Scotland's Vision for Trade: annual report January 2026

Part 1: Highlights from Year 4 of the Vision for Trade (October 2024 to date)

We improved the trading environment for businesses

US and global market access

We assessed the impacts of the tariff increases implemented by the US on Scottish businesses and took steps to mitigate those, in collaboration with Scottish Development International (SDI) and the UK Government. This included engaging with businesses and undertaking economic modelling of the impact on the Scottish economy overall and on particular export sectors (see also Page 9, below). As a result, we identified the most affected export sectors and products.

To mitigate those impacts, we provided ongoing advice to business on the tariffs and the movement of goods to the US and announced a 6 Point Export Plan. One element of that Plan includes the ongoing development of a bespoke US Export Plan. This will provide an evidence-based assessment of the US states that offer the strongest demand and opportunities for Scottish goods and services, enabling export support effort and activity to be focused where it will have the greatest impact.

We also maintained a high level of engagement with the UK Government on US trade to advocate for Scotland’s priority interests and to highlight sector-specific concerns, including in relation to food and drink, pharmaceuticals and services. Scottish Ministers exerted influence on a global stage on this issue, engaging with the US Administration directly to advance Scottish interests. This included the First Minister’s meetings with the US President in July and September to highlight the symbiotic partnership between the Scotch and US whisky industries. The case for whisky is now firmly on the agenda.

In other global markets, over the last year we also tackled market access barriers for important Scottish exports - pork, crabs & whisky - in collaboration with the UK Government, directly benefitting business. See below a case study on market access in China for Scottish pork exports.

Case Study: China Reopens Market for Scottish Pork Exports

In December 2024, China lifted its pandemic-era suspension on imports from some UK pork processors, including a major Scottish processor. This barrier had been highlighted to the UK Government as a priority for Scotland and its removal followed actions taken by both the UK and Scottish Governments, including during the UK Foreign Secretary’s visit to Beijing in October 2024. The lifting of restrictions will allow the processor in Scotland and others across the UK to resume exports. China is the largest non-EU market for British pork, with UK exports to China estimated at £180 million in 2023^[1]. The removal of the barrier is expected to deliver a significant boost to the sector, helping to restore trade flows and strengthen Scottish agri-food trade.

We also continued to highlight and monitor Scottish priority market access barriers in the World Trade Organization (WTO) Technical Barriers to Trade Committee, EU-UK Trade and Cooperation Agreement (TCA) Specialised Committees, and relevant WTO Trade Policy Reviews. This included publishing a position paper on Addressing Barriers to Trade with the EU.

Trade negotiations

While the negotiation of trade deals is reserved to the UK Government, modern trade deals affect a wide range of devolved interests. The Scottish Government therefore continued to promote and protect Scotland’s interests in each trade agreement under negotiation during this period. This included negotiations with the Gulf Cooperation Council (GCC), India, Republic of Korea, Switzerland, Türkiye and the UK-US Economic Prosperity Deal.

On 24 July 2025, the UK Government formally signed its FTA with India after three years of negotiations. During those negotiations, we recognised the scale of the opportunity for the Scotch Whisky industry from tariff reductions, and so advocated for this in particular, alongside wider food and drink and other sectoral priorities. The final deal demonstrates the value that Scottish inputs, and those of our key industries, can bring to the negotiating table. The reduction in Indian tariffs, including on whisky and gin, will offer significant new opportunities for our world-class food and drink exports. This outcome has been welcomed by the sector and follows sustained official and Ministerial engagement with the UK Government, supported by our close partnership with the Scotch Whisky Association.

We also engaged closely with the UK Government on the extension to the UK-Switzerland Services Mobility Agreement, secured in October 2025. This temporary extension means that, while UK-Swiss negotiations on a permanent arrangement through an enhanced FTA continue, UK services professionals, including Scottish legal services and financial firms, can continue to provide services in Switzerland through preferential mobility arrangements.

The UK-US Economic Prosperity Deal (EPD) was announced in May 2025. Since then, the Scottish Government has continued to press the UK Government to involve the Devolved Governments more in order to protect the interests of all parts of the UK and ensure the final agreement upholds the devolution settlement and devolved responsibilities. We have made clear to the UK Government that our priority is to secure tariff reductions for iconic Scottish products including Scotch Whisky and Salmon and other sectors affected by the new 10% tariff, while ensuring that any deal with the US safeguards both Scottish food standards and NHS Scotland.

