UK needs to reconsider regulatory environment to benefit from ‘shifting’ global trade trends, say senior Conservatives

Senior Conservatives have claimed that global trade is “shifting”, and that the UK should carefully consider its regulatory and tax environment in order to encourage more trade and investment.

Lord Houchen, the mayor of Tees Valley, and Lord Offord of Garvel, the former minister for exports, were among those making these arguments as part of a panel discussion on ‘how to turbo-boost UK trade’ at the Conservative Party Conference yesterday evening.

The event in Birmingham was put on by the Chartered Institute of Export & International Trade in partnership with the Spectator. The magazine’s political editor, Katy Balls, chaired the discussion.

‘North Star’ for trade

The Chartered Institute’s director general, Marco Forgione, highlighted the difficulties faced by British SMEs internationally, but said the UK had an opportunity to tackle trade barriers and take a lead in global trade facilitation.

Noting the challenges faced by trade in general, particularly since the pandemic, he said that there was a need to look at a move away from the current ‘free trade model’ to a more resilient ‘trusted trade’ approach.

He said the UK could be a “north star of redefining how global trade takes place”, citing the opportunity to become a leader in the digitalisation of trade procedures and documentation.

Emerging markets

The increasing digitalisation of trade can, alongside the UK’s post-Brexit new free trade agreements, serve to increase access to emerging markets for British businesses, the panel agreed.

Lord Offord cited the benefits of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the UK is set to complete accession to in December, saying that “trade is shifting and it’s shifting to the East.”

Forgione said that more than 60% of global trade takes place within the Global South and that the UK needed to keep up with this.

“Because of our unique mix of goods and services, as well as our diplomatic heft, we have unique opportunities to lead,” he said.

Victoria Hewson, an independent solicitor and former special advisor who was also on the panel, praised the UK’s end-to-end digital agreements, including its recent agreement with Singapore.

Reconsider regulatory approach

However, Hewson and Houchen were both keen to stress that a more favourable regulatory and tax environment would be needed for the UK to maximise its trade potential.

Hewson said that reduced regulation would enable businesses to better produce the “products and services that people want to buy”, which she argued was “the best way to perform well in international trade”.

Houchen said the UK had a “huge opportunity” to leverage global capital and investment opportunities, with the brand and quality of “UK PLC” respected around the world.

He suggested the UK “look at what’s going on around the world”, citing Texas as an example of a place where significant tax breaks have enabled improved trade performance.

In-market support

Lord Offord also highlighted the important role that the government’s international trade advisors, the UK Export Academy and in-market advisors can play in supporting businesses to engage in overseas markets.

Forgione said that more can be done in this regard, saying “we haven’t seized the opportunities of commercial diplomacy opportunities, where government and industry work together in-market, in order to grow in-market opportunities”.

He cited the example of Business Sweden as an example of how this operates successfully overseas.

‘Real companies’

Lord Offord also said that “we need people to understand why trade is important”, saying that “entrepreneurs are needed”.

He argued that the government needed to focus on SME support in its upcoming Autumn Budget, saying smaller businesses are “real companies in real places employing real people”.

His comments came on the same day that Forgione wrote to chancellor Rachel Reeves urging the Treasury to support SMEs to trade by encouraging trade tech adoption and investing in skills.