UK Trade and Business Commission: Frequently Asked Questions
About us
What is the UK Trade and Business Commission (UKTBC)?
The UK Trade and Business Commission was established in 2021 to bring together business and politicians in scrutinising and making recommendations to improve UK trade policy. From numerous evidence sessions and visits, we published a Blueprint containing 114 recommendations in May 2023. After taking a pause during the election period, we are now reconstituting given the importance of this work.
Why has the UKTBC been established?
UK exporters continue to face significant challenges after Brexit, with goods having seen a particular decline when considered against other G7 economies. There remain far too many barriers to trade in general, both with the EU and other countries. The UK Trade and Business Commission has brought together business and politicians in a unique manner to consider these issues and provide solutions to both the UK Government and the EU.
Who is involved in the UK Trade and Business Commission?
The UK Trade and Business Commission consists of politicians and business representatives from across multiple sectors of the UK economy. It is chaired by Andrew Lewin, Labour MP for Welwyn Hatfield. Secretarial support is provided by Best for Britain who are the researchers, data scientists, strategists, and activists, fixing the problems Britain faces after Brexit. We also draw upon outside expertise led by trade policy specialist David Henig, including from business and specialists across the UK and in other key target areas such as the EU.
How can I contribute to the work of the UKTBC?
Businesses are at the heart of our work, and we want to hear from those with stories to tell. We also work with industry and business organisations, devolved administrations, MPs and diplomats based in the UK to ensure that our recommendations are suitably robust and capable of implementation.
How do you present your findings?
The UK Trade and Business Commission publishes regular reports, as well as periodic updates on specific issues after taking evidence. We discuss findings with the media and government. Our recommendations formed a significant part of the Trade Unlocked conference held in Birmingham in June 2023.
What has the UK Trade and Business Commission achieved?
Many of our recommendations have been adopted by the UK Government and have influenced its policy-making. They informed the agenda for the reset in relations with the EU. They have also been built upon in numerous other UK trade policy reports. The government’s plans for a trade strategy and revamped Board of Trade build upon our work, as do negotiating priorities such as a UK-EU SPS food and drink agreement, a youth mobility scheme, and other enhancements to the Trade and Cooperation Agreement. Some of our recommendations have already been implemented, such as the extension of rules of origin for electric vehicles, and joint work between the UK and EU to prepare for the reset.
UK-EU relations
What is the UK-EU trading relationship?
According to UK figures, the UK exported £185 billion of goods and £171 billion of services to the EU in 2023. The UK imported £319 billion of goods from the EU and £147 billion of services. Overall, the UK had a trade deficit of £110 billion with the EU. A surplus of £24 billion on trade in services was outweighed by a deficit of £134 billion on trade in goods. EU figures by contrast show them having a surplus in both goods and services, to a total of €209 billion. Considering also countries interlinked with the EU single market and customs union, Switzerland, Norway, Turkey and Iceland, these figures become even more significant.
Why is the UK-EU trade relationship so important?
The EU is the UK’s largest trading partner, constituting around 50% of all UK trade. The UK is also the EU’s second largest trade partner and, in 2022 the trade relationship the second largest in the world. Companies trade more with countries close to their base, demonstrating the gravity theory of trade which holds for services as well as goods. Modern trade is also increasingly organised through complex regional supply chains in which intermediate goods cross borders frequently, before being included in the final product. Greater trade is associated with higher economic growth, and for both the UK and EU there is an incentive to boost UK-EU trade.
How can the UK-EU trade relationship be improved
In 2020 the UK and EU agreed a Trade and Cooperation Agreement under which products originating from one and being exported to the other are not subject to tariffs. There are many remaining barriers to trade. These include differing product regulations, regulatory or customs checks on entry, restriction on business operations including for visas, taxes, and various bureaucratic requirements. Companies could benefit from these issues being tackled to reduce the burden they face when trading. In this context the UK has proposed a veterinary agreement, improved mobility for touring artists, and mutual recognition of professional qualifications. The EU is in the process of obtaining a negotiating mandate on a youth mobility scheme.
Could the UK just join the Customs Union / Single Market / EU?
The UK Government has ruled out joining the Customs Union or Single Market. If this were to change, there would need to be an extensive negotiation with the EU, for example there is a lengthy accession process for new members, while agreeing a customs union or joining the European Economic Area / Single Market would involve consideration of extensive detail. In the past, senior EU representatives have suggested that none of this could be considered until the UK could be seen as a reliable negotiating partner with a settled cross-party agreement on its aims.
