International Agreements Committee

Tuesday 20th October 2026

(began 15 hours, 39 minutes ago)

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None Portrait Speaker 1
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Yes. Thanks very much for the question, and thank you very much for the opportunity to give evidence. So as TUC, we very much welcomed the approach flagged in the trade strategy, where the government said it would seek strong labour provisions with trading partners and engage with those trading partners to hold the UK government to those commitments. It's fundamentally important to trade unions that we have strong, enforceable Labour commitments in trade agreements to make sure we have fair trade, and countries are not gaining an unfair advantage on the basis of exploitation of workers. With the approach with the UK, EU negotiations and the reset that the government launched, I think we very much see that approach put into action, where the government has a trading partner with the EU that upholds very high standards on workers rights, and with the UK, EU agreement, we got a path breaking commitment, what was called the level playing field commitment, whereby both parties agreed that they would hold workers rights to the level they were at in 2020 and not regress from those.



















































































 And if they did regress, there would be a sanctions mechanism levied. So that's a very, very welcome approach. That was a result of trade union lobbying, I should say, on the UK and EU side for many years. So that agreement being in place was a huge step forward. And the fact that the UK government now is in the process of building a closer relationship with the EU is very welcome to the TUC, because the government has been clear that closer relationship would be founded on mutual high standards of workers rights, and we would want the UK to commit to implement any improvement made in the EU.



































































 So that's been a very welcome approach. And also with the UK's trade agreement with Switzerland, that labour provision in that trade agreement was also subject to dispute settlement. So that has showed that the government is also able to implement sanctions mechanism for Labour commitments with a non-EU trading partner. It's also been very welcome that the government has engaged closely with trade unions in its approach towards trade negotiations and trade policy, which is an important break from the past, and we are involved in the UK government's Domestic Advisory group for the UK, EU and Trade and Sustainable Development, and also the Trade and Labour Forum.



















































It should be said that UK trade unions are not yet consulted on the text of trade negotiations, and that's somewhere where we think the government should go further so that we can fully inform the negotiations with the needs of working people, and we would want there to be a role for Parliament, because we know you are all not consulted on the text of trade negotiations either. So we would want that increased scrutiny as well. Just to pick up on some areas where we think there isn't enough consistency, though, with the approach flagged in the trade strategy about seeking high standards of labour protection, the government has concluded trade agreements with partners where we have concerns, in particular the Gulf states and Vietnam, which is one of the Cptpp countries where trade unions are banned.







































In Vietnam, independent trade unions are banned and half of the Gulf states independent trade unions are banned. And we are concerned that in both those trade agreements, Cptpp and the Gulf States agreement, there is no effective enforcement for the labour clause in those agreements. Also to mention that we are concerned about trade agreements with India and South Korea, where there's also widespread repression, labour rights. So we think the government can do more to actually put their commitments into practice. And then just to flag that, while we're really very much welcome, the approach around steel with the steel strategy, we do have some concerns that good jobs are being undermined by the tariff free quota that's been set, particularly for India and South Korea and Vietnam, because that's allowing too many cheap imports to come in.























 And that also undermines good jobs. So we think there's some areas for improvement there. And we also have concerns about investor state dispute settlement undermining government's ability to act in the public interest and to do things like improve workers rights, bring public services back into national ownership, because, of course, members of the committee will know that ISDs allows for governments to be sued by companies for actions like Renationalising public services, and is indeed subject to three ISDs cases currently that I'm sure will come on to. So we would want ISDs written out of all trade agreements and the commitment made as Australia has done, that there would be no ICS in future trade agreements.









 So there are areas we would want to improve. But as I say, there's much better engagement from this government than the previous government with trade unions. And so we are hoping that we can do more to make that that commitment in the trade strategy around high labour standards a reality.
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None Portrait Speaker 2
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Thank you very much for having me here on development. Based on our work at the Institute of Development Studies and University of Sussex, I'd like to talk specifically about how the UK has provided support strengthening developing countries participation in trade. This has been through UK's Trade and Investment Advocacy Fund, which has been running since 2011. It provides specifically trade and investment negotiation support to developing countries as we know that it can be really challenging to negotiate effectively due to costs. Practical, resource based operational costs. Many developing countries struggle to play a full role, and many have, you know, bare bones operations in Geneva at the WTO.





















































































