Transform Trade Statement on the 2025 UK trade strategy

 

Transform Trade welcomes the fact that the UK now has a trade strategy, setting out Government priorities for the coming years. For the first time since the EU referendum, it will be possible to hold the UK Government to account on its trade policy. However, the strategy lacks the level of ambition that is needed, particularly when it comes to the role that UK trade policy can play in tackling some of the world’s biggest challenges. 

The strategy acknowledges the links between trade and other foreign policy goals and recognises that the benefits of trade have not been evenly distributed. It frames trade as part of an agenda that includes global advocacy for human rights and a commitment to achieve net zero. It also recognises that there is an environmental crisis and that there are tensions between trade and environmental goals. This is very welcome, however, there is very little to indicate what concrete steps the UK will take to advance this joined up agenda.  

Most of the commitments on sustainability remain vague, for example to seek “outcomes in trading frameworks and international agreements... that support sustainable trade and the UK’s domestic agenda” and to maintain “the UK’s global environmental leadership by seeking plurilateral or multilateral outcomes that support the global green transition.” Vague references to international agreements falls far short of what is required in this critical decade for climate action. 

As a result, climate change still feels like an afterthought: it is mentioned just five times in a 100-page document, and when it is mentioned, it is primarily framed as a risk to trade and growth. Where detail is given, it tends to focus on how the UK can secure advantages for its own business. For example, on net zero the strategy refers to the introduction of a carbon border adjustment mechanism (CBAM) to protect UK businesses from more polluting competition, and liberalising trade in environmental goods and services so UK businesses can both sell abroad and access the things they need to produce ‘green goods’.   

Ideas for how more could be done are already available. For example, the UK could incorporate climate waivers into trade deals so that trade could never trump climate action; it could reform its intellectual property and procurement rules to support its commitments under the Paris Climate Agreement, and it could direct Aid for Trade towards agroecological and low-carbon development models. 

Transform Trade welcomes the Government’s commitment to review responsible business conduct and to ‘level the playing field’ for businesses that are trying to do better. However, there is nothing in the strategy to indicate that the Government will seriously consider legal accountability of businesses operating in the UK for human rights abuses in their supply chains. It is particularly worrying to see reference made, in the same section as the review, to the need to reduce the cost of complying with regulation by 25% over the Parliamentary term.  

It has long been clear that voluntary frameworks are insufficient. The Government must commit to introducing a Business, Human Rights and Environment Act, with a focus on effective implementation for rights holders in supply chains. It must also introduce independent regulators to oversee compliance in high-risk sectors, for example a Fashion Watchdog for the garments sector.   

There are some proposals for redressing global inequalities, for example to simplify the Developing Country Trading Scheme (DCTS) and improve cumulation. However, the strategy fails to respond to the calls from the Global South to implement an agenda agreed on more than 20 years ago. It makes no reference to improvements that are needed to the World Trade Organisation’s special safeguard mechanism or plans to meaningfully tackle agricultural subsidies. The commitment to “enhance trade through our Economic Partnership Agreements” is worrying given longstanding concerns about those agreements and the sunset clauses they contain that would require Global South countries to negotiate on issues that are not in their interests. This is also at odds with a commitment made elsewhere to support regional integration through enhanced cumulation: one of the biggest criticisms of EPAs is that they disrupt regional groupings. 

Despite the fact that most of the world’s jobs and a significant amount of the world’s food are delivered by micro and small businesses in the Global South, there is no mention of the important role they play in international trade. This means the UK has made no commitment to improving trade in the interests of huge numbers of people.  

Finally, the strategy does nothing to modernise the UK’s wholly inadequate scrutiny processes. There is no commitment to overhaul the CRAG process, which requires governments to do nothing more than lay a trade agreement before parliament for 21 sitting days, with no commitment to a mandatory debate and vote. This is hugely disappointing, we need is a robust framework that guarantees meaningful parliamentary involvement and public transparency at all stages of negotiations. 

The UK is the world’s sixth largest economy, one of the most globally integrated - trade represents 60% of GDP – and it has a significant colonial history. It therefore has an important responsibility to ensure that trade works for people and planet. The climate crisis, growing inequality and the rise of protectionism demonstrate that the current system is no longer viable.  

The trade strategy falls short of delivering the transformative shift in trade policy that is urgently needed both here and in the Global South. The Government has missed an opportunity to present a strategy that learns from the failures of globalisation and crafts a trade policy rooted in dignity, justice, and equitable partnerships, with local producers and communities at its heart.

If the Government is serious about an approach to trade strategy that is coherent with its other foreign policy goals, it must use its influence to push for a rethink of global rules so that they play their part in achieving the Sustainable Development Goals and tackling the climate crisis.