The UK has been busy making deals with major global markets. In the span of just a fortnight, the government has announced trade agreements with the United States and India, with a long-awaited EU “reset” deal has also just been signed. While the headlines make for exciting reading, what do these developments actually mean for the SMEs, exporters, and economic policymakers of Leicester and Leicestershire?
Three Deals, One Opportunity
These three trade arrangements represent a potential turning point in the UK’s global economic outlook. Each offers distinct opportunities and challenges for the region:
- UK–US Trade Agreement
The UK’s recent agreement with the United States focuses on modest tariff reductions and reaffirmed cooperation in key sectors. While it falls short of a full free trade deal, it unlocks pathways for increased exports in automotive components, financial and professional services. The key inclusion of foundational sectors such as steel provide a resilience for a sector that has been struggling with increased energy costs. For Leicestershire, where advanced manufacturing and engineering remain regional strengths, this offers a welcome (re)opening into one of the world’s largest consumer markets. Importantly, future negotiations are expected to cover pharmaceuticals and life sciences — a sector where the region is building notable capability — potentially creating export opportunities for Leicester’s growing MedTech and biosciences community. - UK–India Trade Talks
Though negotiations are complete, the deal is yet to be implemented, the UK’s trade negotiations with India have progressed toward reducing tariffs on goods like whisky, textiles, and cars. All while improving access to each other’s business and professional services sectors. With India poised to become the world’s third-largest economy, this could be a game-changer for local firms in food and drink manufacturing, life sciences, and business services. Leicester’s textile wholesalers and independent retailers, especially along the Golden Mile, could see direct benefits. Reduced tariffs on imported saris, fabrics, and traditional garments could lower costs for businesses and consumers alike, making Indian fashion more accessible and competitively priced in local shops. - UK–EU ‘Reset’ Deal
Full details of the EU reset deal are still emerging, but it is expected to address lingering frictions from the post-Brexit trading environment. For SMEs in Leicester and Leicestershire who export into Europe — still the UK’s largest trading partner, accounting for around 42% of total UK exports in 2023 — simplification of customs and certification processes should reduce delays and cost pressures that have stifled growth since 2020. Maintaining smoother trade with the EU is especially important for local industries reliant on just-in-time supply chains and perishable goods, such as food and drink manufacturing and logistics. The standardisation of the UK and EU Carbon Border Adjustment Mechanism (CBAM) will mean easier trade of carbon intense goods such as steel and concrete – whilst also expanding opportunities in the carbon negative industries with the trading of carbon credits.
The Leicestershire Angle: Where Do We Stand?
Leicester and Leicestershire businesses are no strangers to global trade. The East Midlands exported over £22 billion worth of goods in 2023, with strong representation in manufactured goods, food and drink, creative, and professional services. Key local employers in automotive, aerospace supply chains, and MedTech could benefit directly from greater trade access.
Business support services have a vital role to play in ensuring SMEs are equipped to take advantage of these openings. With the right support on exporting skills, compliance, and market access, Leicestershire’s smaller firms can punch well above their weight.
Challenges Ahead
Of course, the deals are not without caveats:
- US and India deals may still come with caveats or complex rules of origin.
- SMEs may lack capacity to navigate regulatory environments in unfamiliar markets.
- The EU reset deal will need to go beyond symbolic gestures to offer tangible relief from the post-Brexit uncertainty.
What Should Businesses Do Now?
- Get Export Ready: Utilise support from the LLBSP’s Business Gateway Growth Hub in order to receive advice and information in getting the support your business needs. We also regularly run workshops and consultation events to understand the opportunities and challenges facing your business.
- Think Services, Not Just Goods: Leverage strengths in financial, legal, digital, and professional services that are increasingly part of global trade deals. The UK is the second largest global exporter of services, and it is an area that continues to grow.
- Collaborate Locally: Engage with the Leicester and Leicestershire Business and Skills Partnership’s events to learn more and help shape our future local growth strategies.
Conclusion
Leicestershire businesses may not have written these deals, but the input received on access to international markets during the LLBSP’s consultation have certainly helped shape what is in front of us.
The trade hat-trick signals opportunity — for those ready to act. Whether it’s the streets of San Francisco, the markets of Mumbai, or the boardrooms of Brussels, the message is clear: export ready or not, the UK is open for business.
If you’re looking to seize that opportunity, support is just a click or call away. The LLBSP’s Business Gateway Growth Hub offers expert advice, personalised training, and tailored resources to help you take the next step. Visit https://bizgateway.org.uk or call us on 0116 454 2917 to get started.