Uncorrected oral evidence: Trade in a turbulent world: how should the UK deploy its trade instruments?
Oral evidence, 20 October 2026.
Lord Anderson of Swansea
In retrospect, the period after the Second World War appears as a golden age in international trade practice, with greater emphasis on developing countries and greater consensus. Now, the pattern is more protectionism and so on. Given this darkening international context, can you give us any signs of hope?
Maxwell Green
That is a good first question. There has definitely been a lot of instability and volatility in the global marketplace over the last five to 10 years. Time after time we have had issues around readjusting to life after leaving the EU. We have had issues with the conflicts in the Middle East, US tariffs and, most recently, the conflict in Iran. However, businesses are very resilient to some of these changes. For example, over the first half of this year trade was down by only 5%, despite all the issues in the Middle East. That is after a huge increase in exports last year, so in fact it is sitting way above where it should be when you look at two years ago. When you look at the detail and where this is coming and going, there is a lot of volatility in individual markets, as you would imagine. That is mostly down to trade diversion. For example, in the first half of this year, we saw US exports dip by 38%. But at the same time, Chinese exports increased by 30%. Germany, the Netherland and Hong Kong were all up as well—Hong Kong by almost double compared to last year. On the other side, when you look at importing to the UK, we are seeing huge increases in British businesses importing from the rest of the world—imports from the US are up by 11%, China is up by 7.5%, Germany is up by 9%, Switzerland is up by 93%, which is almost double, and Canada is up by 88%. Therefore, although there are signs that it is slowing down, we are seeing that manufacturers are resilient. In our last manufacturing outlook survey, we found that the share of UK manufacturers exporting increased by 8%. That is aligned with the increased confidence that they are seeing. Export output remains positive, but overall output by the sector is slightly down at the moment and has slowed. I guess the moral of the story is that we are seeing certain signs that it is stable and certain signs that it is going down slightly. At the same time, businesses have had to adapt to a lot of things over the last few years, and that does not come cost-free. SMEs and other businesses have had to adapt to shocks in oil prices, energy prices and input prices. We have adjusted, we are resilient and we have a positive outlook for the next few years.
Lord Anderson of Swansea
In that context, what is your perspective on the service sector?
Maxwell Green
I am not an expert on the service sector, so I might leave that question and maybe come back to you, if that is okay. I am focused predominantly on goods trade.
Baroness Verma
In your own view, which sectors do you think therefore have done really well, and where do you feel the policies that are currently around us are deterring other sectors within manufacturing and development?
Maxwell Green
It is important to put it in the context of the global environment. Every country is struggling with trade and exports at the moment, so we need to compare those to other countries. Even though, for example, overall automotive sector exports have decreased slightly, they have not decreased as much as other areas. What really helped was the US EPD. For the automotive sector and the beef sector, with exports to the US as our largest single trading market, having that comparative advantage against other markets really helped to boost those exports up, specifically in 2025. I know that I just said that US exports are down this year, but they are so much further above where they should be. It really depends on FTAs and other trade tools that we are focusing on. The US EPD is one example where those sectors are doing very well. Aluminium products are up 14% to the US and steel is up 9%. There are definitely sectors where we are seeing a lot more growth. In the industrial strategy sectors we have been focusing on over the last few years, we expect those areas to also do well and be more of a priority when it comes to future trade tools.
Baroness Lawlor
I am very interested in what you said about the resilience of the trade groups you represent at Make UK. You spoke about automotive, steel and the industries that have benefited from the EPD. The EDP is not an FTA; it is an understanding, but it is not legally binding. Can you elaborate on the sorts of agreements, whether binding or non-binding, that your members have done well out of? You mentioned the US partnership agreement, but what about others, and other sectors that you represent?
Maxwell Green
UK manufacturers generally favour binding agreements because they provide long-term certainty and they can look at investment opportunities much further into the future. However, as we all know, there is increasingly a fast-moving global environment and, in the time that it takes to start, negotiate and implement an FTA, things have moved on. All agreements play a really important part, but I cannot overstate the importance of binding FTAs. For example, they open up market access on a much wider scale. Our members are very excited about the opportunities brought about by the new India FTA, which has just come into force, in a wide range of sectors. Straightaway, we are already seeing tariff reductions on alcohol, medical devices, aerospace and others, and it is also an agreement that will get better over time. Each year, we will have more market access on a range of products. CPTPP is obviously quite a useful agreement that we are looking into. It opens up some of the fast-growing markets in Asia. The best thing about it is that it keeps developing and expanding. We are on the ground floor of that. We are looking forward to the inclusion, potentially, of Indonesia and the Philippines in that agreement. We have a big focus on the Australia and New Zealand FTAs, which were the first FTAs that came into force after the UK left the European Union. What is great about Australia is that it was incredibly quick to negotiate, which was a big relief for manufacturers. The India FTA took four and a half years from the start of negotiations to implementation earlier this year; Australia took three. We hope that agreements such as the CPTPP will also be that quick. It took the UK three and a half years from the start but it will get faster as the accession process becomes more familiar to the bloc. On other agreements that we could into, because obviously FTAs are not the answer to everything, we had the negotiations to update the UK-Canada FTA a few years ago, which stalled on the issue of food standards but there is an opportunity to use more sector-specific agreements. For example, if we cannot get across the line because there is a red line on food standards, we can look at critical minerals or an agreement specifically on energy, which could be quite useful with everything going on in the Middle East. With Canada, as with Australia, we are very similar partners, so it would, I hope, be a lot quicker to negotiate agreements than it would with somewhere such as India or even the GCC.
