Modelling impacts of free trade agreements on the Scottish economy: policy summary

Background

The analysis models the impact of a range of UK Free Trade Agreements (FTAs), both already in force and still under negotiation, on the Scottish economy. The trade agreements covered are those with Australia, India, Switzerland, Türkiye and the UK-EU Trade and Cooperation (TCA) agreement.

While the UK Government has already provided impact/scoping assessments^{[1][2][3][4][5]} of the above trade agreements, these assessments consider impacts on the UK as a whole, and do not explore impacts on specific sectors, regions and groups within Scotland in detail.

This analysis aims to close this evidence gap by quantifying the impact of agreed or proposed FTAs on key sectors of the Scottish economy and any distributional impacts of these changes, including by gender and region.

However, the analysis does not model the exact terms of each trade agreement, as signed between the UK and other partners, but instead uses an average trade deal. This is a well-established approach in trade literature. Further information on economic modelling techniques used to provide these results, and their limitations, are available in the analytical report linked above.

The findings of this work will inform the Scottish Government’s engagement with the UK Government on the negotiation and implementation of FTAs. They will also inform the Scottish Government’s work to better understand and address any differential impacts of trade, in line with Scotland’s Vision for Trade.