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Britain's Centralised Trade Policy Is Holding Its Regions Back

  • Writer: Leeds Policy Institute
    Leeds Policy Institute
  • 18 hours ago
  • 3 min read

2026 report finds subnational diplomacy delivers real investment and jobs for regions like West Yorkshire, but centralised control and thin institutional capacity cap its impact, and sets out a framework to close the gap.

Leeds, July 2026. A new Leeds Policy Institute (LPI) report examines how far English regions can advance their own economic interests abroad through subnational diplomacy, the international engagement of governments below the level of the state. Using the West Yorkshire Combined Authority (WYCA) as its primary case study, and a mixed-methods approach built on panel regression across UK regions from 2007 to 2023, the paper finds that regional international activity produces measurable benefits in investment, jobs, and growth, yet institutional and macroeconomic constraints keep those gains small.


“West Yorkshire's international engagement produces real gains in investment and jobs, yet a combined authority with no power to negotiate trade is left trying to influence outcomes it cannot control.”

Key Findings:

  1. Regional trade delivers, but its effect is capped. Panel regression across UK regions from 2007 to 2023 shows regional exports are positively associated with employment, with a coefficient of 0.062 significant at the 1% level once controls are added. Short-term export boosts, however, show no significant effect on GDP growth, so trade activity alone does not translate into lasting regional growth.


  2. West Yorkshire punches below its weight. WYCA governs 2.3 million people and a £59 billion economy, the fourth largest English city-region outside London, yet only 11% of its firms export. The authority aims to support 500 more firms to export and lift the region's export value to £20 billion by 2026.


  3. The region has no legal seat at the trade table. Trade negotiation is reserved to central government under the royal prerogative, and the 2020 West Yorkshire Deal explicitly ruled out devolving international trading powers, leaving WYCA to influence outcomes indirectly through trade missions rather than agreements.


  4. Momentum exists, but it is fragmented. The region secured 52 new inward-investment projects in 2024, up 53% on 2023, and launched a Healthtech Bridge partnership with Nashville, but international engagement is split across five councils with no single strategy, weakening the region's profile to overseas investors. Post-Brexit regulatory barriers have affected £2.4 billion of services exports, concentrated in Leeds financial services.


Policy Recommendations:


  1. Establish a West Yorkshire International Office and Strategy. WYCA should create a single body responsible for inward investment, trade missions, and international partnership management, backed by a published strategy with clear targets and measurable outcomes, modelled on Greater Manchester, giving investors a clear view of local opportunities.


  2. Adopt a common subnational diplomacy framework. All Combined Authorities should report international activity through a shared framework covering specific deals, export and job figures, and follow-up outcomes, replacing measurement by press release with evidence that improves accountability and sharpens future policy.


  3. Create a government-led trade support body and consultation framework. Central government should give Combined Authorities a formal route to feed into national trade policy, consult them at regular intervals, and establish a dedicated fund and body to back regional priorities through data analysis, targeted funding, and follow-up, building an actionable partnership short of full devolution.


By treating Combined Authorities as partners in trade rather than bystanders to it, this policy paper sets out how better coordination, shared measurement, and a formal regional voice could turn scattered international activity into a durable source of investment and growth for West Yorkshire and regions like it.


About Leeds Policy Institute

Leeds Policy Institute (LPI) is the UK's first student-run policy unit and think tank based at the University of Leeds. Since its founding in April 2023, LPI has brought together over 100 undergraduate and postgraduate students across a wide range of disciplines to produce evidence-based, non-partisan research. All research outputs undergo rigorous internal review and are evaluated by the Academic Advisory Council. In its third year of operations, LPI members have presented at the British Conference of Undergraduate Research in London (LSE), Newcastle, and Glasgow, and have seen their work featured on national platforms including the Financial Times.


Media Contact:

Anatoly Safiulov

President, Leeds Policy Institute

+44 7849 891757


Notes to Editors:

  • The full policy paper is available upon request.

  • The paper assesses subnational diplomacy using the West Yorkshire Combined Authority as its primary case study, supported by international partnership comparisons.

  • The analysis draws on a fixed-effects panel regression across UK regions from 2007 to 2023, alongside a qualitative review of regional trade and devolution frameworks.

  • The LPI is based at the University of Leeds and produces independent, evidence-led research to inform UK policy.

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