 Our research suggests that specifically, the negotiations window of the Trade and Investment Advocacy Fund has been effective and has proven good value for money. It has been unique in addressing the imbalance of resources and the imbalance in the influence between developed and developing countries. It has worked on developing countries capacity to negotiate, and has been most effective in helping solidify negotiating positions. Now, we all know that negotiating outcomes are inevitably product of multiple factors, but very specific contributions can be tracked down to negotiating texts that have either maintained or advanced the interests of developing countries.





































































So this is good, and we would advocate for this support to continue. Second, UK trade policy has improved market access or in many cases provided continuity. UK's Unilateral Preferential Market Access Scheme, or the Dcts, which is Developing Countries Trading scheme since 2023, has made it easier and cheaper for developing countries to export to the UK. The objective has been to stimulate trade but with a vision to promote growth, support economic transformation and help reduce poverty. Just to say that Dcts can support developing country exports, however, it can also lower costs for UK businesses. Our research has found early positive signs that Dcts is succeeding in encouraging developing countries to make greater use of these trade preferences, and this translates into higher tariff savings, post-Brexit free trade agreements and the economic partnership agreements are also preserving preferential access.

















































 My third point is that UK trade policies and programmes certainly articulate very strong commitments to inclusion and gender equality. UK supports International Trade Center's programme. She Trades, which works with women entrepreneurs and this is a very strong, powerful case. Export credit arrangements for example, UK Export Finance explicitly links its sustainability strategy to positive impacts in developing markets. And there's the UK New Zealand FTA as well as the UK India FTA, which is focused on trade and development and labour provisions. However, that's the positive story, but what we find is that there's a lack of coherence.































There is no effective sort of integration of inclusion and sustainability goals. What do I mean by that? You look at these ambitions often in trade agreements, but are they very closely linked with trade and development programmes that sometimes run in the same countries? That remains an open question. Sometimes short term commercial interests can dominate and LDCs receiving enough of sufficient priority as well as the issue of LDC graduation, is an important one. More fundamentally, I'd like to argue that commitments alone do not demonstrate improvements in development goals or, for that matter, inclusive growth. So we need to think very carefully about how funded implementation and meaningful participation by business organisations.













Work organisations can go side by side with evaluating distribution out outcomes. So where are the gains and where are the losses. And how can we really connect these trade preferences that are being utilised with very targeted interventions in a context where aid is, you know, has gone down, there are eight cuts. So how do we make sure that the support that the UK does provide is targeted to our preference users? Thank you.
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None Portrait Speaker 3
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Thank you and thanks for the invitation to appear today. I think similar to my fellow panellists, the positives have been rhetoric and the area for improvement has been delivery. So in the trade strategy released last year, again as a result of advocacy from charities, trade unions and members of the trade justice movement, the government recognised explicitly for the first time that trade doesn't exist as a kind of set of commercial relationships in some kind of vacuum, but rather has important consequences to labour rights, to emissions, to international relations. A couple of quotes to pick out from the trade strategy that particularly reflected our analysis.





















































 The government said that trade can, absent safeguards, blow away important protections regarding the environment, working conditions or product standards, so recognised that alongside free trade we need a shared set of fundamental social and environmental standards. If we're not going to see trade being used as a kind of engine for pushing rights and standards protections down. Another quote trade policy is one expression of the UK's international agenda and the strategy links to environmental protections, labour rights, corporate accountability and human rights. So all of that is very positive. We're yet to see how that very strong and mature analysis actually impacts or shapes what appears in UK trade agreements.





































 And since the trade strategy was published, as Rosa said, we've had flagship free trade agreements announced with India and with the Gulf Cooperation Council with India. There was a Labour chapter, an environment chapter, various provisions. None of them were actually subject to the dispute settlement provisions within the trade agreements. So essentially, they are kind of second class citizens within the structure of the trade agreement. And they are, to all intents and purposes, not enforceable. They're warm words. They perhaps express a direction of travel, but they don't actually have any utility for governments or for campaigners looking to protect rights or the environment in the case of the GCC agreement, while we haven't yet seen the full text, the government has released chapter by chapter summaries and in the General Collaboration and Sustainable Development chapter.



















