Export led growth

Any new UK-EU security arrangements must include an explicit recognition that it would be mutually beneficial to act together to guard the critical national infrastructure on which the UK and EU business community depends, from those who wish it ill. (Recommendation, Paragraph 12)

The UK should work closely with the EU to strengthen coordinated action against non-market economies that undermine the international trading system through unfair practices, including use of forced labour, industrial subsidies, state-owned enterprise advantages, and forced technology transfers. Enhancing cooperation on trade defence instruments—such as anti-subsidy and anti-dumping measures—along with alignment of safeguards against use of forced labour in supply chains will help ensure a more effective and consistent response to market distortions that threaten fair competition. (Recommendation, Paragraph 15)

To support the fight against economic crime, we urge the Government to explore how to maximise opportunities to deepen law enforcement cooperation with the EU, in particular to secure real-time intelligence exchanges. We hope to see the announcement of a clear roadmap for further negotiations in this area at the forthcoming UK/EU summit. (Recommendation, Paragraph 18)

The UK and EU both support a stable free trading system. Like the EU, the UK Government should join the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) to help uphold a functioning dispute resolution system while broader WTO reforms are negotiated. (Recommendation, Paragraph 21)

The Committee urges the Government to prioritise the minimisation of trade burdens in Northern Ireland as a fundamental element of any future UK- EU reset. This should be achieved through a strong emphasis on building trust between the Parties, maintaining clear and consistent communication 45 with the Northern Irish business community and civil society, and ensuring Northern Ireland remains central to discussions on trade easements. (Recommendation, Paragraph 26)

We support the Government’s intention to negotiate a Sanitary and Phytosanitary (SPS) agreement with the EU to reduce the need for regulatory formalities and controls at the border for agri-food products, plants and animals. (Recommendation, Paragraph 31)

We concur with the recommendation of the EU-UK Parliamentary Partnership Assembly that there would be value in “providing a signal at or before the [UK-EU] Summit that a fair deal on fisheries will be reached” and call on the Government to enable a multi-year settlement. (Recommendation, Paragraph 36)

The Government should seek to maximise cuts to the red tape currently restricting free trade with the EU, taking full advantage of the customs cooperation provisions in the Trade and Cooperation Agreement. Specifically, it should pursue mutual recognition of UK and EU Authorised Economic Operator schemes for customs simplification, a bilateral waiver of safety and security declarations, and enhanced cooperation to facilitate roll-on, roll-off cargo traffic. In addition, the Government should consult with industry on a regular basis to identify and address further opportunities to streamline border processes. (Recommendation, Paragraph 43)

The Government should consult with industry on rejoining the Regional Convention on Pan-Euro-Mediterranean Preferential Rules of Origin as an alternative to the rules of origin arrangements agreed in the Trade and Cooperation Agreement. (Recommendation, Paragraph 49)

We recommend that the Government consults with the business community, unions, workers and consumer groups and identifies sectors of the economy where, over the next ten years, there could be mutual gains from maximising compatible regulation with the EU. This should include an assessment of the flexibilities the UK might need to maintain membership of existing trade deals like CPTPP, and to agree the free trade deals currently under negotiation with Switzerland and the Gulf Cooperation Council. Where there is significant mutual gain from compatible regulation with the EU, the Government should commit to a regulatory roadmap that maintains compatible regulations with the EU. It should also seek, where beneficial for both parties, mutual recognition of conformity assessments. (Recommendation, Paragraph 54)

Energy trade represents a major opportunity for enhanced UK-EU trade and cooperation. Given shared strategic objectives—reducing carbon emissions, improving energy security, and expanding renewables—both sides have a mutual interest in strengthening their partnership. (Conclusion, Paragraph 64) 46

