priorities such as enhancing green energy and supporting small businesses.
In the 100-page document, a joint statement from the Secretary of State for Business and Trade, Jonathan Reynolds MP and the Minister for Trade Policy and Economic Security, Douglas Alexander MP stated that the UK will take a “hard-headed approach” to trade diplomacy. The Strategy seeks to support the economy amid global turbulence stemming from Trump’s tariff wars and is underpinned by a commitment to “pragmatic patriotism,” aiming to boost high-growth sectors while embracing the free market.
Pledging to make the UK “the most connected nation in the world” and to protect vital domestic industries from global shocks, Prime Minister, Keir Starmer declared this morning at the British Chambers of Commerce Annual Conference that the new Strategy is agile, targeted, and responsive to the global landscape.
Policies announced include the Ricardo Fund, named for the British economist who invented modern trade theory and coined the term ‘comparative advantage’. The fund will help UK regulators and overseas teams identify and tackle barriers to trade in services, the UK’s most prized sector, currently worth £500bn. There will also be a focus on mutually recognised professional qualifications and support for SMEs in accessing high-value markets such as Australia, Canada, Japan and India.
Sector-specific deals will also be a key driver of growth while also seeking to protect domestic industries from the threat of cheap imports. The Government is “actively exploring” joining the Digital Economy Partnership Agreement (DEPA), with the goal of making “digital trade faster, cheaper, and easier” and clean energy cooperation with countries such as Brazil and the Philippines is also being considered.
Initial industry response appears broadly positive, with organisations as diverse as HSBC and the TUC welcoming the plan as a crucial move in driving growth and safeguarding jobs. Policy Chair of the Federation of Small Businesses Tina McKenzie said that the Strategy symbolises “the first step to creating a better environment for exporters and importers.”
There has been limited political response from opposition parties, with the Conservatives remaining focused on highlighting the tense atmosphere in the governing party around welfare reforms. Indeed, the positive landing of this major strategy looks at risk of being somewhat over-shadowed by the Government’s ongoing difficulties ahead of next week’s vote.
However, taking a broader look, the Government would argue that it is delivering significant international achievements in the most hostile environment for trade since the Second World War. Today’s announcement follows three trade deals confirmed last month: a deal with the EU, the UK’s largest trading partner, a landmark deal with India, expected to add £4.8bn to the economy, and the unique agreement with the US aimed at protecting the automotive industry.
Today’s Strategy, then, reaffirms that, despite global tensions, the Government remains focused on growth, prioritising the national interest while navigating complex geopolitical realities.
Key Announcements
Export & Trade Support
- Expanding UKEF from £60bn to £80bn to provide more businesses with the financial tools they need to export globally.
- A new “Ricardo Fund” created to identify and remove trade barriers, particularly those that affect SMEs, with an emphasis on improving access to high value markets, such as Australia, Canada, Japan, and India.
- Prioritising the services sector by tackling regulatory barriers, including the lack of mutual recognition of professional qualifications.
Trade Deals & Digital Strategy
- Pursue smaller, sector-specific deals that offer faster and more tangible benefits.
- Deepening relationships with priority markets, including Norway, Japan, and South Korea, and pursuing new, deeper cooperation with markets, such as Brazil, the Philippines and Mexico, focusing on areas like financial services, clean tech, and education.
- Future trade agreements to embed digital trade provisions to ensure cross-border data flows and prohibit unjustified data localisation requirements.
Trade Defence
- All future trade agreements to include strong commitments to environmental and labour standards, with non-regression clauses.
- The Trade Remedies Authority (TRA) will undergo reform to improve its responsiveness to unfair trade practices, including dumping, foreign subsidies, and market distortion.
- Open consultations on additional anti-dumping measures for the steel sector, and formally designate steel as critical to national security, which will enable Government to introduce stronger procurement policies that prioritise UK-made steel.
Global Trade Governance
- The UK will join the Multi-Party Appeal Arbitration Arrangement (MPIA) as a temporary replacement for the WTO appellate body, while broader reforms are underway.