Services and Digital Trade

We also built our evidence base during this period, on trends, challenges, and future growth prospects for trade in services for businesses in Scotland, to support improving our services exports. We commissioned the Fraser of Allander Institute, in collaboration with the Centre for Inclusive Trade Policy and Prosper, to examine key services exports sectors, combining available data with an analysis of global trends and insights from businesses across Scotland. We intend to publish this research in 2026. The results will inform our work to maximise opportunities for Scotland’s services providers, including through our engagement with the UK Government on trade agreements and the UK-EU TCA.

We also continued to position Scotland to take advantage of the opportunities from digital trade, by building coherence between digital trade developments and domestic digital policy. This included highlighting the importance of digital trade and Scotland’s global competitive advantages in digital, tech, and media sectors in the refreshed Digital Strategy for Scotland, published in November 2025.

World Trade Organization

We advanced Scotland’s interests at the WTO including by contributing to the WTO’s first Trade Policy Review (TPR) of the UK, following EU-exit. The Scottish Government worked with the UK Government and the WTO Secretariat to help develop their reports examining the UK’s trade policies and practices, and to answer questions from other WTO member countries. Our engagement in this process demonstrated the Scottish Government’s commitment to the multilateral rules-based trading system, as well as offering an opportunity to highlight Scottish Government policy in areas such as agriculture, fisheries and circular economy, and to raise the profile of our innovative work on quantifying and addressing the gender export gap.

Trade disputes and remedies

We successfully defended Scottish interests in the first dispute brought against the UK by the EU under the TCA, in relation to sand eel fishing. In October 2024, the EU requested the establishment of an arbitral tribunal regarding the UK Government decision to prohibit sand eel fishing in the English waters of the North Sea, and the Scottish Government decision to similarly prohibit it in all Scottish waters. As a part of the UK delegation, the Scottish Government’s extensive policy, scientific and legal input ensured that Scottish positions were accurately represented and defended. In April 2025 the tribunal delivered its ruling that the Scottish Government was not in breach of the TCA. Protecting our marine ecosystem is vital to Scotland’s environment, and to the people and communities who rely on it. The ruling reflected the robust, evidence-based and transparent public consultation and regulatory processes that the Scottish Government has in place.

We also continued to work closely with the Trade Remedies Authority (TRA) to support its investigations into unfair or potentially harmful trade practices affecting UK industry and ensure that Scotland’s trade and economic interests are identified and taken into account. To help alert Scottish businesses to the services they provide, we supported the TRA in organising a Scottish Parliament reception in June 2025, hosted by Richard Lochhead, Minister for Business and Employment.

Legislation affecting trade

We secured key amendments to the Product Regulation & Metrology (PRAM) Act during its passage through the UK Parliament, which gives the Secretary of State powers to ensure the UK’s regulatory framework keeps pace with new technologies and new developments, and affects both importers and exporters. The amendments we secured ensure that consent from Scottish Ministers will be sought where regulatory powers under the Act cover areas of devolved competence.

We also worked with the UK Government to implement the UK-Swiss Recognition of Professional Qualifications (RPQ) Agreement, which affects devolved areas of competence. We met our legal obligation to comply with international agreements by ensuring that Scottish regulators were able to meet the obligation to assess and recognise professional qualifications obtained in Switzerland.

We took action on trade’s wider impacts: on different sectors of society in Scotland, on climate and on human rights

Gender Export Gap

In February 2025 we published the Gender Export Gap Research Report, commissioned by the Scottish Government and authored by Professor Norin Arshed, Dr Stephen Knox and Dr Carolina Marin Cadavid from the Universities of Strathclyde and Stirling. This research aimed to quantify the difference that greater participation of women in exporting could make towards trade and economic targets, and to identify how the Scottish Government with its delivery partners could support that.

The research found that, if women-led Small and Medium-sized Enterprises (SMEs) exported at the same rate as male-led SMEs, total turnover could be increased by between £2.1 billion and £6.3 billion over one year and between £3.4 billion and £10.3 billion over two years. The Report also provided a series of recommendations for the Scottish Government.

In our response to the Report, the Scottish Government established a working group with key delivery partners, reporting to the Minister for Business & Employment. The Group’s remit for this year is to implement six of these recommendations:

• raising awareness of exporting opportunities for women-led SMEs
• better targeting women-led businesses in export training programmes
• including more women in trade missions
• increasing the international exposure of women’s networks
• collating gender-segregated data for exporting in Scotland
• better aligning export and entrepreneurial policy priorities

The working group has met three times and has heard directly from women-led businesses, including Raven Botanicals and PG Paper, about the exporting challenges and opportunities they face. The group’s work aligns with the Scottish Government’s wider action on women’s entrepreneurship, particularly the Pathways Report. The Chief Entrepreneur, Ana Stewart, engaged with the group on opportunities to better align export and entrepreneurial policy priorities.