To achieve the shared strategic objectives of reducing carbon emissions, improving energy security, and expanding renewables, the UK and the EU must prioritise energy cooperation in upcoming discussions. There is a clear need to move beyond the current state of implementation of Trade and Cooperation Agreement’s current electricity trading provisions, which industry has deemed unfit for purpose. The Government should review industry proposals for improving market coupling arrangements and seek to agree the most efficient electricity trading framework possible. (Recommendation, Paragraph 65)

To prevent the UK and EU’s respective Carbon Border Adjustment Mechanism schemes from becoming barriers to trade in electricity and carbon- intensive goods, when doing so maximises export potential and reduces consumer costs, the Government should seek to link, and keep aligned, the UK Emissions Trading Scheme with the EU Emissions Trading Scheme. The Government should ensure action is in place to mitigate any impacts while the EU’s Carbon Border Adjustment Mechanism is in place and the UK’s is not. (Recommendation, Paragraph 66)

We note the extensive cooperation between the Government and the European Commission on the Data (Use and Access) Bill. We recommend that the Government monitors the EU’s Data Union Strategy upon its publication, assesses implications for UK policy, and take whatever steps are required to ensure a permanent data adequacy agreement is secured. (Recommendation, Paragraph 72)

The Government should prioritise financial services in EU relations by using the EU-UK Financial Regulatory Forum to build on previous best practice and advance regulatory cooperation. (Recommendation, Paragraph 76)

To achieve the best outcomes in terms of innovation and in turn growth, we urge that the Government make the case for all elements of European Research Framework Programmes, including FP10, to be open to third- country participation, and urge the Government to engage with UK research communities to maximise UK participation. (Recommendation, Paragraph 81)

We recommend that the Government draws lessons from the slow pace of mutual professional qualification recognition negotiations to date, reassesses which mutual recognition agreements would contribute most to our mutual economic gain, and publishes a new roadmap of negotiating priorities for mutual recognition of qualifications. (Recommendation, Paragraph 86)

We recognise the importance of reducing barriers to trade for touring artists. Given the economic and cultural significance of these sectors, continued engagement between UK and EU regulatory bodies is necessary to facilitate smoother market access. (Recommendation, Paragraph 89) 47

The UK and the EU should consider the development of an ambitious, visa- based youth mobility scheme with a limited number of participants. This initiative would allow young people to spend up to 12 months in the UK or EU for cultural and educational exchange, facilitating language acquisition, fostering a deeper understanding of shared European history and heritage, and enabling work and apprenticeship opportunities. Such an initiative would contribute to the long-term strengthening of trust and cooperation, which are essential foundations for international trade relations and mutual security. (Recommendation, Paragraph 94)

The Committee urges the Government to pursue these opportunities urgently and decisively, ensuring Britain and Europe remain globally competitive and strategically aligned. (Recommendation, Paragraph 100) 48

Asia-Pacific offers vast commercial potential for UK exports of both goods and services, but realising these opportunities for greater trade will depend on overcoming barriers through targeted regulatory diplomacy and sustained engagement through dialogues and trade frameworks. In particular, the Government must include robust and enforceable IP chapters in all new and updated FTAs. It should also ensure that adequate resources are allocated to support enforcement, investigation, and trade promotion of IP protections. (Conclusion, Paragraph 24)

The Government should use its full network of trade dialogues in Asia to push for real, commercially meaningful outcomes to drive down tariffs, remove regulatory uncertainty and improve intellectual property protection. In particular, the Department should explore wider use of ‘between the meeting’ task and finish groups that include the private sector to identify problems that hamper exports and develop solutions more rapidly. (Recommendation, Paragraph 25) Opportunities for trade with Asia-Pacific

The Government must continue its commitment to the Global Combat Air Programme as a conduit to build further on good relations with Japan, a key partner in the region. By recognising the power of such partnerships, and exploring where these can be grown, the UK is building a bedrock upon which greater trading ties can be created in the defence and other sectors. To sustain industry confidence, the Government must also provide longer-term funding commitments, moving beyond the current 12-month cycle, to give companies the certainty needed to scale their involvement. (Recommendation, Paragraph 34)

