Trade is key to UK prosperity

As one of the world's largest trading nations, the UK depends on international trade for its continued economic prosperity. The trade and investment links between the UK and US make this one of the most important economic bilateral relationships in the world. The US is the UK's largest non-EU trading partner. The UK is by far the largest investor in the US, with a foreign direct investment stock of $411bn - the comparable figure for Chinese investment in the US is $1.1bn. In 2005, UK companies employed over 900,000 Americans, while US companies employed over 1.25 million Britons. And these jobs pay well - the average American worker employed by a British company takes home $72,000 each year.

Realising the benefits of trade for all nations

The UK is committed to promoting a low carbon, high growth, global economy with an open, rules-based, multilateral trading system at its heart. There is much more that can be done to realise the full benefits of open trade and investment flows. In many OECD countries tariffs remain higher than 15% in industrial sectors such as clothing textiles, footwear, motor vehicles - and, most importantly, in agriculture. In non-OECD countries tariffs in excess of 15% typically cover as much as three quarters of tariff lines. We believe that the best way to bring down tariffs and trade-distorting domestic subsidies is through the current round of World Trade Organisation negotiations, the Doha Development Agenda. The DDA is our top trade priority. We will be looking to work closely with the new US Administration to conclude a balanced and ambitious deal in 2009.

Too often, the development aspect of trade is absent from debates about policy. The UK Government is deeply committed to tackling global poverty, and we strongly believe that trade policy needs to be linked with economic development in poor countries. It is critical for us that a DDA deal lives up to its middle 'D' and unleashes the developmental potential of trade. While the role of trade in development is complex and there is no simple formula for economic success, over the past thirty years those countries with the highest levels of integration in the world economy have achieved the fastest growth in living standards. Boosting the economic development of poorer countries has been at the heart of UK trade policy for the last 10 years. It is our strong belief that the objectives of global poverty reduction and UK competitiveness and market access can be mutually reinforcing.

Below, you will find three success stories, showing how trade can improve the lives of the poor. These stories illustrate that for trade to have the greatest impact we need to boost both the demand for goods from poor countries (for example, by giving Least Developed Countries open access to our markets) and the supply of goods from the countries (for example, through aid for trade).

Trade success stories

One Stop Border Post between Zimbabwe and Zambia

South Africa Regional Trade Facilitation Programme

Ethiopian Coffee Trade Marking Project