Our work in this area has also garnered interest from international stakeholders. In July 2025, the Scottish Government presented in Geneva at the WTO’s Informal Working Group on Trade & Gender. This Group brings together WTO members to intensify efforts to increase women’s participation in global trade, and was chaired by Ambassadors from the UK, El Salvador and Cabo Verde. This raised the profile of the Scottish Government’s innovative work in this area and was used to encourage action in other countries: our research was cited at the meeting as an example of how increasing women’s participation in trade can significantly benefit economies.

Building evidence on the impacts of trade

We took further steps over the past year to assess the impacts that trade policy decisions have on Scotland’s people, businesses and the wider economy.

On 30 January 2025, we published a technical report, and accompanying policy summary, of new economic modelling to quantify the impact of four existing or potential UK FTAs (India, Australia, Switzerland and Türkiye) and the UK-EU TCA on the Scottish economy. The modelling considered the potential impact of those trade agreements on the economy as a whole, as well as at a sectoral level. This research was the first of its kind to look at impacts on Scotland specifically, rather than the UK as a whole. The results allowed us to better understand opportunities for Scotland from FTAs with these countries and any negative impacts, and we have used them in our engagement with the UK Government on FTA negotiations.

The analysis found that moving from EU membership to trading with the EU under the terms of the TCA has a significant negative economic impact, far outweighing the benefits expected from the four non-EU FTAs included in the analysis. However, it also showed that FTAs with India and Australia are estimated to support employment and exports across manufacturing sectors, while those with Türkiye and Switzerland could lead to small benefits for some services sectors. The analysis also explored how male and female workers could be affected differently. For example, sectors with a large proportion of female workers may see lower gains in employment resulting from the non-EU FTAs than sectors with a large proportion of male workers. It also found that some regions of Scotland are affected more than others.

In summer 2025, building on the Scotland-specific model developed to assess the impact of FTAs, we published analysis, using a structural gravity model and a Computable General Equilibrium model, of the simulated economic impact of US tariff increases. That analysis found that some sectors in Scotland could benefit from US tariff policy while others could experience a negative impact, although exports in most sectors were affected by less than 1%.^[2] It did however show that sectors for which US exports account for a greater share of economic activity may experience the greatest reduction in output and that, compared to the rest of the UK, Scotland’s food and drink sector is more impacted, driven by whisky exports to the US. This analysis provided vital insights into the potential impact of US tariff policy on Scotland’s economy, informing our work in response to those tariffs, as detailed on Page 5.

Human rights

In recent years, new and evolving global conflicts have highlighted the links between human rights and international trade, demonstrating the importance of our principle-based approach.

Following a Parliamentary Motion on ‘Scottish Enterprise Funding for Arms Companies’ in February 2025, and Scottish Enterprise’s subsequent review of its Human Rights Due Diligence checks, we worked with the enterprise agency to operationalise its enhanced due diligence procedures. Scottish Enterprise had identified improvements such as: increasing the frequency of checks; reducing exemptions; and implementing specific customer declarations addressing items and activities governed by the UK Strategic Exports Controls regime, as outlined by the Deputy First Minister to Parliament in June, and December, 2025.

In September 2025, the Scottish Government responded to the significant developments in the situation in Gaza by announcing a range of economic and humanitarian measures that it would take. This included devolved trade-related measures, in particular instructing delivery bodies to not provide support positively facilitating trade between Scotland and Israel. The Scottish Government also urged the UK Government to take immediate action to withdraw the UK from its Trade and Partnership Agreement with Israel and to prohibit imports of goods produced in Israeli settlements in the Occupied Palestinian Territories.

Climate

Over this period we engaged with business and stakeholders to help prepare for the impacts which might arise as the result of the introduction of UK and EU Carbon Border Adjustment Mechanisms (CBAMs). A UK CBAM is due to be implemented in January 2027. The EU introduced its own CBAM in January 2026.

