Development of UK Trade Deals since Brexit

Amidst economic instability and the long-term impacts of Brexit, the UK has committed to economic growth through the development of international economic partnerships, expanding multilateral and bilateral trade, strengthening diversification, and widening market access. So far, new and amended trade deals with the EU, US, and India, as well as within the European and Pacific regions, indicate greater investment in high-achieving sectors and a deepening of international ties. As part of the UK’s wider Plan for Change and Growth Mission, increased trade is an important feature of sustainable long-term economic growth. 

Strategic Overview

Following its departure from the European Union at the start of 2020 (Brexit), the UK has established and updated several trade deals. 

• Trade deals with the United States and India, centred around reducing tariffs.
• An agreement with the EU to protect business security. 
• Free trade agreements (FTA) with Australia, New Zealand, and Japan, alongside several other nations. 
• Joined the Comprehensive and Progressive Agreement for Trans-pacific Partnership (CPTPP) trade bloc. 

Expanding on this, the new 10-year industrial strategy, Invest 2035 (introduced in 2024), aims to increase investment in high-growth sectors, boosting domestic businesses and creating the right conditions for more high-quality jobs, as part of the UK’s overall Plan for Change and Growth Mission. The Invest 2035 strategy focuses on sectors with the highest growth potential, including advanced manufacturing, clean energy industries, creative industries, defence, digital and technologies, financial services, life sciences, and professional and business services. As a result, these areas and their subsectors will be the focus of policy reform to address barriers to growth, including a government Trade Strategy.

Trade Agreements introduced since Brexit:

Agreements:	Summary:	Put into force:
UK-EU Trade and Cooperation Agreement	Established a new framework for the management of cross-border crime, instituting new guidelines for law enforcement and judicial cooperation in criminal and civil law matters. Improves legal certainty for businesses, consumers, and citizens, enforcing greater equality and security between EU and UK businesses.	Effective 2021
UK-Japan Comprehensive Economic Partnership Agreement	Maintains terms of previous agreement with significant enhancements aiming to reduce trade barriers and boost exports.	Effective 2021
UK-Ukraine FTA	Free trade continuity agreement governing both trade and broader political, security, and cultural aspects of association.	Effective 2021
UK-Singapore Digital Economy Agreement	Establishes continuity of previous agreement following Brexit, eliminating tariffs and reducing other trade barriers.	Effective 2021
UK-Norway, Iceland and Liechtenstein FTA	Replaces previous agreements and liberalises trade in goods, services, and investments.	Effective 2022-2023
UK-New Zealand FTA	Eliminates 99% of New Zealand exports to the UK.	Effective 2023
UK-Australia FTA	Eliminates tariffs on 99% of Australian goods exported to UK, liberalises service trade, establishes rules for digital trade, enhances visa access for young people.	Effective 2023
UK-Ukraine Digital Trade Agreement	Following respective domestic ratification processes, the agreement introduces new aspects to the UK-Ukraine FTA concerning digital trade.	Effective 2024
UK-US Economic Prosperity Deal	This non-binding agreement establishes the reductions of tariffs on UK cars, steel, aluminium, beef, and aerospace exports to the US, in return for a reduction of UK tariffs on US exports of beef and ethanol.	Partially in effect since May 2025
UK-India Comprehensive Economic and Trade Agreement	After three years of negotiations, CETA was signed May 2025. It is set to reduce tariffs on 90% of British products sold in India, opening new markets for industries in both nations.	Not in effect

Several of these agreements were gateways for the UK to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In 2024, the UK officially joined the free trade bloc of key Pacific markets, establishing free trade between the UK and Japan, Singapore, Chile, New Zealand, Vietnam, Peru, Malaysia, Brunei, and Australia. Canada and Mexico have not yet ratified the UK’s accession to the trade bloc, preventing UK traders from trading with these Parties.

The UK is also negotiating free trade agreements with the Republic of Korea, Switzerland, Turkey, and the Gulf Cooperation Council (GCC). The GCC is a political, economic, and military union of Arab states, comprising the countries of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. 

Operational Context 

National Strengths 

As an independent trading nation, the UK currently has 40 signed trade agreements with 74 countries and territories, in addition to the EU, 72 of which are already in force. It is one of the largest trading countries, the second biggest services exporter, and one of the most globally connected economies in the world, as well as one of the top destinations for Foreign Direct Investment (FDI) stock. 

According to 2025 data from the Office for National Statistics (ONS), the top markets for UK exports and imports are the US, Germany, Ireland, the Netherlands, Spain, France, and China.

• Service exports: US (27%), Germany (5.6%), and Ireland (5.5%). 
• Goods exports: US (16.5%), Germany (9.1%), and the Netherlands (7.3%) 
• Service imports: US (19.4%), Spain (7.5%), and France (6.5%).
• Goods imports: Germany (11.9%), China (11.2%), the US (9.7%), and the Netherlands (8.2%).

The UK is also a leading force for decarbonisation, as the first major economy to halve its emissions (between 1990 and 2022), while growing its economy by 79%.

