In a luxury Saudi hotel some 3,000 miles away from her economic woes, Britain’s Chancellor Rachel Reeves delivered a plucky pitch to some of the wealthiest people on the planet.

“I believe that countries are successful when they are open and trading — I think that’s good for productivity because competition spurs productivity, growth,” she told business leaders at the Fortune Global Forum last month. “And in a small and open economy like Britain’s … we want our businesses to be able to access global markets.”

With this in mind, the chancellor said, Britain was striking trade deals with the EU, the U.S., as well as fast-growing economies like India, as she teased “big opportunities” from an upcoming free trade agreement with Gulf countries.

With a difficult budget looming, the chancellor has increasingly turned her gaze overseas in her elusive search for economic growth. And with the Office for Budget Responsibility expected to downgrade the U.K.’s productivity outlook before the budget, Reeves is urging the fiscal watchdog to positively “score” new trade deals according to how much growth they might deliver.

But her efforts may be in vain. Far from being the magic bullet that will reinvigorate the economy, the benefits of trade deals may take years to materialize — and some government claims appear to be overstated, experts have told POLITICO.

EU ‘reset’ hopes

By the government’s estimation, its plans to “reset” its relationship with the European Union will add nearly £9 billion to the U.K. economy by 2040, equivalent to a GDP boost of 0.3 percent. Key elements include deals on agrifood, energy trading, and a youth mobility scheme. 

Separate analysis by John Springford, an associate fellow at the Centre for European Reform in London, is more optimistic, predicting a GDP boost of between 0.3 and 0.7 percent over ten years as a result of the agreement. The biggest uplifts, he claims, would come from a youth mobility deal. 

But negotiations on key elements of the deal have only just begun, and Springford admits details are still “a bit sketchy.” As a result, he says, it would be difficult for the OBR to accept Reeves’ ask to score these deals, which would also take a long time to play out.

Even if the government’s estimates are met, he added, the deal will do little to reverse the overall damage caused by Brexit, which the OBR estimates will reduce the U.K.’s long-run productivity by 4 percent.

“The damage caused by Brexit can never be significantly repaired without getting rid of one or all of the government’s ‘red lines’,” he continued, in reference to Labour’s refusal to rejoin the single market or customs union. 

In recent months the chancellor has talked about the impact of Brexit on the economy, but has suggested this impact can be offset by the reset deal, as well as by trade deals with non-EU countries.

“There is no doubting that the impact of Brexit is severe and long lasting,” she said in an interview with Sky News in October, “and that is why we are trying to do trade deals around the world, with the U.S., India, but most importantly with the EU, so that our exporters here in Britain have a chance to sell things made here all around the world.”

But Ahmet Kaya, principal economist at the National Institute of Economic and Social Research, said the EU deal was “more symbolic than transformative.” 

“It slightly eases checks on agri-food products, which should help certain sectors, but the macroeconomic effect is minimal considering that the government’s impact estimate is just £9 billion — which is cumulative gain over time — relative to the size of the £3.6 trillion economy.”

India free trade agreement

Reeves will also be pinning her growth hopes on the U.K.’s recently completed free trade agreement with India, which the government predicts will boost U.K. GDP by 0.13 percent, worth £4.8 billion a year. 

The deal will ultimately see India remove tariffs on up to 90 percent of U.K. exports and cut India’s average effective tariffs on U.K. goods from roughly 15 percent to 3 percent, with significant benefits for Britain’s automotive and Scotch whisky exports.

But Sophie Hale, principal economist at the Resolution Foundation, said it could take 10 to 15 years for the full effects of the deal to be felt, partly because many tariff reductions will be introduced gradually and are subject to quotas.

“Given the OBR is looking over a five-year window, we really aren’t going to expect a big impact,” she said. “Even if it was spread evenly, you’re maybe getting less than half of that by the end of the forecast, because it has to actually be implemented.”

The deal is “definitely worth having,” Hale added. “But in terms of … OBR productivity growth forecasts or shifting the dial on U.K. growth, it’s pretty small and a lot of those impacts are going to be delayed.” 

Tariff terrors

Reeves will also be hoping that the U.K.’s Economic Prosperity Deal with the U.S. — announced with much fanfare in May — will have gone some way in cushioning the impact of President Donald Trump’s punitive tariff regime.

The deal saw the U.K. hit with 10 percent baseline tariffs on most goods, with reduced duties for automotives, steel and aluminum, and increased market access for agricultural exports. 

While this gave Britain a comparative advantage over most other countries, it has still left the U.K. in a weaker trade position with the U.S. than a year ago.

According to NIESR’s latest forecast, U.S. tariffs have reduced U.K. growth by around 0.1 percentage points this year and 0.2 percentage points next year. 

“That’s a smaller drag than expected in March, reflecting the more moderate global spill-overs from tariffs, but the overall impact remains negative,” said Kaya.

But even this remains uncertain. Like the EU deal agreed earlier this year, much of the EPD remains under negotiation, including pharmaceutical tariffs, which makes it difficult to “score” in terms of its economic impact.

Making trade deals work

Even when trade deals are fully agreed and implemented, their economic impacts are not guaranteed, and it is sometimes an uphill struggle to get businesses to actually make use of them. 

“Trade deals have the potential to support economic growth, but their impact does not appear overnight and needs time and support to make it happen,” noted George Riddell, managing director of the Goyder trade consultancy. 

“Businesses need to make connections with local customers, understand local regulatory requirements and establish partnerships to help with relevant legal, tax and customs procedures.”

In the government’s trade strategy, published over the summer, the Department for Business and Trade committed to overhauling how it supports U.K. businesses and provides export advice through a “one-stop-shop.” 

“While the new website is a substantial improvement on what was there before, more needs to be done to get businesses using it,” said Riddell. 

Trade Minister Chris Bryant acknowledged this issue in a recent speech, telling businesses the estimates of the economic impact of trade deals could only be realized “if businesses are ambitious enough to exploit these opportunities.” 

“It’s not just about signing free trade agreements,” he said at a pitching event for exporters earlier this month. “We can sign FTAs, we can do all that negotiating … But it’s exploiting those FTAs once they’ve been signed that is really important and will actually drive growth.”

Looking back at the U.K.’s first post-Brexit trade deals, David Henig, director of the UK Trade Policy Project at the European Centre for International Political Economy think tank, says there is little sign of material impact.

“There is currently no evidence that the new trade deals with Australia and New Zealand have affected the U.K. economy in any meaningful sense,” he said, adding there was “nothing that indicates any permanent increase in trade so far.”

‘Beating the forecasts’

As the budget approaches, Reeves’ growth ambitions look increasingly uncertain.

The OBR has downgraded the U.K.’s productivity outlook, potentially increasing government borrowing by £14 billion and £20 billion. Just last week, figures from the Office for National Statistics show that U.K. GDP fell unexpectedly by 0.1 percent in September.

Publicly, at least, the chancellor has remained upbeat.

“My job as chancellor is to try and beat those forecasts,” she said last month, “and what we’re doing with those trade deals with India, the U.S. and the EU, the investments that we’ve secured, including from big tech companies in the U.K., shows that we have a huge amount to offer as a place to grow a business, to start and scale a business. 

“We’ll continue to secure those investments in all parts of Britain, to create those good jobs, paying wages and to boost our productivity, which means that we will start to see those numbers coming through in economic growth and prosperity for working people.”

James Fitzgerald contributed to this report.