Negotiate New Trade Agreements and Sector Deals
Labour · what the evidence says
An independent, source-checked look at Labour’s policy “Negotiate New Trade Agreements and Sector Deals” — what it would actually do across the things that affect your life. Every claim below quotes the source behind it. How this works.
Prosperity & living standards — Mixed picture
minor · moderate confidence
Targeted trade deals and sector agreements could modestly boost exports and investment, particularly in services, but the evidence suggests gains are likely small and cannot offset the much larger trade losses from Brexit. The policy's stated ambition is plausible but its actual instruments remain vague.
The evidence
- Labour will pursue targeted trade agreements aligned with its industrial strategy, expand markets for British exporters, attract FDI, seek standalone sector deals (digital, mutual recognition for services), and lead WTO/CPTPP modernisation efforts. — labour.org.uk (manifesto) — “Labour will pursue targeted trade agreements aligned with its industrial strategy and economic strengths, aiming to expand markets for British exporters and attract foreign direct investment. They will publish a trade st…”
- Labour will not return to the EU single market, customs union, or freedom of movement, but will seek to improve the UK-EU trade relationship. — labour.org.uk (media) — “there will be no return to the single market, customs union, or freedom of movement with the EU, but will seek to improve the UK's trade and investment relationship with the EU by tearing down unnecessary barriers”
- UK goods exports grew only 0.3% annually 2019-2023, far below the OECD average of 4.2%. — resolutionfoundation.org (institutional) — “The value of UK goods exports rose by only 0.3% annually between 2019 and 2023, far below the OECD average of 4.2%”
- UK services exports grew at 7.5% per year 2019-2023, exceeding the OECD average of 6.1%. — resolutionfoundation.org (institutional) — “services exports grew at 7.5% per year, exceeding the OECD average of 6.1%”
- The OBR estimates that both UK exports and imports are around 15% lower in the long run than if the UK had remained in the EU. — davidmclaughlin2025.substack.com (media) — “both exports and imports are around 15% lower in the long run than if the UK had remained in the EU”
- The OBR states new trade deals with non-EU countries are unlikely to have a material impact on replacing the trade lost with Europe. — davidmclaughlin2025.substack.com (media) — “new trade deals with non-EU countries are unlikely to "have a material impact" on replacing the trade lost with Europe due to Brexit”
- The OBR forecasts the post-Brexit TCA will reduce long-run productivity by 4% relative to remaining in the EU. — obr.uk (institutional) — “The OBR also forecasts that the post-Brexit Trade and Cooperation Agreement (TCA) will reduce long-run productivity by 4% relative to remaining in the EU, largely due to increased non-tariff barriers”
- The UK-India FTA (signed May 2025) is predicted to add £4.8bn annually to the UK economy and £2.2bn annually to UK wages. — hawksford.com (media) — “Predicted to add an additional £4.8 billion annually to the UK economy, £2.2 billion annually to UK wages, and save UK exporters up to £400 million a year from reduced levies in India”
- The UK government's own analysis projects CPTPP membership will yield a modest long-run GDP increase of 0.08%. — vertexaisearch.cloud.google.com (media) — “The UK government's analysis projects a modest long-run increase in GDP of 0.08%”
- The US Economic Prosperity Deal covers only about a quarter of UK goods exports to the US and does not cover services. — economicsobservatory.com (media) — “The deal is noted to cover about a quarter of UK goods exports to the US and does not cover services, leading to doubts about a large-scale boost to the UK economy”
- Resolution Foundation argues that a high volume of FTAs is not the best tool for a service superpower, as typical increases in financial services trade from such deals (5-17%) are much lower than for goods (54-97%). — economy2030.resolutionfoundation.org (institutional) — “a high volume of FTAs is not the best tool for a "service superpower," as typical increases in financial services trade are much lower (5-17%) compared to goods trade (54-97%) from such deals”
- Maintaining the UK's global share of services trade could be worth an additional £200bn in exports by 2035. — economy2030.resolutionfoundation.org (institutional) — “Maintaining the global share of services trade could be worth an additional £200 billion in exports by 2035”
- ECIPE suggests the UK's trade policy has struggled due to a persistent divide over its EU and US relationships, leading to shallow FTAs with modest gains. — ecipe.org (media) — “the UK's trade policy has struggled due to a persistent divide regarding its relationship with the EU and the US, leading to "shallow" FTAs with modest gains”
Biggest unknown: Whether sector-specific deals and mutual recognition agreements can meaningfully close the services-trade gap relative to single-market membership, or whether global trade fragmentation will limit their value.
