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Long term competitiveness

The UK’s new Trade Strategy: key takeaways for financial and related professional services

27 June 2025
5 minutes

Introduction

The government has today published its new Trade Strategy. Our input to the development of the Trade and Industrial Strategies stressed that they should be two sides of the same coin, so we are pleased to see that the Trade Strategy has been explicitly designed to complement the Modern Industrial Strategy and the forthcoming SME Growth Strategy.

It is encouraging to see the clear asks of the industry picked up in several parts of the Trade Strategy:

  1. Services are front and centre, with the Strategy highlighting the UK’s strength as a “services superpower”, and noting global services trade remains buoyant. The importance to the UK of supporting digitally delivered services exports is also highlighted, including several references to the recommendations in our report Digital trade: a commercially viable approach.
  2. We called on the UK to widen its trade policy ‘toolkit’ to deliver faster, and in a more pragmatic way, for our exporters. The Strategy recognises that “we are going to need a more varied – and smarter – set of trade tools than we have had in the past” and identifies how tools such as mutual recognition agreements and digital trade agreements can be deployed.
  3. We have highlighted the limited ability of traditional Free Trade Agreements (FTAs) to address regulatory barriers for the industry, so we welcome the ‘Ricardo Fund’ to provide “increased support to UK regulators and our overseas trade teams to remove regulatory barriers for UK businesses trading abroad”.
  4. We stressed the need to have a clear value proposition for investment attraction, advocating a simplification of the National Security and Investment Act, investing in key infrastructure like subsea cables to ensure greater resilience and training the diplomatic network to better represent how global firms can benefit from a base in the UK.
  5. We called for the UK’s overseas trade and investment network to be reconfigured to promote the UK’s financial and professional services capabilities and reflect shifts in the global centres of growth to Asia and the Middle East. The Strategy sets out how the UK’s overseas network will be refreshed to give greater weight to commercial diplomacy, including “shifting some resources from export promotion into securing investment” and empowering Trade Commissioners to “respond more quickly to fast-moving global development.”
Approach to key markets

The Strategy highlights the need for “hard-headed economic diplomacy” with global economic superpowers, the US, EU, and China. On China, the new UK National Security Strategy, also published this week, includes the outcome of the China Audit. This commits the government to increasing its China capabilities and developing comprehensive guidance relevant to private sector engagement with China. A pragmatic approach with clear guidance for businesses will be critical in the changing geopolitical landscape.

The National Security Strategy and Trade Strategy highlight the importance of diversifying the UK’s relationships with economically vibrant and technologically advanced markets. Markets which are of greatest interest to our members such as the Gulf States, India, Indonesia, Singapore and Japan are named as markets “who are interested in cooperation on trade and security” and “share a similar interest in shaping international norms to mitigate and manage the effects of great power competition”.

Trade negotiations

The government’s immediate priorities remain to deliver on its Free Trade Agreement negotiations with the US, EU, Gulf Cooperation Council, Republic of Korea, Switzerland and Turkey.

Reflecting the commitment to developing a range of trade policy tools, the Strategy identifies potential partners and tools for new agreements including:

  • potentially negotiating new bilateral digital trading agreements with Brazil, Thailand, Kenya, and Malaysia, among others
  • seeking recognition of professional qualifications agreements with key partners in Europe, the US, Canada, Australia, New Zealand, India and the Middle East to support professional business services exports.

Ensuring a clear prioritisation of markets that can deliver the greatest impact for UK industry will be important when it comes to implementation of these ambitions.

We welcome the way in which the strategy also sets out how the UK will collaborate with partners and allies to negotiate and agree an ambitious agenda for future plurilateral agreements which address the challenges faced by the multilateral system. This includes:

  • joining the Multi-Party Interim Appeal Arbitration Arrangement at the WTO
  • exploring the possibility of acceding to the Digital Economy Partnership Agreement (DEPA).
Other key points to note
  • The capacity of UK Export Finance will increase by £20bn to £80bn, which we hope will include greater flexibility for how it supports exporters looking at the Ukrainian market.
  • Large sections of the Strategy reflect the growing importance of economic security and stresses the need to bolster UK trade defences. We recently produced a useful paper outlining the role of our industry in supporting defence and national security.
  • The UK will harness the digitalisation of trade in goods to reduce red tape.
Conclusion

It would be fair to say that the Trade Strategy is being born in a complex and unpredictable world. The UK will need to be adaptable, but it is important to have a clear sense of direction and to be able to signal to investors and exporters where the government is intent on driving growth and backing business’ efforts. It is welcome that the Trade Strategy is based on a realistic analysis of the UK’s strengths and weaknesses, recognising the UK’s global advantages in services in general, and financial and related professional services in particular. As ever, the delivery of its ambition will need sustained effort and focus. We look forward to working with government, regulators, and industry at home and abroad to ensure it succeeds.

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Modern Industrial Strategy summary

Following the government’s publication of its Modern Industrial Strategy and some of its supporting sector plans, we’ve compiled a summary of the paper and commentary on the sections relevant to the financial and related professional services industry.