Economic Instability

The UK is currently experiencing high levels of economic instability, as high inflation and interest rates, weak economic growth, high government debt, a cost-of-living crisis, and persistent trade deficit have left the country in a complex and fragile economic environment. 

Various global geopolitical events in recent years have contributed to the economic and political instability in the UK, causing policy uncertainty and tensions. 

• Brexit, the UK’s official departure from the EU trading bloc, resulted in long-term reduction in UK GDP, productivity, competition, and trade with the EU due to new non-tariff barriers. 
• The COVID-19 pandemic led to an unprecedented fall of 19.8% in UK GDP during, brought on by lockdowns, social distancing, and business closures.
• The introduction of US President Trump’s global tariffs (10% on most UK goods exported to the US) has caused uncertainty for UK-US relations. 
• Rises in energy and food prices because of the Russia-Ukraine war, has driven inflation up, disrupted trade, and increased uncertainty, limiting growth. 

Strategic Outlook 

Recent Trends in UK Trade

As an important driver of economic growth, the UK’s Growth Mission and Invest 2035 strategy commits to long-term economic openness, however, growth in UK trade has been weak in recent years, with an increase in service exports offset by a decrease in goods exports. 

In 2024, ONS data showed that the value of UK exports rose by 0.7% from 2023, a reflection of a 7.7% increase in service exports (by 8.6% for EU countries and 7% for non-EU) and a 7.5% decrease of goods exports (down by 4.4% for EU countries and 4.1% for non-EU in 2025 compared to 2024). The decline of the latter follows an overall decline in the value of good exports since 2014. 

In comparison, UK importation rates have seen an overall increase since 2023, with a 4% rise in total value since 2024. 2025 data shows that good imports are up overall, between a 1.2% decline for EU countries and 6.1% increase for non-EU, while service imports are up by 6% for EU countries and 8.2% for non-EU compared to 2024. 

Trade Deal Potential

Trade growth is needed; the UK’s recent trade deals have potential in both earnings and savings, although it varies in scale between deals. 

The UK-India Comprehensive Economic and Trade Agreement is predicted to generate an additional £4.8 billion annually to the UK economy, with a further £2.2 billion annually added to UK wages and UK exporters to save up to £400 million a year from the reduced tariffs on UK goods. The liquor, automotive, agriculture, cosmetics, electrical machinery, aerospace, and medical devices sectors stand to benefit most from tariff reductions, particularly for small and medium sized businesses. 

The UK-US Economic Prosperity Deal marks the first trade agreement concluded by the new US administration. It is predicted to be impactful for the sectors and regions affected; it does not, however, possess the scope of legally binding status of an FTA, covering only a quarter of UK goods exports to the US, limiting its overall impact on the UK economy. 

As a major free trade bloc with a combined GDP of £12 trillion, it is predicted that joining the CPTPP has the potential to boost the UK economy by £2 billion annually. The key sectors for the UK within the CPTPP are manufacturing and technology, as well as financial and legal consultancy services. All UK regions are expected to gain, including boosts of £240 million for Scotland, £110 million for Wales, £70 million for Northern Ireland, £450 million for Southeast England and £310 million for the Northwest. It is predicted to boost household wages by £1 billion every year, supporting economic recovery. 

Implications for the UK 

Economic Growth

The expansion of trading potential has significant implications for the UK’s economic recovery, as international ties are strengthened and market access widens, driving international investment and sector growth. The reduction of tariff and non-tariff barriers (such as streamlining customs and digital trade) with partner countries offers both relief and new opportunities for the UK. 

1. Increased market access 
2. Increased multilateral and bilateral trade.
3. New export opportunities and jobs within certain sectors. 
4. Increased competition, encouraging innovation and promoting higher quality.
5. Greater variety and quantity of available goods and services, expanding consumer options. 
6. Strengthening of diversification and economic recovery.

Industry Competition

Shifts in supply and demand also presents challenges for UK businesses. Although the trade deals create opportunities in high-growth sectors through new investment and export wins, other sectors may face job displacement due to increased competition. The UK currently faces a high unemployment rate and broader tightening of the labour market, making competition a key concern for UK businesses. 

Environmental Consideration

There is an additional environmental perspective to consider, as the increase in foreign demand leads to manufacturing and transport emissions rise as well. The UK has legally binding targets to cut emissions to Net Zero by 2050 as part of its Paris Agreement commitments, which may be challenged by growing trade. The promotion and incorporation of clean technology is therefore a necessary phase in the UK’s economic plan.

Final Thought

Although these trade deals represent a significant breakthrough, they do not automatically equate to ‘fixing’ the UK’s economy. Sustainable economic growth and stability is a complex multifaceted process, requiring sustained investment in housing and infrastructure and targeted industrial and economic policies, such as supply-side reforms to promote higher employment and lower inflation. 

With this in mind, economic diversification, deepening international connections, and expanding market opportunities contributes to the overall stabilisation and security of the UK, making recent investment in trade deals and the reduction of barriers a worthwhile endeavour and necessary feature of sustainable long-term economic growth. 

Niamh Allen, Global Policy Intelligence Unit of the Sixteenth Council