Baroness Lawlor
Can you comment on what exactly does well with Australia and New Zealand, given that you are involved with production and goods? Is transport a problem? What sort of goods do you export?
Maxwell Green
I can definitely get you a list of the trade stats and what products we are exporting lots of, so that you can draw down into the details. But the UK and Australia markets are very similar, which is probably why they are doing quite well.
The Chair
When we looked at the recent facts, physical exports—manufactured goods exports—to Australia were down since we signed the deal.
Maxwell Green
Yes, if you look at the overall picture—
The Chair
Yes, services were up but goods were down—not by much; maybe by a few per cent. I do not know whether any colleagues remember that. I was surprised by it. Why is that the case?
Maxwell Green
Obviously, there are certain sectors that are doing much better. Overall, it is looking quite flat, but there are definitely sectors that are looking a lot more positive. I cannot give you the details of why it is down overall. I think that we have a lot of work to do around the implementation of the deals, which has gone a lot better since those Australia and New Zealand deals were signed. It is doing a lot better going the other way. Products coming from Australia and New Zealand into the UK are up quite substantially. Those inputs will go into our manufacturing to then re-export somewhere else. It is not just a one-way ticket. It is not just exporting to Australia; we also need to focus on the imports.
Baroness Lawlor
When you talk about these lags—you mentioned one with the US two years ago and one with Australia—to what extent do we have to factor in the world economic situation during and post Covid when supply chains were getting back to normal?
Maxwell Green
Could you repeat the question in a slightly different way? I am not sure I fully understand.
Baroness Lawlor
You spoke about dips in trade post 2021. To what extent were they to be expected after the Covid shutdown not only here but of supply chains the world over, as well as the recent wars that you mentioned?
Maxwell Green
Manufacturers obviously have a lag and there are things they would need to adapt to. For example, with the issues in eastern Europe over the last few years, we have had to adapt to different supply chains and move our imports from Ukraine and Russia, which were a large supplier of raw materials. We had to find new partners to bring those in. There were also domestic issues with energy prices, where we will have a lag because of the fact that it takes a while to sink in for manufacturers and for them to adapt to those changes. It is obvious that we will have some kind of push. We are seeing that at the moment with the US bringing in more protectionist policies with its tariffs last year. We saw a huge surge in exports to the US, due mostly to the fact that the UK had a much lower tariff than other markets. Now that the effects of the tariffs are starting to sink in for manufacturers, the US is starting to look at different supplies domestically instead of overseas. It has taken a bit of time but it will slowly filter into the trade statistics and what is happening.
Lord Stevenson of Balmacara
You have spoken very well about the various trade agreements that have been signed and the different types of trade agreements that benefit your members. But behind all that, presumably there is an overarching question about what the trade policy does. What are the Government setting out as being the objectives? I am interested in your thoughts on the relationship between the two. In particular, have you any ideas that we could take on about how that trade policy itself could change and which would benefit?
