3 key findings from our Global Trade Outlook

As Secretary of State for Business and International Trade, I want to ensure that businesses across the UK can take advantage of the growth opportunities available at home and overseas.???

A forward-looking approach to trade is central to this ambition, as the decisions we make about our trade relationships today can have a big impact for British businesses over the long term.??

That is why today, the Department for Business and Trade has published our latest Global Trade Outlook. Building on our 2021 report, it sets out the broad contours of how global GDP and trade could evolve by 2050, helping us look into the future and plan accordingly.??

This outlook helps us to chart a clear course towards the 5 priorities for trade that I set out at the start of the year which will grow the UK economy and help our businesses export more, create jobs and increase wages.??

The report makes clear that despite turbulence on the international stage over the past 18 months, the long-term dynamics that will shape our trading future – and the opportunities that the UK will need to grasp – remain resilient.???

Here are some of our key findings:???

First, the focus of economic power continues to shift East.???

Emerging markets, particularly in the Indo-Pacific, promise to be a powerful driver of global growth in the coming decades. This affirms our ongoing strategy and tilt towards the Indo-Pacific. For the UK, it means more fast-growing markets to partner with.??

That is partly why our Free Trade Agreement programme is focused where it is.? We have already secured new FTAs with Japan, New Zealand, and Australia. And we continue striving for high quality deals with our negotiating partners in the wider #CPTPP, the Gulf Cooperation Council (#GCC), and #India, who are expected to account for almost a quarter of global trade growth over the next 30 years.????

Second, rising global incomes and an expanding global middle class will create significant opportunities for UK trade, with 700 million more individuals on incomes equivalent to the UK average by 2050.??

Based on our estimates, the number of individuals above the World Bank’s high-income threshold will almost double to 3.5 billion by 2050 from 1.8 billion today. Within that, 1.2 billion people will be on incomes equivalent to the UK. In line with our Indo-Pacific trade tilt, most of that growth will come from outside Europe and North America.??

But this doesn’t mean we are ignoring the North Atlantic. Europe and North America remain vital sources of demand for UK exports. That is why we continue to negotiate market access agreements with those regions – like the UK-Italy export and investment partnership signed earlier this month. Removing market access barriers helps us make strides towards our race to grow UK exports to ￡1 trillion a year and makes a real difference to businesses of all sizes that export or are looking to export.??

Third, rising incomes in emerging markets and the digitalisation of trade should drive rapid growth in demand for services.????

Over the last couple of years, the reorientation of trade toward services has been disrupted by the pandemic-related surge in demand for consumer goods and the war-induced spike in commodities prices. But as emerging markets grow richer and rebalance demand towards services, and as technological innovations drive further rises in digital trade, we can reasonably expect global services trade to resume its upward trajectory, as seen in most of the past decade.???

As the world’s second largest services exporter, this is good news for the UK.? But we can only take advantage of this trend if we can lower the still-formidable barriers to services and digital trade. This is why removing such barriers is a key priority of mine going forward, making it easier for UK businesses to access key markets for their goods and services.??

That is also why, as an independent member of the WTO, we are working across the membership, to protect and shape the global rulebook in these priority areas and others, to ensure it is fit for a 21st Century global economy.??

You can read the full report here: https://www.gov.uk/government/publications/global-trade-outlook-february-2023-report