Export Minister Graham Stuart issued a call for UK businesses to be part of a “national resurgence” based around exporting, during a wide-ranging webinar conversation with IOE&IT director general Marco Forgione.
More than 500 viewers registered
for the broadcast which explored how the UK could have an export-led recovery.
Where we are
Questioned about the current state of play, the Minister admitted that the impact of COVID has been severe economically, resulting in an initialdrop in tradeof more than 25%. However, the UK is recovering, he said, and by the end of June was running at 6.5%
below pre-COVID level.
Pre-COVID, the UK was also performing strongly in exports, according to UNCTAD datafor 2019.
“The UK had overtaken France and was back to fifth largest exporter in the world,” Stuart said. “Our exports grew to more the £700bn for the first time and in the 2018 export strategy our exports by that point had reached about 30% of GDP.”
The ambition is to build exports to become 35% of GDP, which would put the UK in the upper end of the G7 nations.
Bounce back plans
The Department of International Trade has a series of plans to help the recovery, the Minister said.
Its Tech Export Academy had 100 applications, and has selected 30 for mentoring and support from major companies, and will be going on a trade mission to Thailand.
Plans also cover agriculture, food and drink, with virtual meetings and ‘meet the buyer’ events designed to accelerate a return to international markets or to encourage first time exporters.
The Minister pointed to the UK’s recent FTA with Japan as an example of the model the UK was working towards. The UK is also working with Australia and New Zealand and looking to join CPTPP – the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
Encouraging exports
Asked how government could encourage SMEs in particular to embrace exporting, the Minister pointed out that exporting businesses are more productive, profitable and resilient.
However, he admitted that some companies still see it as “scary” and said the DIT was working hard to tackle concerns about red tape through SME chapters in free trade agreements established by Liz Truss, the Secretary of State for International Trade
and Stuart’s boss.
“Some of these rules, the difficulty of understanding them... remove the profitability and viability of entering markets.”
A flexible approach is necessary as the DIT sets about doing trade deals, he added.
“I would like a world in which there were no tariffs and no quotas, and everyone just did business and accepted the free market and free trade. In a world in which that doesn’t happen and multilateral deals aren’t possible, then we are very interested in
plurilateral deals (as we call them). If we can’t do that, we’ll do a bilateral deal.”
World Trade Organisation
If there is no deal after transition, the UK has said that it will trade on WTO terms.
Forgione asked about the government’s approach to the WTO.
The Minister said the organisation, which polices international trade, had “an important role to play” in creating a fair system in which small players and large powers follow the same rules.
“We aim to be the most vocal and firm supporter of liberal rules-based international order there is, and the WTO is at the heart of that.
“That’s not to say that it can’t be reformed and improved. But a world where ‘might is right’ is going to be one where there are going to be more trade frictions.”
Go for it
Asked how SMEs which have yet to export can seize the opportunity, the Minister said that digital technology made it easier than ever for UK companies to stride the world stage.
The DIT has created 43 deals with major global marketplaces to help businesses showcase their products and services. This is an easy place to start for companies exploring exporting, he said.
Markets are shifting and there is a great correlation between what the world wants to buy and what the UK produces, he said, urging businesses to become “part of a brilliant national resurgence".
“We’ve got to 31% last year of GDP. Let’s get to 35%," Stuart said. "Why do we assume the Germans will be greater exporters than us? We have the English language, we have so much creativity. The nature of trade is changing – it’s moving more to services, more to our strengths.”
