Britain targets trade deals with India, Gulf states but the US remains notable absentee
New minister set to unveil the government’s international trade strategy and agenda
[LONDON] When the UK parliament reconvenes in the first week of September after its traditional summer recess, Jonathan Reynolds – the new Secretary of State for Business and Trade – is set to unveil the government’s international trade strategy and agenda.
Before lawmakers went on their break at the end of July, Reynolds told the House that restarting trade talks was the first step towards agreeing to “high quality trade deals” to give businesses access to international markets, boost jobs and deliver growth.
“Free trade agreements (FTAs) are not the only tool to drive economic growth through trade. The government also plans to publish a trade strategy which aligns with our industrial strategy,” he said then.
A spokesman for the Department of Business and Trade told The Business Times that it was still too early to disclose details of the global trade policy agenda. He did, however, say that the Labour government under Prime Minister Keir Starmer would “act soon”.
Multiple trade deals in the works
The 43-year-old Reynolds, who was the shadow business secretary when he was in opposition before the Jul 4 general election, was a solicitor before becoming a Labour Member of Parliament in 2010.
Over the years, Reynolds had called for a “strategic approach” to trade negotiations. He had criticised the Conservative government’s attempts to sign as many trade deals as possible and said that the focus should be on “quality over quantity”.
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The Starmer administration has said that it supports most of the deals that were inked when Reynold’s predecessor Kemi Badenoch was in office.
In particular, it favours the UK’s entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership – a trade agreement involving Singapore and 10 other Pacific Rim nations including Australia, Japan and Vietnam.
Shortly after he began this role on Jul 5, Reynolds – who also has a concurrent appointment as president of the Board of Trade – said he will also continue Badenoch’s trade negotiations with India and Israel. There will also be talks with the Gulf Cooperation Council (GCC), South Korea, Switzerland and Turkey, among others.
Talks on an FTA with the six GCC states – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – began in 2022 when the Conservatives were still in power.
As for the US, which remains the UK’s largest individual trading partner, there have not been any talks on a bilateral trade deal as yet. Observers said that the UK government is more likely to wait until after the US presidential elections in November are over before moving forward on any discussions.
Junior minister Alexander on the rise
Douglas Alexander, Minister of State for Trade Policy and Economic Security, has more international experience than Reynolds, having served in the Cabinets of former prime ministers Tony Blair and Gordon Brown between 1997 and 2010.
During those years, the 56-year-old Alexander was Chancellor of the Duchy of Lancaster, Scottish Secretary, Transport Secretary and International Development Secretary.
Some political observers have said that Alexander’s current junior ministerial role is only temporary and he is among those likely to be promoted to be a full minister when Starmer carries out his next Cabinet reshuffle.
In a recent interview with The Financial Times, Alexander said that he wants to forge a much closer trade relationship with the European Union (EU). He claimed that the Conservative government had rushed to sign trade agreements to divert attention from the “sub-standard” Brexit deal.
“Geography still matters with trade so it isn’t a surprise that the EU accounts for 47 per cent of the UK’s total trade,” he said.
Alexander is working alongside Nick Thomas-Symonds, the government’s EU relations minister who’s in charge of negotiations with Brussels.
On this front, the immediate tasks on the agenda include negotiations to reduce barriers on agricultural trade and a mutual UK-EU recognition deal for professional qualifications. Alexander is also seeking new non-tariff rules on the labelling of products.
Not everyone is convinced, however, that Alexander will be able to achieve his aims.
“Trying to get a better trade deal for the UK when we already have a tariff-free treaty means aligning again with laws that hold small business and innovation back. This is not going to deliver any more growth than it did when we were EU members,” said John Redwood, a former trade and industry minister in the former Conservative government.
“The UK is far too dependent on imports of energy and manufactures from the EU. More alignment would increase this dependence.”
A number of business leaders have already come out publicly to say that they will engage the UK government’s trade officials to open more doors for companies.
“We stand ready to work with the Department of Business and Trade,” said Marco Forgione, the director-general of the Chartered Institute of Export & International Trade, a registered charity that turns 90 next year.
“Businesses, particularly small and medium-sized enterprises, should be armed with the know-how to turn opportunities into reality,” he said.
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