 While again there are bits of language covering labour rights, covering environmental protections covering climate action, none of that is subject to the dispute settlement provisions. And what's more, it also seems to not be subject to not apply at all to the United Arab Emirates, which demonstrates this kind of extraordinary position where the UK on one side is saying that it understands that trade policy is a expression of the UK's international agenda on protecting labour rights. But yet, when it comes down to it, is content not to apply even the weakest labour provisions to a country where 88% of the population are migrant workers operating in the kafala system.





So I think some really concerning disconnects between rhetoric and delivery that hopefully the government will be able to make good on in the next trade policy steps that it takes.
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None Portrait Speaker 1
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Yeah. I mean, if I could come in on that, we do work through the International Trade Union Confederation that we're a member of, and with trade unions in Global South countries around the multilateral trade environment and the WTO in particular. And we know there's really existential challenges facing the WTO. Obviously, the US has been blocking the appellate body for a number of years. But then more recently, the Trump administration, really severe threats posed from them as well. We know that there's severe reform needed from the WTO, and we think there's potential through that body. We talk to Global South Partners.



























































 And we asked them, do you just want no WTO? And they say, no, there needs to be a global framework, but it has to be a framework that is founded on the principle of fair trade. And that means for the trade union movement, labor standards need to be embedded within WTO rules. They haven't since the organization was founded over 30 years ago. And that has meant you have members like China. It's not the only member, but it is one of the most significant members where independent trade unions are also banned, which means they also gain an unfair competitive advantage because one of the ways they can hold down prices is workers are not legally able to strike for better pay or conditions.













































 So for us, you need to have binding labour rights commitments within WTO rules. And for us, we also need to see more flexibilities allowed for global South countries to be able to invest in decent jobs. That means flexibilities around the subsidy rules, around the Trips rules and around technology transfer , and the rules around special, special and differential treatment for developing countries too. Because global South countries have not been allowed to invest in the industries that they need, the clean industries as well to have decent jobs. So they need to have the flexibility that essentially global North countries have been able to have because of power asymmetries.



























 There's there are other improvements we want to see as well, including a trade and decent work working group set up at the ILO, which involves trade unions. Because we've been historically shut out of negotiations at the WTO, which has meant that there haven't been enough initiatives to promote decent work. And on the issue around the e-commerce moratorium, which was a big issue at the WTO ministerial, we would want an end to that moratorium so that Global South countries in particular, can collect the revenue. That's often very much needed for the public purse from digital transactions.













And just on the issue of public health, which is obviously not just a workers issue, but does affect workers, we would want to see an extension of the suspension of the IP rules that were applied on the Covid vaccines to other vaccines for life saving medicines, because we need that as an issue of a public health concern. So there are reforms that are needed, and obviously the appellate body, we need to get over that block. And the UK government has shown a leadership role. WTO and at the last ministerial was taking a leadership role. We would like to see the UK government using that leadership role to press for those changes that the global union movement is calling for around the multilateral trading system, and unblock the appellate body so that we can actually make it function again.
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None Portrait Speaker 2
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Yeah, yeah.
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None Portrait Speaker 1
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Sorry.
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None Portrait Speaker 2
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Thank you. I didn't mean to interrupt, but yeah, thank you for the question. I think that's that's really a critical question because so the I was I was talking about the the UK's preferential tariff scheme, which is the developing country trading scheme. And you know, how the UK has facilitated market access. But your point is well taken. Market access is not market participation. You know, investments in productive capacity in countries if that's absent, you know, countries are not going to be able to utilise those preferences. And the reality is that, you know, we can't talk about improvement in aggregate utilization of preferences through trade agreements, through trade preference schemes.































But the reality is that the distributional outcomes of such liberalisation are rarely uniform. If you look across products and country level and we unpack that, there's much greater variation. So if we think about, for example, textiles and garments, of course there's a concentration. You know, these are heavily imported under the trade preference scheme. For instance, Bangladesh, there's also, you know, a quite close links with what's happening in the UK with East Midlands businesses. You know, it improves competitive sourcing. However, to actually expand the possibility to utilize those preferences requires investments and targeted support in building productive capacity in developing countries.













