UK trade policy needs a coherent approach to address inclusivity

Last year, we published a comprehensive analysis of the UK’s trade policy landscape: UK Trade Policy: An Independent Review. We encourage interested readers to look at the full report for more detail. Each chapter, listed below, can be read independently, with both an executive summary and key recommendations provided.

• Ch.1: UK trade and economic performance
• Ch.2: What do we know about UK trade policy
• Ch.3: Domestic dimensions of UK trade policy
• Ch.4: International dimensions of UK trade policy
• Ch.5: Trade and economic security
• Ch.6: Trade and the digital transformation
• Ch.7: Trade and sustainability
• Ch.8: Trade, employment and gender

Since Brexit, successive UK governments have positioned trade policy as a vehicle for inclusive growth. By championing for better jobs, higher wages, and including women's economic empowerment through trade, the language reflected in ministerial speeches, policy documents and international agreements can be considered as inclusive, to an extent. There are some wins in this inclusivity agenda that must be welcomed:

• As the UK continues to grapple with declining labour productivity, the Industrial Strategy’s emphasis on addressing skills is reassuring.
• The UK's recent free trade agreements — with Australia, New Zealand, Japan, India, and through CPTPP accession — do include labour and gender provisions, and in some cases specific chapters on gender equality and women's economic empowerment.
• The UK has been an active and prominent champion of women and trade at the WTO, convening informal working groups and advocating for sex-disaggregated data globally.

Gaps between policy aspiration and action

But when we examined the evidence beneath the rhetoric, we find gaps between aspiration and action.

"Inclusiveness" is mentioned, but it sits well below growth and economic security as a policy priority. A more active and explicit recognition that trade policy has differentiated effects across workers, and that these differences should inform how agreements are designed and negotiated, would be desirable. Otherwise, it is difficult to respond in a structured, coherent and meaningful way to the unintended consequences of trade liberalisation.

Among the list of inclusive subjects in the policy documents, gender issues barely feature, a striking omission given the UK’s engagement on women and trade at the WTO. This is a significant lacuna given that the picture for women in UK trade is one of consistent under-representation. Women hold around 41% of "trade-supported jobs" overall, but only 22% of equivalent roles in manufacturing. Just 15% of UK SMEs are women-led, and women-led firms export less, grow less from exporting, and face greater barriers to trade finance.1 Making this worse is a severe lack of quality data. For example, UK export finance institutions do not routinely publish gender-disaggregated data on loan uptake or outcomes. Without evidence, it is impossible to know whether trade support programmes are reaching women equitably — or whether they are structurally biased toward larger, male-dominated firms.

There is a need for an integrated framework at the horizontal level across government to ensure inclusive goals are mutually reinforcing rather than being disconnected.

Nationally, there is little coordination between the sectors targeted for export growth and the labour supply policies needed to staff them, such as addressing skills shortages, particularly in sectors like agri-food, creative industries, and logistics.

With regards to employment, the trade strategy reaffirms commitments to labour rights, fair wages, and safe working conditions, and pledges to push for strong labour provisions in trade agreements. However, there are no measurable labour-related performance indicators, and critically, no acknowledgement that trade creates losers as well as winners.

Internationally, commitments on employment and gender issues are largely aspirational, rarely backed by targets or other forms of progress measurement.  Gender chapters in free trade agreements lean heavily on cooperation, encouragement, and information-sharing. None of the agreements create binding obligations to produce specific labour outcomes or policy change. Monitoring and accountability mechanisms are weak or absent, and some joint working groups have no requirement to include women or civil society members.

What does this mean for the future of making inclusive trade policy?

Making inclusive trade policy begins with having a strong evidence base that informs decisions through clear metrics, rigorous evaluation and granularity in insight. The absence of sex- and gender-disaggregated trade data hampers visibility, constraining policymakers’ ability to design targeted interventions. Making such data publicly available would enhance transparency and enable evidence-based policy that better accounts for how trade policies differentially affect women and other gender groups.

There is a need for greater policy coherence. The commitments the UK makes in trade agreements on labour rights and gender need to be more explicitly connected to domestic policy frameworks and to the evaluation of trade policy outcomes. This alignment needs to happen at the domestic and international policy level. The trade and industrial strategies address different, yet complementary, dimensions of employment. Without coordination, the UK risks pursuing employment goals in silos, or de facto not really pursuing them. There are already signs of such possible issues emerging. Sectors that would otherwise benefit from increased export activity, such as agri-food and farming in the UK, have faced labour shortages due to tighter immigration controls. While trade policy cannot, and should not, be treated as a universal tool for resolving sector-specific challenges, it must nonetheless acknowledge the potential labour market impacts of different trade policy instruments, such as trade agreements, for instance.

1. Source: OECD Trade in Employment (TiM) database, where employment sustained by foreign final demand (exports) is understood as the primary indicator for trade-supported jobs; United Kingdom, 'UK Implementation of Gender Equality in Free Trade Agreements' (WTO Informal Working Group on Trade & Gender, 27 February 2025) https://www.wto.org/english/tratop_e/womenandtrade_e/270225_item3_presentation_by_united_kindgom.pdf