LONDON — The United Kingdom has unveiled its strategy to help businesses navigate risks to their supply chains as tensions threaten to disrupt vital trade routes around the world.
The Critical Imports and Supply Chains Strategy, published Wednesday, addresses the impact of “geopolitical tensions” which have “already forced a restructuring of global supply chains and challenged the open, rules-based approach to trade that has facilitated international commerce for decades.”
It seeks to ensure that Britain will remain able to secure goods critical to its economic growth, such as semiconductors, green technology, and medicine, in the face of mounting threats posed by geopolitical fragmentation, trade protectionism and climate change, while avoiding reliance on “coercive states” and “unpredictable partners.”
Publication of the plan, awaited since a refresh of the U.K.’s foreign policy last May, comes as weeks of attacks by Houthi fighters in Yemen imperil the flow of goods through the Red Sea, while tensions between China and Taiwan, a major supplier of semiconductors, threaten to boil over following the election of a pro-independence presidential candidate in Taipei.
“The events of recent years have shown the world that we cannot afford to take for granted the resilience of the global supply chains which we rely on,” Industry and Economic Security Minister Nusrat Ghani writes in the foreword to the strategy, adding that “the pace of technological change is fundamentally altering the nature of the goods that economies need to remain competitive.”
Despite these challenges, however, Ghani says the U.K. will not follow other countries down the route of protectionism and aggressive industrial subsidies.
Instead, its approach “is informed by two principles: our belief in the benefits of free trade; and the belief that it is first and foremost for businesses to manage their supply chains,” Ghani writes. She will launch the plan at an event at Heathrow Airport on Wednesday.
Forecasting supply shocks
The strategy commits the government to working more closely with businesses and international partners to forecast, and adapt to, emerging barriers to trade.
The government will integrate new data sources and “cutting-edge techniques” into a “centre of excellence for supply chain analysis,” with insights shared with industry where appropriate. A framework for dealing with the most acute supply shocks will be put in place.
Whitehall will also work with businesses to identify and address barriers to securing critical imports, including through a new facility for importers to notify the government of emerging issues.
Free-trade agreements will be leveraged to strengthen and diversify Britain’s supply of key goods and the critical minerals needed to make them. And, through international forums such as the G7, World Trade Organization and OECD, the U.K. will champion “a market-led approach to supply chain resilience.”
Delivery of the strategy will be overseen by new cross-government structures, including a Critical Imports Council of officials, academics and business leaders as part of a promise to put “joint working with the businesses at the centre of our approach.”
While stressing that the U.K. will not attempt to outcompete global manufacturing giants, the government says it could build on existing packages for advanced manufacturing, batteries and semiconductors to “explore opportunities to develop domestic capability to produce critical goods.” No new funding is committed as part of the strategy.
Mike Hawes, chief executive of automotive lobby group SMMT, said the strategy “will support manufacturing agility and responsiveness.” Sean Sargent, chief executive of Green Lithium Ltd, said it “would help attract investment in the U.K.’s critical mining and refining industries.”
An earlier version of the document, seen by POLITICO, was mistakenly published by the Department of Business and Trade in December.