 So we can further, you know, preferences and we can make those available. But unless those trade agreements are matched up by sort of, you know, meaningful support and targeted assistance at a time when, you know, aid cuts are quite severe, I think the gap will remain and the disconnect will remain. And so I think the challenge and the goal for development policy in trade right now is how do we address that disconnect? How do we make sure that we get the bang from our buck, which is available through development cooperation?
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None Portrait Speaker 2
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I'd like to answer the second question, the more general question, if that's okay, and I'm sure my colleagues might want to come in on your first part of the question. So just thinking about, you know, the global trading system, just like to start with the point that that is not just the WTO. It is spread into a series of interconnected agreements, and that's at different levels. So strengthening the global trading system as such, you know, requires building and defending coherence and coordination. Trade agreements need feet on the ground. We have to be at the table to ensure that cooperation then turns them into opportunities.



















































So if you're thinking about the WTO specifically, the UK should certainly prioritise a fair rules based trading system. And this requires, as my colleagues have pointed out, effective WTO dispute settlement through the Trade Advocacy Fund. The UK is already helping developing countries, and it is really important that we continue that, because negotiating on an equal footing can make the system fairer. Yes, but it also helps to for the system to run more smoothly, helping developing countries, negotiating partners, conduct the right kind of analysis and having informed stances rather can, you know, avert the case where they just say no.







































 Second, the UK should make development a substantive part of the WTO reform, we would argue, and this is with commitments matched by resources. So while developing countries need a voice in negotiations, but the capacity to implement agreements, talking about productive capacity has to be matched by implementation capacity. So one thing which is really critical in this is the appropriate balance of support at Geneva and country levels. Often we find that Geneva focused support is economically efficient. But the trade off is that it can exacerbate a capacity imbalance between Geneva and national capitals, and that could lead to negotiated agreements failing to reflect domestic needs and political realities.

























 My third point is really just a reality check, which is, yes. And this was a question from before the ongoing lack of progress, you know, and the likely future geopolitical directions could limit what engagement at the WTO could achieve. So I think we should, of course, continue to take part, not least because, of course, the opportunity costs of not doing so are very high. But it is also, you know, given the challenging context, it is also a chance for us to think what could be done with a constrained budget by spending where it counts, to ensure that the UK continues to kind of exert lasting influence.







We should see if support may be better directed at specific negotiations alongside the WTO. So this could be the AfCFTA or with Asean countries, and this has been done in previous trade advocacy fund programming. So identifying very specific areas of support combined with supporting developing countries at the WTO is quite important because the opportunity for impact might be much greater sometimes in these cases.
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None Portrait Speaker 1
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Yeah. And if I might build on on that last point that Amrita made, we think it's very important that the government has increased the funding around the aid for trade and increased that support at the WTO level for trade union or for government capacity in terms of influencing those negotiations. But for us also, as Amrita says, country level capacity building and capacity building for trade unions specifically is something we would want to see the government have a fund to support, which we had under the previous Labour government up to 2010, the government was funding trade unions through capacity building, including in the area around influencing trade negotiations.

























That funding was cut in 2010 by the coalition government and has not yet been restored. But we are engaging with the government about possibilities for restoring that funding, albeit we know it's a difficult financial climate, but it's not a large amount of money that actually creates a huge outcome. When you think about increasing union capacity to influence trade negotiations, means you have the concerns and the needs of workers who are going to be affected by this agreement adequately affected in the agreement. And as TUC, we have done self-funded projects with unions to build capacity. That's had a real impact.















For example, in Cameroon on the a C FTA continental trade agreement, we funded a project which increased their capacity to influence negotiations, and that has mean that labor considerations and the needs of workers in Cameroon have been factored into negotiations to a much greater extent than they would have done if trade unions hadn't had that capacity support. So we would like the government to direct support also to trade union capacity building in its in its aid spend as a way to reinforce the role of workers, to have their voices heard and to influence the multilateral trading rules.