The UK should explore with Japan the potential to widen the partnership to include digital and cyber technologies, to explore potential ties to the AUKUS programme, and to develop joint exports to allies across the region. 34 Furthermore, the Government should quickly deepen the economic security dialogues with Asia Pacific allies to enhance our mutual resilience and diversity of our supply chains. (Recommendation, Paragraph 35)

Education and higher education are critical export sectors in Asia-Pacific and strategic enablers of the best possible export environment in the region. The Government’s trade strategy should confirm that education is a priority sector and the Industrial Strategy Council should ensure there is a cross-Whitehall dialogue that helps maximise the potential of UK education exports. On the ground in export markets, UK embassies should ensure that universities feature in a five-year business plan for advancing local ‘soft-power strategies’ which choreograph taxpayer-funded soft power institutions including UK universities, UK research councils, the British Council and the BBC World Service and connect to better organised drive behind export of UK creative industries, organised through the Industrial Strategy Council. (Recommendation, Paragraph 41)

Asia is fast becoming a key market for digital trade, shaped by divergent data governance models and rapid technological transformation. While regulatory fragmentation poses challenges, it also creates a window for the UK to support greater alignment through trusted, collaborative partnerships. There is a clear opportunity to promote convergence—via CPTPP, bilateral frameworks, or targeted initiatives—in ways that expand access, build resilience, and benefit UK firms operating globally (Conclusion, Paragraph 47)

As part of the new trade strategy, the Government should shift greater attention and resourcing toward joining open-ended digital agreements, such as DEPA, that better reflect the Indo-Pacific’s role as the engine of global digital growth, and offer faster, more flexible market access than traditional FTAs. (Recommendation, Paragraph 48)

The Government should step up collaborative engagement to encourage greater alignment and interoperability in digital rules, while maintaining strong multilateral commitments. In particular, the Government must continue to support the WTO e-commerce moratorium and the Joint Statement Initiative on e-commerce. (Recommendation, Paragraph 49)

As part of its new trade strategy, the Government should clearly set out how it will promote the liberalisation and export of environmental goods and services, particularly in and to the fast-moving Asia-Pacific region. The strategy must be aligned with the UK’s industrial strategy, underpinned by clear commitments to assess and respond to strategic dependencies and anti-competitive distortions in sectors of national security, while maintaining the UK’s support for a rules-based trading system. (Recommendation, Paragraph 56) 35

The UK’s reputation as a reliable and constructive partner makes it well-placed to navigate Asia’s evolving trade landscape. However, the Committee heard that seizing these opportunities will require a more embedded and consistent approach, underpinned by policy certainty and sustained political engagement at the highest levels. (Conclusion, Paragraph 63)

The Committee, therefore, calls on the Government to provide long-term policy certainty to businesses navigating rising geo-political and regulatory complexity across the region to enable them to take up the opportunities that greater trade with Asia. It must also continue to engage, through all available channels, with Asian partners and set a clear strategic policy direction in its upcoming trade strategy. (Recommendation, Paragraph 64)

The Government should look to incorporate regular ministerial and official attendance at key events in Asian economic centres, such as GIFT City in India, where UK exports have the most potential to grow. Diplomatic trade policy should move beyond a centralised, export-driven model and aim to embed the UK in Asia’s regional growth corridors. (Recommendation, Paragraph 65)

We agree with Douglas Alexander that the Government’s trade-focused resource must be matched to the potential of the export opportunities around the world. The Government must, therefore, invest properly in trade resources that are tailored to the needs of each significant Asian market. In order to match resources to the potential of the export opportunities the Government must undertake an analysis of DBT’s overseas based staff and compare this with the projected market growth in each market. The Department must then ensure resources are suitably realigned to meet strategic priorities and fully exploit the potential of growing markets. (Recommendation, Paragraph 66) 36