From A2B: Decoding the global supply chain

Supply Chain Icon

Read time: 8 minutes

After 14 years of Tory Party rule, the first few months of the Labour government have already proven controversial and turbulent. Remaining focused on supply chain issues, we take a look below at Labour’s trade-promotion policies and the prospects for progress.

Autores: Natalia Golovataya Walinase Chinula

Sir Keir Starmer’s government has articulated an ambitious trade strategy to boost the UK economy and shake off the remaining cobwebs of Brexit when it comes to improving movement of goods. One of the trade strategies that Labour included in its manifesto is negotiating trade agreements with “key international players” and “resetting the UK’s relationship with the EU.” Before the elections, the Labour Party said it would drastically overhaul the Conservative Party’s post-Brexit trade policies by “focusing on quality over quantity” in trade deals and ensuring that trade agreements align with national priorities and economic objectives.

In summary, Labour’s 2024 manifesto included the following promises on trade and the movement of goods:

  1. Improved trade and investment relations with the EU, to be achieved by tearing down unnecessary barriers to trade
  2. Targeted trade agreements aligned with the UK’s industrial strategy and economic strengths
  3. Publication of a trade strategy and use of every lever available to get UK business the access it needs to international markets
  4. Leading international discussions to modernize trade rules and agreements
  5. Seeking a new strategic partnership with India, including a free trade agreement
  6. Deepening UK cooperation with partners across the Gulf
  7. High-level commitment to investment in “green industries of the future,” such as ports

Powerful words, clearly aimed at fostering resilience and diversity, but in many cases lacking clarity and an implementation strategy.

For example, the UK automotive sector depends on imports for key battery components and materials, which Labour describes as an “overreliance.” However, the manifesto lacks a viable alternative other than establishing a Supply Chains Taskforce to build on the country’s capacity in this sector. There has even been a mention of lithium mining in Cornwall (as well as strengthening relationships with other international partners). Although it is no longer novel to look for ways to return to a more circular economy by relying on a country’s own raw materials and reducing dependence on imports, the key consideration which has been widely discussed in recent months in the context of alternative fuel is: Do we have enough raw materials, and are the alternatives sufficient to support the demand? As with general discussions on alternative fuel and energy sources, the answer, for now, seems to be a series of “don’t knows.”

Key takeaways
  • Party’s manifesto position on trade and movement of goods faces significant challenges
  • Plans to tax oil and gas to fund and upgrade green ports and renewables
  • The TCA governs UK-EU trade after Brexit, but imposes rules, checks and paperwork on goods and services
  • Labour wants to improve trade relations; faces challenges regarding food, plant and professional standards