Our reading: The evidence presents a genuinely mixed picture. On the upside, targeted sector deals — especially in services, digital trade, and mutual recognition — are well-matched to where the UK economy is genuinely competitive. Services exports are already outpacing OECD peers, and the Resolution Foundation estimates that maintaining that share could yield £200bn in additional exports by 2035. Concrete deals already in or near train (UK-India FTA, CPTPP, UK-US partial deal) show the approach can deliver measurable, if modest, gains: the India FTA is forecast to add £4.8bn annually and CPTPP membership a 0.08% long-run GDP uplift. The policy's emphasis on sector deals and mutual recognition aligns with what analysts say actually works for services trade. On the downside, the OBR's position is unambiguous: new non-EU deals will not materially replace the trade lost with the EU, where both exports and imports are estimated to be 15% lower long-run and productivity 4% below its counterfactual. The deals signed so far (CPTPP, UK-US partial) are modest in aggregate effect. The Resolution Foundation also cautions that volume-led FTA strategies are poorly suited to a service economy. Global trade fragmentation further clouds the WTO reform ambitions. The policy contains real instruments (sector deals, MRAs, digital agreements) rather than purely aspirational language, which moves it past the soft-verb threshold. However, the scale of realistic gains is clearly minor relative to the structural trade deficit created by the EU departure, which this policy explicitly does not seek to reverse. Near-term effects are likely negligible; long-term, the marginal contribution to prosperity is positive but modest, particularly in services. The verdict is mixed/minor: real potential in services and specific sectors, materially offset by the structural context and limited scale of available deals.
Good work & fair pay — Mixed picture
minor · moderate confidence
New trade deals and sector agreements could open export markets and boost wages in some industries, but the overall effect on pay and jobs is likely modest and uneven — services workers may gain more than goods workers, and much of the Brexit-related trade damage will remain unaddressed.
The evidence
- The policy aims to expand markets for British exporters and attract foreign direct investment through targeted trade agreements and sector deals. — labour.org.uk (manifesto) — “aiming to expand markets for British exporters and attract foreign direct investment”
- The policy targets standalone sector deals in areas like digital and mutual recognition of professional qualifications. — labour.org.uk (manifesto) — “seek standalone sector deals (e.g., digital, mutual recognition agreements for services) to promote exports”
- UK goods export growth has been very weak since Brexit, far below the OECD average. — resolutionfoundation.org (institutional) — “The value of UK goods exports rose by only 0.3% annually between 2019 and 2023, far below the OECD average of 4.2%”
- UK services exports have grown faster than the OECD average, suggesting comparative advantage there. — resolutionfoundation.org (institutional) — “services exports grew at 7.5% per year, exceeding the OECD average of 6.1%”
- The UK-India FTA is predicted to add £2.2 billion annually to UK wages. — hawksford.com (media) — “£2.2 billion annually to UK wages, and save UK exporters up to £400 million a year from reduced levies in India”
- The OBR has said new non-EU trade deals are unlikely to have a material impact on replacing trade lost with Europe. — davidmclaughlin2025.substack.com (media) — “new trade deals with non-EU countries are unlikely to "have a material impact" on replacing the trade lost with Europe due to Brexit”
- The OBR estimates Brexit has reduced UK exports and imports by around 15% in the long run. — davidmclaughlin2025.substack.com (media) — “both exports and imports are around 15% lower in the long run than if the UK had remained in the EU”
- Maintaining global services trade share could be worth £200 billion in additional exports by 2035. — economy2030.resolutionfoundation.org (institutional) — “Maintaining the global share of services trade could be worth an additional £200 billion in exports by 2035”
- FTAs typically deliver much smaller boosts to services trade than to goods trade, which limits gains for a services-dominated economy. — economy2030.resolutionfoundation.org (institutional) — “typical increases in financial services trade are much lower (5-17%) compared to goods trade (54-97%) from such deals”
- The IFS notes trade patterns can affect different workers and regions unequally. — ifs.org.uk (institutional) — “their broader work on trade often focuses on its impact on inequality and the labour market, highlighting how trade patterns can affect different workers and regions”
Biggest unknown: Whether sector-specific deals (especially services mutual recognition) can be concluded and implemented at sufficient scale to offset the ongoing drag on trade from post-Brexit barriers.
Our reading: This policy targets trade expansion through FTAs, sector deals, and multilateral reform. For O4, the transmission mechanism is: more export opportunities → higher demand for UK labour in exporting sectors → better pay and job security. The evidence shows this is directionally plausible but modest and uneven. On the positive side, the UK-India FTA projects £2.2 billion in annual wage gains, and strong services export growth (7.5% per year) suggests real upside if sector-specific mutual recognition and digital agreements can be concluded. On the negative or limiting side, the OBR is explicit that non-EU deals will not materially replace Brexit-related trade losses — losses estimated at 15% of both exports and imports. The post-Brexit productivity hit means the baseline for workers is already impaired in ways this policy cannot fully address. The distributional picture matters too: services workers (professional, digital, financial) stand to benefit most from mutual recognition deals and digital agreements, while goods workers in exposed sectors face ongoing competitive pressure and have not seen the export recovery. FTAs typically boost goods trade far more than services trade, yet the UK's comparative advantage now lies in services — a structural mismatch the Resolution Foundation flags directly. The policy's sector-deal emphasis is a reasonable response to this, but services trade barriers are regulatory and harder to remove than tariffs, making delivery uncertain. The net verdict is 'mixed/minor': genuine upside for some workers (particularly in professional services and export-facing industries where deals land), but limited aggregate wage effect given the scale of Brexit trade drag that remains unaddressed, and uneven distribution of gains across the workforce. The long-term horizon reflects that FTA implementation typically takes years to affect labour market outcomes.