UK Trade Policy and Latin America with Rt Hon Douglas Alexander

On the morning of 11 February, Canning House welcomed the Minister for Trade Policy and Economic Security, the Rt Hon Douglas Alexander MP, for a Business Breakfast. This provided our corporate members and network with an opportunity to speak directly to the Minister regarding trading relations with Latin America.

The Minister opened by explaining that the government was writing a new trade strategy to be released this Spring, and that more attention would be given to Latin America. This plan will place trade as a key driver in the government’s wider commitment to growth in the UK.

In the context of Latin America, the conversation naturally turned to the CPTPP, which is an important component of the UK government’s approach to trade in the region. Due to the fact that the UK economy is primarily service based, the Minister highlighted the limited value of free trade agreements (FTAs) that primarily benefit trade in goods. As a result, the proposed UK-Mexico FTA is not expected to be a priority.

Those from the FMCG sector, however, are concerned that the recent deal made between Mercosur and the EU could leave British businesses behind their European competitors. Although a Mercosur-UK deal is attractive to certain industries, Minister Alexander explained that the lengthy process of striking a deal with Mercosur would likely not take place, due to the limited expected benefits and potential downsides.

Another concern for Latin American economies represented around the table is the rise of protectionism being pushed by President Trump’s tariffs. The Minister provided an analysis of the possible motivations behind the tariffs, and observed that the deeper objectives of the US administration remain unclear. As a result, his advice to those trying to respond to protectionism was to wait to see what President Trump hopes to gain from this approach. What is evident, is that a new geopolitical reality might be emerging that prioritises powerful actors and large deals.

The dialogue subsequently swung towards how the UK is approaching relations with China. The Minister made it clear that the UK is going to engage in a more pragmatic manner with China when it came to economic opportunities. He recognised that there are ongoing security concerns, but refusing to engage constructively with Beijing is not an option. This stance brings the UK closer to Latin America, which already has a close relationship with China.

To finish the morning, the Minister again emphasised that the upcoming trade policy was still being created, and that the Department of Business and Trade was keen to listen to businesses on what was important to them.

Canning House extends it thanks to Douglas Alexander for participating in the conversation about the UK’s approach to trade, and to all our guests for ensuring the event was informative and engaging.