 I covered quite a lot of the multilateral trading asks in the previous question, so I might not go into those.
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None Portrait Speaker 2
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I was going to add to that to say that, you know, there are also instances which there is a good sort of basis for deeper cooperation. For example, the Cariforum UK, EPA it already includes services, intellectual property and procurement. So while I think there, you know, starting from the point of continuity is good, having the basis for deeper cooperation, I think is is promising. However, I'd like to qualify that saying that, you know, distributional consequences of such liberalisation need to be really unpacked. And in this sense, I think there needs to be greater operational way to development.

































































I think that's really critical because unless you are connecting evidence generation with accountability, there is a gap. And actually the UK did make some headway on this. A lot of us will remember the Independent Commission of Aid Impact Review of UK's aid for trade. As a response to that, the foreign, Commonwealth Development Office announced the Evidence and Innovation Programme. Unfortunately, that program was cancelled after one year of being in operation. That programme was meant to provide independent evidence informing the distributional consequences, both ex ante and ex post, of several trade agreements. So what would be the agenda going forward is is, I think, an important one on how we take that evidence generation.

















































 Because your point about how does the Fcdo work together with different departments is an important one, and that's exactly what this programme was set out to do in response to the Icai review, which pointed out to these gaps. As you have rightly pointed to, the second point, I'd just like to say is that, you know, I think in my assessment, the UK does give development meaningful recognition and its trade policy. But is there sufficient weight to ensuring that those commitments translate to economic outcomes? I think that's an open question. And in a context where, you know, we are seeing some risks, right?





































 So the UK has cut Oda overseas development assistance substantively, right. So bilateral trade aid to Africa has fallen back to 1970s levels, and that might make several African governments less well disposed to the UK. So that's a risk to consider. On balance. Yes. The UK is seeking out agreements with, you know, so-called middle powers. But, you know, on balance what's going to happen with these developed countries. I think that's also a very important risk to think about, because this will might work against development objectives on its own outside the EU. Yes. The UK is small and less important in a sense in the overall scheme of things, but it is important and difficult to advance interests either in trade or development, without being sort of seen, as you know, in collaboration with the EU.















 However, just to say that it is important that we connect trade agreements with funded implementation, the links made to complementary policies, be it investment agreements, I think that's a low hanging fruit. That's something that we can do even with, you know, like not too many resources and a programme which can generate evidence consistently working with the Fcdo, providing links across different departments, I think would speak to your question about how do we make those institutional links and this would support, you know, a strategy like that would support UK interests by strengthening trade institutions and reducing uncertainty, which would speak for commercial interests, but which would also have development impact.
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None Portrait Speaker 4
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I wonder.
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None Portrait Speaker 3
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Yeah. Thank you. And absolutely, we're seeing a shift away from these traditional comprehensive, all singing, all dancing free trade agreements towards different types of trade instruments. I guess two things to say on, on that trend. One is that where agreements do contain binding provisions on tariffs or quotas or standards, our position is that they should also contain equivalent binding provisions on labour and environmental standards. And that's a kind of core precept of everything that we argue for. And, you know, ultimately is the way of delivering trade that is sustainable and resilient and values driven. There's also a democratic deficit that we are at risk of here as we move away from the processes, which, in our view, were inadequate of understanding, scrutinising and approving free trade agreements.

















































 We're moving into a bit of a a wild West. The UK in the last few years has finalised 16 critical minerals agreements with partners around the world, with finalised three separate agreements with Trump's America. None of those are binding traditional free trade agreements. They are all interesting, important, potentially deeply consequential to our economy and our society. But none have had any kind of scrutiny from parliamentarians. They have not been subject to debate, to amendment. They have not been subject to approval or any vote. And that seems a huge kind of democratic problem. And I guess the clearest indication of why that's a problem is the UK, US pharmaceutical agreement from last December that was agreed with Trump, as committee members will know, entails the NHS making changes to the prices that we were willing to pay for US medicines and, according to some very credible academic analysis, could lead to 229,000 excess deaths by 2035.





















 So that's more than the whole Covid pandemic in the UK. It was never subject to any kind of parliamentary discussion or debate. And what we're now seeing is, over the last couple of weeks is six parliamentary committee chairs in the Commons, writing to the government, writing to the now. The now has started its own investigation into that agreement. So it's taken 11 months, but we're starting to develop some kind of slightly ad hoc processes to hold the government to account for this. That's obviously not a sustainable model for how we should be scrutinising agreements going forward.