Maxwell Green
The policy that is being created and implemented is of course fantastic. We think that the market access matters a lot. Whether it is an FTA or a sector agreement, it is massively helpful. But if businesses are not aware or able to understand what these things are and we also have lower competitiveness than our competitors in Europe or North America, they cannot fully be utilised. Therefore, there are some areas where we think that policy could be used to help exports grow. The first would be around improving FTA utilisation by trying to work with industry and the Government collaboratively to try to increase the awareness of FTAs and other trade tools. A lot of businesses are still unaware of some of the advantages that they have or there is complexity with customs or the documentation. We also think that the guidance that they get from the Government is fantastic, but it comes too late; upon entry into force. If we had it six or three months before—we are of course aware that it will come into force on that date, or soon—businesses can start to look at exporting from day one and that may that may help with the lag that you have after signing an FTA, which takes a while to fully come into effect. Another big barrier to export support is access to finance. That is why we are very supportive of UK Export Finance and, potentially, looking at increasing its lending capacity as well. In conclusion, signing an agreement should be viewed as the start of the implementation process rather than the end of it. We also think we need to look not just at trade policy but also domestic policy, because they are very interlinked. We cannot look at trade policy through a single lens. Trade agreements improve market access, but if domestic policy does not support manufacturing and the competitors to manufacturing, they will not be able to take advantage of those opportunities. For example, the UK has the highest energy industrial energy price in the G7, caused by a lot of external and internal factors. The UK funds environmental and social levies through electricity bills rather than general taxation, adding around 20% to the costs of electricity for manufacturers. That increase in energy prices for manufacturers hurts competition, which has led to the UK having, on average, 46% higher energy industrial energy costs than advanced economies. We believe those costs should be funded through general taxation to reduce energy bills and support industry. Although trade agreements can create opportunities abroad, we need to make sure that businesses remain competitive at home so that we can remain competitive abroad as well. Stability and predictability is one of the most important things for manufacturers. You can look at the higher tariffs that the US has put on its market, but businesses need predictability and stability so that we can get that long-term investment and plan, going forward. What we find that is really good with that is free trade agreements, because they are on paper and binding and in 10 to 20 years’ time we can look at some of the areas that businesses can invest in. There are other unilateral measures that the UK could follow. A review of the global tariff would be helpful. Without importing, a lot of businesses cannot export. Obviously, the UK does not produce everything in the world; it cannot, because of climate and other factors. So, looking again at the global tariff will help us to potentially make inputs more competitive and lead to more competitive exports. The last thing—sorry, I know that this is a lot—is a more general point about increasing diversification. We can use all the trade tools at our disposal, such as FTAs, non-binding agreements and sector-specific agreements, to try to increase diversification not just in exporting but also importing. Obviously, agreements such as the CPTPP are vital to that, as they will keep on expanding. The UK must keep an active role in looking at other markets and issues that we could be addressing not necessarily through FTAs but through sector-specific agreements, et cetera.
Baroness Verma
You mentioned earlier the lag in information reaching manufacturers and businesses. Do you think that is because discussions across Whitehall departments is not consistent? As an organisation, perhaps you know better who works well with you and who does not. Maybe that is where the difficulties lie and the lag can be dramatically reduced if all the departments are aligned.
Maxwell Green
I am not entirely sure if that is the reason. The lag comes because awareness of the FTAs and new trade agreements is not fully known. Whether that is a problem within the Civil Service and linking up, I am not too sure. There is an opportunity to produce sector-specific market access guides. I know that DBIST and Defra have already started looking at this. If a market is really important for food exports, for example, they might want to bring Defra in. I am not sure about the politics and interactions between government departments, but there is definitely an opportunity for them to work closer together on sector-specific agreements of FTAs that will benefit a sector.
Lord German
I do not suppose your members wake up in the morning saying, “I wonder what’s happened to the World Trade Organization. I wonder how it’s getting on”. Yet we have to have some basis for understanding how we are all going to work together in this world. We have had in our evidence a total sense that although the WTO has enormous difficulties and big problems, we could not live without it. So, if you were to explain to your members as they wake up in the morning that this really is an important issue, what would you think they would want, given that you have already said that businesses are looking at certainty, stability and predictability? What does the WTO bring to that table and what would you say to your members if you were trying to convince them that it was a good idea, or a bad idea, to work with it?
Maxwell Green
It is no secret that the WTO has come under scrutiny and threat. However, historically, and I know that we and our members know this, it has helped to bring smaller countries into the trade environment, given regular rules across that trade environment and reduced barriers. So, although it is important to note that in the public eye the WTO does not look like it is doing what it should be doing, there are a lot of behind-the-scenes forums, meetings and working groups happening. It does a lot more behind the scenes and maybe it is a case of bringing that out and seeing what it is doing in these working groups towards creating common trade rules or reducing common trade barriers across global markets.
Lord German
In what it does now, do you think people say, “This is really helpful to us; we need to make sure it remains in place”? Do you have any examples of what you think your members will want to ensure is not just retained but also promoted? It might not be a headline about the whole organisation and how you reform it and get agreement. That might be beyond the reach of your reply. But in the undergrowth that you have talked about, there are an awful lot of things going on. What is it that people value and what tools do they use that are good for your manufacturers?
Maxwell Green
The most important thing that the WTO does is create certainty through shared trading rules. Stability is the most important part for our members when it comes to international trade. Even if there is a huge tariff, as long as we know what is going to happen, the WTO can help to regulate and push a norm across all member states.
Lord German
There is a wonderful report that we got from the International Chamber of Commerce and Oxford Economics, which says that if we dissolve the WTO, that would “lower GDP for developing countries as a group by 5.1% by 2030”. That is a hard issue to try to get people to understand. What message do you give to the people who are going to be at the sharp end of trade about this body that is based in Geneva and has all this background? How would you say to them, “This is what really matters here” and on how they help us?
