UK Trade. The New Agenda.
21 June 2021
In our first report we set a four-point agenda for change; this report is the third in the series, and picks up on one of the action points: the need to view the UK’s strategic priorities through a trade lens.
Trade and investment is inseparable from the UK economy at large, and the recent refresh of the GREAT Britain & Northern Ireland campaign by the Prime Minister shows the importance that is being placed on it.
In November 2020, PwC held a UK Trade Summit to develop an agenda for driving trade and investment. We gathered a wide range of different perspectives and ideas from more than 120 senior participants from across the public and private sectors, including representatives from all UK nations and regions, as well as some major international investors from the US, India, China and Europe.
Among participants there was broad support for the Government’s levelling up agenda, recognising that prosperity needs to be shared across all parts of the UK. There was also a clear recognition that the UK needs to rise to the challenge of becoming a net zero economy by 2050, if not earlier, and there was a deep appreciation of the challenge of economic recovery post COVID-19, and ensuring that this recovery is fair and inclusive.
The angle that came out very strongly was the role that trade and investment can play in delivering on these priorities, and in turn the boost that trade and investment would receive from their success. One participant from a global engineering consultancy coined the term “looking through a trade lens”, i.e. considering how trade and investment can contribute to, and benefit from, these critical priorities. If international trade and investment is inseparable from our economy at large, it should be an inseparable part of the solutions to our strategic priorities.
To bring this to life, we have looked at some of the UK’s strategic priorities, and considered what role trade & investment might play in their delivery.
1. Net zero
The transition to net zero is both a climate imperative and a trade opportunity, but we haven’t always got this right in the past, leaving us fighting a rearguard action to encourage foreign manufacturers to invest in the UK, which will rarely realise the same economic benefit as domestic manufacturing. So let’s not make that mistake again, let’s see if we can make it an economic success story as well as an environmental one.
2. ‘Levelling up’
Levelling up is directly aligned to the trade and investment agenda, as exporting companies are more productive and job-creating than businesses which do not export. And foreign-owned businesses are more likely to export than domestic business. So we need to make the link more strongly between trade and investment and levelling up, to drive this virtuous circle in areas of the UK that are perceived to be left behind.
3. Other priorities
It is hard to think of any cross-cutting strategic priority the UK faces that would not benefit from considering how trade and investment might contribute. Further examples include the following: the skills agenda, research and development and supporting small and medium-sized businesses. We believe that if the UK is not looking at these priorities through a trade lens we are missing a big opportunity.