And so we do need to update our democratic processes to ensure that whether our relevant agreements, we ensure that they're properly scrutinised by parliamentarians.
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None Portrait Speaker 1
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Yes. So I mean, TUC, we share the concerns that PJM has outlined about the lack of scrutiny around the UK, US agreements and also the critical minerals agreements for us. The UK US agreement has created a lot of uncertainty for the unions in the manufacturing sectors that we were talking about earlier, in particular pharmaceuticals agreement, not having a legally binding nature around it means that there is a lot of uncertainty for the members about what that commitment means. And there's also uncertainty in other sectors as well. So I think for us, it's quite a worrying trend to be going into this area of kind of non-binding and non-legally binding agreement.





























So we would want to see legally binding commitments, particularly when it comes to labour standards, but not not just in that area. And on the critical minerals agreements. We are concerned that they haven't been focusing on the appalling labour rights conditions that are often in the mineral extraction sectors, and they also don't consider the issue that we were looking at earlier about value addition. And we would want to see those factors in and them being made legally binding and subject to trade union scrutiny. But I should say, to go back to the earlier point about the UK, EU negotiations, I think that's a completely different approach that the government is taking where they're obviously, we will anticipate legislation in Parliament to give legal effect to what is agreed at the UK EU summit and any future agreement that's made with the EU.











 And that's been a very comprehensive approach. And, as I say, an approach that involves trade unions as well as businesses and other stakeholders. So and it is our most important trading partner. So I think that that has been a very welcome approach that we, as TUC, would want the government to be building on more rather than non-binding agreements, which have created more uncertainty and no strong commitments on on labour rights.
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None Portrait Speaker 5
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Thank you.
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None Portrait Speaker 3
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So yeah, it won't surprise you to hear me say that. I think the balance is currently struck extremely poorly. And that is particularly relevant when it comes to the UK's 80 agreements that contain investor state dispute settlement. Rose mentioned earlier ISDs offers investors an avenue to sue their host state for compensation if they're able to convince the tribunal of three private lawyers that public policy decisions made by that state have unfairly damaged the value of their investment. And our position as the trade justice movement is that in privileging the protections given to investors to continue to make a profit over the freedoms afforded to democratic governments to enact policies in the public interest, ISDs really strikes that balance poorly.























































 The UK takes a case by case basis position on ISDs, which is a frustration given the arguments in favor of ISDs now seem remarkably kind of defunct. So the arguments in favour of ISDs that have been put forward by by government officials and ministers in recent years, kind of, I guess, rotate around two key points. One is that it encourages foreign direct investment that might seem to make logical sense. An investment agreement leads to investment, but actually it's not backed up by any academic analysis. And the most exhaustive academic analysis, one of 74 separate studies that was produced in 2022, found that the impact of ISDs on foreign direct investment was so small as to be considered zero, so there is no upside.









































 However, the UK also argued for years that it had never been sued and therefore was only a beneficiary of the ISDs system. That again is now a defunct argument. Over the last 18 months, the UK now faces three ISDs lawsuits, which kind of between them perfectly demonstrate the kind of absurdity and anti-democratic nature of this system. One is from the investors behind the proposed coal mine in west Cumbria that was had its permissions rejected in the High Court, and the investors have come back saying that they were unfairly treated, asking for 300 million from the government in compensation for a mine that does not exist and never had the permissions to go ahead.

























 We're facing a ISDs case from a Russian oligarch, Mikhail Fridman, one of the richest men in Russia, and he's contesting the sanctions that were placed on him after Russia's full scale invasion of Ukraine. We don't know how much he's suing the UK state for, but he has a separate claim against Luxembourg for 16 billion USD, which is more than his entire net worth and half of that country's national expenditure that has actually caused the EU to take Fridman off the sanctions list. So the threat of an ISDs claim has led to this extraordinary situation in which the EU has rewritten its whole sanctions policy, which demonstrates the kind of power that this system gives to investors over, ultimately, national security policy in the EU.







