UK Focuses on Export Barriers as Geopolitics Stymie Trade Deals

This content was published on October 23, 2024 - 01:01

3 minutes

(Bloomberg) — UK Business Secretary Jonathan Reynolds will unveil a new fund aimed at breaking down barriers faced by British exporters when accessing foreign markets, as talks to reach post-Brexit free trade deals grind on.

Reynolds will announce the Regulatory Partnership for Growth Fund during his three-day trip to Brazil, where he will attend the Group of 20 summit of leading economies to hold trade talks with his peers. The Department for Business and Trade said the fund would help to unlock opportunities worth almost £5 billion ($6.5 billion) for UK companies over five years.

It marks the latest step in the Labour Party’s attempt to revitalize the UK’s exports following Brexit, as Prime Minister Keir Starmer battles to boost economic activity. While Reynolds is continuing negotiations on complex free trade agreements which his Conservative predecessors were unable to complete, with countries such as India and the Gulf nations, three sources with knowledge of those talks have conceded they will take some time and may not be successful.

In the meantime, Reynolds has vowed to push ahead with smaller sector-specific deals aimed at quickly improving market access for exporters — an approach formalized by the creation of the Regulatory Partnership for Growth Fund.

The money it contains, just £2.3 million set aside from the Business Department’s existing budget, will facilitate work between UK regulators and experts and Brazil’s Ministry of Health to share best practice around cancer drugs, making it easier for the UK’s pharmaceutical sector to access the South American country’s market, the department said in an emailed statement.

It will also fund work across various markets to reduce the regulatory burden on UK lawyers practicing overseas, including in some US states, the department said. In total it will target 36 barriers, some of which could not be disclosed due to commercial or diplomatic sensitivities.

“We are rolling up our sleeves and removing red tape where it is holding this country back from harnessing every opportunity available,” Reynolds said. “This multi-million-pound fund will unleash the potential of some of the most prominent sectors in the UK.”

A series of geopolitical events have complicated FTA talks between the UK and its peers. Relations with the United Arab Emirates, part of the Gulf Cooperation Council, have been strained by a series of diplomatic and business disputes with the UK, including the previous Conservative government’s move to block its takeover of the UK’s Telegraph newspaper. That increased frictions in FTA negotiations, one source with knowledge of the matter said.

Earlier this year, the UK withdrew from FTA talks with Canada after they clashed over agricultural standards. Similar discussions with India were slowed by the political calendars in both countries and wrangling over the cross-border movement of workers.

During his trip to Brazil, Reynolds will hold the first bilateral meeting between the UK and Argentina on trade since 2019. He will meet with his counterpart Diana Mondino and will commit to strengthening the UK’s trade and investment relationship with Argentina.

He will also speak to European Commission Vice President Valdis Dombrovskis, as Labour attempts to forge a closer post-Brexit relationship with its largest trading partner, the European Union.