The Scottish Government supports measures that reduce carbon leakage and help deliver Net Zero. However, we recognise the challenges for some businesses posed by the introduction of CBAMs and have highlighted those challenges to the UK Government. In addition to contributing to the development of the UK CBAM, we inputted Scottish business priorities on its interaction with the EU CBAM to shield Scottish exporters from unnecessary compliance burdens. We welcome the UK Government’s efforts to link UK and EU Emissions Trading Schemes (ETS), a long-standing ask from Scottish industry. Linking should minimise trade barriers and enable mutual CBAM exemptions. Those exemptions were not, however, achieved before the EU introduced its CBAM, and we continue to press the UK Government to negotiate for those, or for interim measures.

We also welcomed the publication of the UK Government’s Critical Mineral Strategy, in November 2025. Critical minerals are vital to Scotland’s renewable energy exports, and we recognise that international cooperation is key to ensuring supply chain resilience amid rising geopolitical and trade tensions. The Scottish Government has also commissioned ClimateXChange research on the risks and opportunities associated with critical raw materials in the context of Scotland’s renewable energy ambitions.

We responded to new developments in UK Trade Policy, including the UK Trade Strategy

UK Trade Strategy

In early 2025 we set out the Scottish Government's priorities for the UK Government’s proposed UK trade strategy, offering our support and input into its development so that it would deliver benefits for the whole of the UK. The UK Trade Strategy was subsequently published in June 2025.

We broadly welcomed the Strategy, including its consideration of a wide range of trade levers, beyond FTAs; its evidence-based approach; and the end to the previous UK Government’s unwarranted pivot away from the EU, our closest and most significant trading partner. However, we are disappointed that the UK Government developed this Strategy unilaterally, despite the significant devolved interests and responsibilities in relation to trade and its impacts. This was a missed opportunity for more effective partnership working across our four nations. In the Scottish Government’s view, the Strategy was light on commitments in its chapter on Accountable Trade and was also a missed opportunity to demonstrate that growth and inclusion can go hand in hand - for example by committing to addressing the gender export gap.

However, we are committed to working with the UK Government to deliver this strategy, including in the following areas:

• ensuring participation of Devolved Governments in the use of a range of trade policy levers beyond FTAs, including digital trade agreements, sector specific agreements, mutual recognition agreements and other trade policy tools.
• putting in place mechanisms for the Scottish Government to feed in sectoral and growth priorities on an ongoing basis, to avoid any mismatch between UK-wide priority sectors and Scotland’s priority sectors.
• ensuring complementarity of UK Government proposals to support exporters with the Scottish Government’s existing export support, this being an area in which both UK and Scottish Ministers have powers to act.
• ensuring different interests are balanced in delivering the Strategy. This includes the UK Government’s commitment to not lower food standards and uphold high animal welfare standards, while ensuring trade and environmental objectives are mutually supportive.
• working together, including with Scottish regulators, on removing regulatory barriers for UK businesses trading abroad.
• continuing our work together on market access barriers, ensuring barriers for businesses in Scotland are prioritised appropriately by the UK Government.
• engaging together on support for women-led businesses and on the UK Government’s review of the UK’s approach to responsible business conduct.

EU-UK reset

We influenced UK priorities on trade as part of the EU-UK trade reset, including in Specialised Committees and ahead of the May 2025 UK-EU summit and the Sanitary and Phytosanitary (SPS) negotiations.

As part of this we welcomed this UK Government’s intention to rebuild relations with the EU on trade. The Scottish Government published a series of policy position papers which set out our expectations for these negotiations, in particular in relation to seeking a comprehensive SPS agreement , addressing barriers to trade and closer energy and climate cooperation with the EU. These papers have been acknowledged by stakeholders as offering well-defined actions for strengthening relations with the EU.

Post EU-exit, new UK import controls were introduced via the UK Border Target Operating Model (BTOM) from 2024. In May 2025, as part of the reset, the UK Government announced a Common Understanding with the EU on negotiating a ‘Common Sanitary and Phytosanitary Area’ which closely followed our suggested approach to an SPS Agreement. If agreed, this would exempt many live animals and other goods imports from border checks. Aston University estimates that an SPS Agreement could increase UK agri-food exports to the EU by at least 22.5% and imports from the EU by 5.6%. Ministers from all four UK nations agreed to pause further implementation of the new border checks and trade barriers until an SPS Agreement is reached.

We also continued to engage actively on the implementation of the TCA to support improved trade with the EU. This included through the Specialised Committees, which are a key forum for setting out officially with the EU areas where the UK would like to see action taken to remove barriers to trade. Scottish Government trade priorities include closer regulatory cooperation between the EU and UK to facilitate hydrogen trade, increased business mobility, reduced customs barriers, in addition to mutual recognition of qualifications and of conformity assessment bodies.