 The third case is a threatened case being brought by the Chinese steel company Jingye, relating to the bringing of the Scunthorpe steelworks into public control. And that's reported a billion.
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None Portrait Speaker 3
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It, there's not .
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None Portrait Speaker 5
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Hopeful that we can .
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None Portrait Speaker 5
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With that .
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None Portrait Speaker 5
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Ensuring that .
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None Portrait Speaker 5
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We should pursue .
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None Portrait Speaker 5
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Could .
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None Portrait Speaker 5
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Manufacturers,
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None Portrait Speaker 5
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The .
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None Portrait Speaker 5
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We .
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None Portrait Speaker 5
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Goods and goods.
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None Portrait Speaker 5
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Trade tools.
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None Portrait Speaker 5
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Yes. Turn it off.
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None Portrait Speaker 4
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Okay. Don't touch .
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None Portrait Speaker 8
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Others and what about other sectors that you represent? Yes, definitely. So UK manufacturers generally favor kind of more binding agreements because they provide kind of long term certainty. They can look at investment. opportunities much longer into the into the future. However, there is an. increasingly obviously, as we all know, in fast moving global environment and actually, by the time it takes to start. negotiating an FTA and then implement the FTA, things have moved on. So they all play a really, really important part. I would say that the binding FTAs, we can't understate the importance of them.





































































 For example, they give they open up market access on a much wider, a much wider scale. If we look at something like the new India FTA that's just gone into force, our members are very excited about some of the opportunities that that that brings in a wide range of sectors. I mean, straight away you're only looking at tariff reductions in things like alcohol in in medical devices, in aerospace, all that kind of stuff. But it was also an agreement that will get better over time. So each year we're going to have more market access on a range of a range of products as well.























































 Cptpp is obviously quite a useful agreement that we're looking into as well. This also opens up markets and some of those fast, fast growing markets of places in Asia and all those kind of things. And the best thing about this is it kind of it, it keeps developing. So it keeps expanding. So we we're on the ground. We're on the ground floor of that as well. You know, we're really looking forward to the the inclusion potentially of Indonesia and the Philippines in, in that agreement as well. When you look at other kind of FTAs, we have a big focus on the.





































 Australia and New Zealand FTAs. These are obviously the first FTAs that came into into force after the UK left the European Union. What's great about Australia is it took incredibly fast to negotiate, which was a lot of relief for manufacturers. You know, the India FTA took four and a half years from the start of negotiations till implementation. Earlier this year, Australia took three, for example. We hope that things like. Cptpp as well could also be that quick. I think it took the UK three and a half years from starting, but it would get faster as the accession process kind of comes more into more familiar, I guess, with the bloc in terms of the kind of other other agreements we could be looking at to looking into, obviously FTAs aren't the answer for everything.



















 So we had the. negotiations to update the UK. Canadian FTA a few years ago, obviously stalled on the issue of a food a food standards, but there is an opportunity again, to use more sector specific agreements. So, for example, if we can't get across the line because there's a red line in food standards, we can look at critical minerals or agreement on energy. Specifically with things going on in the Middle East. It could be quite could be quite useful with Canada. We're also very similar partners, same with Australia. So it would take hopefully a lot quicker to negotiate something than .
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None Portrait Speaker 8
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About how that trade policy itself could change, which would benefit? Definitely. So of course, the the actual policy which is being implemented and being created is fantastic. We, we think that the market access obviously matters a lot. And whether it's an FTA or whether it's a sector agreement, it's massively helpful. But if businesses aren't aware or able to understand what these what these what these things are. And we also have lower maybe have lower. competitiveness than our fellow competitors around Europe or North America, then they can't fully be utilized. So therefore, there are some areas which we think that policy could be used to help exports grow.





















































 So the first one would be around improving FTA utilization. So this would be around trying to work with industry and government collaboratively. collaboratively to try and increase the awareness of FTA, awareness of other trade, other trade tools. A lot of businesses are still unaware of some of the advantages that they have, or there's. complexity with the customs or the documentation. We also think that the guidance that they, they, they get from from the government is firstly fantastic. But also it comes too late. It comes in entry into force. If we had it six months before or three months before, because we're aware it's going to come into force that date or soon, businesses can start to look at exporting from from day one.





























 And that may that may help with the kind of lag that you have after signing an FTA, which takes a while for those effects to fully come into or sorry, fully to come into effect. We also think another big barrier in the kind of export support is access to finance. So that's why we're very supportive of the UK export finance and. potentially looking at increasing their their lending. capacity as well. I think. So signing agreement in kind of conclusion on that signing agreement should be viewed as kind of the start of implementation process rather than the end of it.













