Trade and Levelling Up: making a new industrial strategy
London plays an outsize role in UK trade and investment. While there are exporters and specialisms across the country, it is the capital city that dominates inward investment as well as the UK’s services exports. Other parts of the country frequently feel left behind, poorly connected to each other, and far too little consulted.
Trade promotion is a devolved competence, while city-region Mayors such as in Birmingham and Manchester have been cited as playing an active role in attracting inward investment. Freeports have been a visible part of the government’s approach to trade policy. Yet, cumulatively, such efforts are not perceived to be making enough of a difference.
General political agreement that change is needed has not yet proved sufficient to make that happen. Yet without significant growth across the UK, there is always going to be a limit to our trading ambitions.
Questions for discussion
What are the best ways in which UK trade policy can support businesses across the country?
How can the UK government work together with devolved governments and city-region Mayors on trade and investment issues? What can be learnt from efforts to date?
Can greater political engagement and independent oversight drive greater consideration from London of issues across the UK?
Policy Options
Trade Unlocked 2023’s policy partner, the UK Trade and Business Commission, has recently published a comprehensive report containing policy recommendations to the UK Government.
Policy options include to support the levelling up agenda, especially given the location of much of the UK’s manufacturing, the UK Trade and Business Commission recommendation to “maintain regulatory alignment on manufactured products, in particular cars, aircraft, and medical devices with EU standards to facilitate trade and enhance the competitiveness of its manufacturing industries”.
Similarly the proposal that “The UK should align its rules of origin with the pan-Euro-Mediterranean preferential rules of origin to facilitate participation in regional supply chains” is of particular importance.
In terms of overall approach, the UK Trade and Business Commission’s recommendation that “The UK Government should develop a trade strategy including policy trade-offs and agreement priorities” would be expected to include a strong regional perspective.
The report section titled “Integrate with regions and devolved governments” contains the following recommendations:
‘The UK should enhance engagement with devolved governments and city-region mayors to align priorities on trade policy.’
‘The UK should actively seek to attract inward investment for new production facilities across the country.’
‘The UK Board of Trade should ensure that trade deal impact assessments and reports on UK trade policy performance provide strong regional breakdowns to understand the impact on different regions.’
‘The UK should build capacity in public sector organisations across the country to enable constructive engagement with the UK Government on trade policy.’
‘The UK should seek particular provisions in trade agreements to allow Northern Ireland to take full advantage of new export opportunities by allowing for all-Ireland input to count as originating from the UK.’