Maxwell Green
Even developing countries have huge potential in the future to have more of an impact on world trade, and we can increase the sourcing opportunities. I do not have a straightforward answer to how we promote that message. Potentially, it is just making sure that the WTO is a lot more publicly visible in what it is doing, especially when it comes to producing regular rules around trade that we can look at and say, “This is improving stability across the global trade market”. I am sorry that I cannot give you a straightforward answer.
The Chair
No, that is very helpful.
Lord German
I just want to know whether the WTO is accessible to the end user—your companies—as it could be? Is it seen as distant? Could they be more—
Maxwell Green
There is definitely more that it can do. There is definitely more that everyone can do to be more transparent, right? The WTO is a fantastic organisation but there is definitely more that it can do to try to promote to everyone what it is doing.
Lord Boateng
More than 20 years ago, when dinosaurs ruled the earth—
Lord German
You were there?
Lord Boateng
I was there. In about 2002, I attended a conference of the International Chamber of Commerce at the Belfast International Convention Centre. One of the things that struck me then, and indeed subsequently in other jobs I have done, was a sense that other countries—Italy is a prime example—do rather better than us at promoting small and medium-size enterprises in the manufacturing sector, which are often represented in chambers of commerce, internationally and making them more aware of international opportunity arising from trade agreements and the like. I wonder whether in your experience and that of Make UK, you can give us some examples of best practice internationally that you think our Government would benefit from hearing about, learning from and, indeed, implementing?
Maxwell Green
I mentioned the UK-Australia FTA earlier. Australia has done fantastically when it comes to promoting their free trade agreement with the UK. We have already seen that with the huge increase in exports over the last few years. They have a fantastic website that looks at everything you could possibly want to know about Australia-UK trade, which manufacturers, or anyone, can go to and see what the opportunities are. To be fair to the UK Civil Service and DBIST, they have been really good at trying to look at export guides too. What we are missing though, when looking at import, is guidance for manufacturers to import from these markets as well. They have started doing small sections, but there is so much more that we can be doing. The EU also has a very good online system where businesses can look at specific markets and opportunities that they could have. When a business is looking to export, there are so many options out there and so many different FTAs. Which FTA would be more useful for them? What are they making? The EU has sector-specific guides to each market. It even looks at the UK and says, “In the UK, they consume a lot of this”. Something such as that would help businesses to decide which market is best for them. Within the CPTPP, the Canadians are very good at separating the benefits of an FTA bilaterally from the benefits you get under the CPTPP. I know that DBIST has also done that, but the Canadians are a lot more in-depth, shall we say. We could learn from that to try to get a little bit more clarity if we want to export to Canada or Mexico under the CPTPP or bilaterally. Which route do we take? Do we take the CPTPP or bilateral route? It is important because the tariff might be the same but the other procedures and provisions could be—
Lord Boateng
If I am a specialist cheesemaker, are there specific websites I can go to that will help me to understand the geography of UK trade agreements, so as to get a better handle on how I can get my cheese into that market? For example, perhaps I have a small farm in rural England or Scotland or wherever and I want to get my cheese into one of the markets that we have recently opened up. This committee has heard on previous occasions that there have been issues, oddly enough around cheese specifically, in some of these agreements.
Maxwell Green
At the moment, there is not a specific market guide. There is a DBIST “ask a question” function where you can ask a question online and DBIST will get back to you. However, that is obviously a case of having to ask questions instead of just having it in front of you straightaway. There is definitely more work to do to try to bring the opportunities that we might not even see yet to the front. Something else worth mentioning that is kind of along the same lines, but not completely, is that a lot of guides look at highlighting sectors that already do well in a market. For example, there is a market access guide on Canada, which is a very big importer of cars and has a big car sector. But we need to be looking at sectors that have been growing massively over the last 10 years but are still at that lower level, because that is a future opportunity that we can look at. It would be good to focus more on the sectors that are up and coming rather than those that are already established, because they already have established trade. For example, for the UK-GCC deal, we looked at products and, quite rightly, at reducing tariffs on products that we already had a large trade flow with. If we had looked at other products that were maybe 10 years away from being huge, they might not have got the tariff reduction that they needed and would not continue to grow as fast as the others, because they would not have tariff reduction or the provisions to help them to export. That is similar to your question but not focusing on emerging trends and consumption in different international markets.
The Chair
Are there any other questions or comments from my colleagues? No. Maxwell, thank you very much indeed. That was enormously helpful. If you have any follow-up comments, please send them in. I think there were some follow-up comments asked of you. We would be grateful to get them. We have a few more weeks before we close our inquiry. Make UK is a very important group in how you represent your members, so any more information you can send us would be extremely well received. Thank you very much for coming and spending your time with us this afternoon.