What will be the impact of improving the UK-EU relationship?
Reducing trade barriers is typically economically beneficial. While individual measures such as a veterinary agreement cannot come close to making up for the estimated 15% loss in trade and 4% in GDP from Brexit, some companies can be helped to trade more. As significantly, rebuilding UK-EU ties can allow for future problems to be resolved more easily, for example where regulatory divergence would lead to significant extra costs for business such as through the respective UK and EU Carbon Border Adjustment Mechanisms. A government willing to commit to a strong relationship with its main trading partner can also increase business confidence, which will help encourage greater investment.
How has Northern Ireland been affected by UK-EU agreements over Brexit?
For the purposes of goods trade, Northern Ireland has substantively retained barrier-free trade with the EU, with some goods from Great Britain, particularly of food and drink, being subject to checks on entry. These rules were last updated in the Windsor Framework agreed between the UK and EU in February 2023. In terms of services trade, Northern Ireland follows the same rules as the rest of the UK. Agreements reached between the UK and EU on goods trade could help to reduce checks between Great Britain and Northern Ireland.
What is the UK-EU reset?
The Labour government elected in July 2024 has sought a more constructive relationship with the EU than their predecessors. This has included more meetings between Cabinet Ministers and their EU counterparts, and seeking new agreements including on security and trade. Commission President Ursula von der Leyen and UK Prime Minister Keir Starmer have agreed to regular summits starting in 2025, with officials on both sides working together to prepare the agenda.
Who in the UK government is responsible for the EU relationship?
Responsibility for the UK-EU relationship sits in the Cabinet Office with Nick Thomas-Symonds as lead Minister. Most other departments have an interest in the relationship, notably the Foreign Commonwealth and Development Office (FCDO), and Department for Business and Trade (DBT). The Cabinet Office convenes all of these interests into a single cross-Whitehall view.
What does the EU want from the UK relationship?
As a multi-state institution there is rarely a single unanimous view across the EU, and for this reason the EU’s main priority for third country relationships is for these to be orderly and defined by treaties and processes. As a neighbour, security partner, and important trading partner, the UK is considered relatively important by the EU. There are improvements that different actors in the EU system would like to see to trade with the UK, such as through a youth mobility scheme, and there is a general concern about the need to increase growth.
How does the EU negotiate?
The European Commission negotiates agreements with third countries on behalf of and according to a mandate given by Member States. The lead Commissioner for Trade and Economic Security, whose responsibilities include UK relations, is Maros Sefcovic. During the process of talks the Commission must keep others across the EU informed as to progress, and ensure that the likely outcome meets sufficient requirements. Member States and Members of the European Parliament will vote on the final agreement, giving them a certain amount of power in the process.
How is the UK-EU relationship scrutinised in respective Parliaments?
There is a joint UK-EU Parliamentary Assembly consisting of MPs, Peers, and MEPs which meets twice annually and helps build relations though this has no formal powers. Neither the House of Commons or European Parliament has a committee dedicated to UK-EU relations, though there is a dedicated EU select committee in the House of Lords. Other committees within the UK and devolved Parliaments are likely to look at different aspects of the relationship, but there will be no requirement for a final vote on any new agreements, unlike in the EU.
Global trade
Can increased global trade offset Brexit losses?
Since 2021 the UK has signed new Free Trade Agreements with Australia and New Zealand, and acceded to the Trans-Pacific Partnership (CPTPP). Negotiations on new FTAs are ongoing including with countries in the Gulf Cooperation Council and India. Economists are however largely agreed that any benefits from these will scarcely offset losses from new trade barriers with the EU. This is partly due to distance, but also that no trade agreement comes close to the seamless flow of goods and services that takes place between EU Member States.
What else can the UK do to encourage trade?
There are many steps that governments take to encourage greater exports, some of which can be under full domestic control. For example, overseas students in the UK class as an export, and encouraging companies to set up European headquarters in the UK is likely to increase exports. There are also types of agreements short of a full FTA that can be helpful, such as in digital trade or mutual recognition of regulations. UK Embassies around the world also support UK business with issues in accessing different markets. All of these are likely to form part of a government’s overall strategy.
How is trade balanced with other policy considerations such as the net-zero transition?
Over recent years there has been a growing recognition that trade policy must support both economic growth and other government objectives. Thus for example Free Trade Agreements include labour and environmental provisions, and other areas of cooperation such as on animal welfare. Finding the right balance between different objectives is one of the challenges with a successful trade policy.