 We also think that, you know, we need to look not just at trade policy, but also domestic policy because they're very interlinked. So we can't look at trade policy through a single lens. So trade agreements improve market access. But actually if the domestic policy doesn't support. manufacturing and support the competitors to.
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None Portrait Speaker 8
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Then they won't be able to take advantage of those opportunities. For example, the, the, the UK has the highest energy industrial energy price in the G7 caused by obviously a lot of other factors externally, but also internally. So the UK funds environmental and social levies through electricity bills rather than general taxation. So adding around 20% to the costs of electricity for manufacturers. So this increase in energy prices for manufacturers and it hurts competition. And this has led to the UK having on average a. 46% higher energy industrial energy costs than advanced economies. We believe these costs should be funded through general taxation to reduce energy bills and support industry.























































 So although trade agreements can create the opportunities abroad, we need to make sure that businesses remain competitive at home so we can so we can remain competitive as broad as well. I think, thirdly, the stability and predictability is one of the most important things for manufacturers. You can look at us changing their trade policy every few months, but actually, sorry, you can look at the higher tariffs the US have put in onto their onto onto their market. But actually what what businesses diseases with. predictability and stability. So we can get that long term investment long term plans going forward.







































 And what we find that's really good with these is free trade agreements because they, they, they put on paper binding, you know, 10 to 20 years time. We can look at some of the some of the areas we can invest or businesses can invest in. There's other. unilateral measures that the UK could follow. So a review of the global tariff would also be helpful. So without importing a lot of a lot of businesses can't export. Obviously the UK doesn't produce everything in the world and we can't due to climate or or anything like that. So reducing the.





















 Or just looking again at the global the UK global tariff will help us potentially make. inputs more competitive and then the leading to more competitive exports. I think the last thing sorry, I know that's a lot is more of a general one around increasing diversification. So we can use all the trade tools within our disposal. FTAs, non-binding agreements set to specific agreements as well to try and increase diversification, not just on exporting but also importing. And obviously things like. Cptpp is vital to that as that's going to keep expanding as well. So just for the UK to keep an active role in, in looking at other.
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None Portrait Speaker 8
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Hearing about and learning from and indeed implementing. Yeah. So for example, I mentioned earlier around the UK, Australia FTA, the Australia has done fantastic when it comes to promoting their free trade agreement with the UK. You've already seen that with the huge increase in exports over the last few years, they've got a fantastic online. website which looks at everything that you could possibly want to know about Australia, UK trade, which manufacturers and or anyone can go on to and see what the opportunities are, for example. And actually, to be fair to the UK Civil Service and BIS, they've also been been really good at trying to look at export export guides as well.



























 What we're missing though is we're looking at the import aspect. There's no guidance for. manufacturers to import from these markets as well. I think they've started doing small sections, but there's so much more we can be doing. And like I said before, without imports, a lot of the time there aren't exports. The EU also have a very good online system where they're looking at specific markets and some opportunities that they could have. So when when a business is looking to export, there's, you know, so many options out there. There's so many different FTAs. What actually, which FTA would be more useful for them?











 What are they making? The EU have these sector specific guides with each market. So it even looks at the UK and said we really like, you know, in the UK they consume a lot of this. So actually something like that would help businesses look, you know, help them decide which market is best for them . In terms of other ones we've got within.
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None Portrait Speaker 8
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It's obviously a case of having to ask questions. So just having it straight in front of you straight away. So there is definitely more work to do to, to try and bring the. opportunities that we might not even see yet to, to front. I think just something else probably worth mentioning, kind of on the same lines, but not we're looking at a lot of guides that look at highlighting sectors which already do well in a market. So for example, you could look at there's a market access guide on on Canada and you could say that they, they, they're very good, big importers of cars.

























They have a big car sector. But actually what we need to be doing is looking at sectors which have been growing. massively over the last ten years, but maybe still at that lower level, because that's the future. opportunity that we can look at. So it would be good. It would be good to kind of focus more on the sectors which are up and coming, rather than the ones that are already established, because those are the ones we already have established trade in. For example, for the UK, GCC, we looked at products and we looked at reducing tariffs, quite rightly so, on products that we already have a large trade flow with.











 Now, if we looked at some other some other products which maybe are ten years away from being huge, they might not have got the tariff reduction that they needed, they needed, and they won't continue to grow as fast as the others because they won't have the tariff reduction, or they won't have the provisions to help them to help them export. So similar to your question, but also not focusing on kind of emerging trends in.
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