The UK government’s continued focus on traditional free trade agreements (FTAs) is misaligned with the country’s service-based economy, according to a new report from the Tony Blair Institute (TBI), which calls for a fundamental rethink of Britain’s trade policy.
The think tank argues that lengthy, goods-focused FTAs offer diminishing returns and are poorly matched to the UK’s core strengths in services and digital trade. Instead, it recommends a pivot towards targeted market access deals that can be negotiated more quickly and deliver faster economic impact.
“FTAs take years to negotiate, often centre on goods sectors of lesser significance to the UK’s service-led economy, and can quickly become politically outdated,” the report warns.
Between 2020 and 2024, the UK signed just three new FTAs, which are expected to boost exports by £9.5 billion in the long run. In contrast, over the same period, the government resolved 640 market access barriers, which the TBI says deliver greater value, more rapidly.
The institute’s analysis comes as the UK nears completion of a new trade agreement with the Gulf Co-operation Council (GCC) — a bloc including Saudi Arabia and Qatar — which has been under negotiation since 2022. Chancellor Rachel Reeves said this week that a deal with the GCC is “the next” in the pipeline as the government seeks to strengthen post-Brexit trade ties.
While negotiations with countries like Switzerland, South Korea, Canada, and Mexico remain ongoing, TBI suggests that resources are being too heavily focused on FTAs rather than on strategic bilateral market access gains.
“FTAs, while really useful as a sort of bedrock base for trade policy, are actually quite underutilised by firms — they can be quite complex to get your head around,” said Tom Smith, director of economic policy at TBI. “Some of the most stark market access barriers can be negotiated bilaterally.”
The report highlights the UK’s digital economic agreement with Singapore, which was finalised in under a year in 2022, as an example of a modern, agile trade deal that capitalises on Britain’s global leadership in tech and services.
To better serve the UK’s modern economy, the TBI proposes several policy reforms, including the introduction of an AI-powered trade adviser tool to help businesses navigate complex trade rules and identify opportunities. It also recommends using global supply chain data to improve the efficiency of customs checks.
Additionally, the report advocates for a clearer strategic framework within the Department for Business and Trade, to better allocate resources and focus efforts on areas with the greatest potential return.
Negotiations with Israel were suspended this week, in response to the country’s block on aid to Gaza, further highlighting the political sensitivities that can delay or derail lengthy FTA discussions.
As the UK looks to define its global trade identity post-Brexit, the TBI’s message is clear: the path to economic growth lies in modern, focused, and services-oriented deals, not in repeating the traditional playbook of broad, slow-moving FTAs rooted in goods-based trade.
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UK’s free trade strategy out of sync with service-driven economy, says Tony Blair Institute
