The Resolution Foundation think tank has called for the government to replace the initial post-Brexit trade plan with a 'far more ambitious' strategy to help protect Britain's manufacturing firms and seek new markets for UK services firms.
A report published by the Foundation found that the UK's initial post-Brexit trade plan to secure Free Trade Agreements (FTAs) with other countries had 'been largely successful'.
However, it suggested that this approach has 'run out of road' as FTAs with the US and China 'are not on the horizon'. According to the think tank, Britain's high value manufacturing sector is 'particularly vulnerable' following the UK's exit from the EU as it often relies on being part of European supply chains.
It warned that manufacturing firms' positions in these chains will erode over time as a result of higher trade costs.
The Resolution Foundation said that a new 'twin-track' trade strategy is needed, with a defensive focus on goods and a fresh approach to promoting the UK's strengths as the world's second largest exporter of services.
Sophie Hale, Principal Economist at the Resolution Foundation, said:
'For the first time in half a century Britain needs a trade strategy. But it does not have one.
'A new strategy must recognise the nature of the UK economy, developments in global trade patterns, and rising geopolitical tensions regarding goods trade in particular. That requires a twin-track approach, protecting important high value manufacturing sectors, from cars to chemicals, struggling to retain their place in European supply chains, while focusing on new markets for its world-leading services firms.'
Internet link: Resolution Foundation website