A new global trade regime: Shaping the UK's future

There’s a new global trade regime taking shape and as the world continues to digest the seismic shift following President Trump’s recently introduced tariffs, it’s important for the UK to shape its own destiny and secure beneficial agreements elsewhere.

Compared to other countries, including those in the EU, the UK currently has relatively low tariff levels for some exported goods to the USA, perhaps one of the few recent benefits of Brexit in terms of the differential treatment meted out to the UK compared to the EU. Our government appears to be taking a considered approach to what to do next, having got off to a rocky start in terms of its relationship with the new US regime, with the goal of a Free Trade Agreement with the US perhaps seen as a key objective. However, detail on how the UK will proceed will need to become clear sooner rather than later you’d think, as the news of JLR’s pause of a shipment to the US as they consider their next move will surely not be the last such action from the private sector.

Whilst the US is the world’s largest consumer market, the opportunity to consider how future trade relations with other countries and regions around the world has never been more important. Diversification of trading partners through an increased effort around securing Free Trade Agreements (FTA) will have moved up the ‘to do list’ not just for the UK, but perhaps also for India as an example?

Irwin Mitchell is a strategic partner of The Commonwealth Enterprise & Investment Council (CWEIC), the business arm of the 56 Commonwealth countries, and I recently attended their Commonwealth Trade & Investment Summit at The Mansion House in London. 

With its 2.7bn people and a young demographic, I’ve always been struck by the size of the potential opportunity that exists. It's hard to disagree with Lord Marland, Chairman of the CWEIC, when he said recently, that "With the realignment of world order, there has never been a greater opportunity for trade and business within the Commonwealth." 

But could a Commonwealth FTA be a realistic option? 

The argument in favour of exploring it seems strong as there are some of the world’s largest and fastest growing economies, and significant mineral and natural resources. The size of trade intra-commonwealth is forecast to be $1tn by 2050, and perhaps there will be some leverage in trade negotiations with other economic areas globally would be improved if such an FTA became reality. 

In a recent blog post, I pointed to the UK’s strong ‘Soft Power’ standing globally. The UK's well-earned trust and standing in the global order places us well to help shape a future which is beneficial to the UK and our trading partners not just economically, but also in terms of the maintenance of peace.

At Irwin Mitchell we are busy speaking to our clients to discuss the current challenges, their supply chains and overseas markets, and how our global network of valued contacts can help.