We’re very much into the final straight of EU negotiations but despite wranglings of the Irish border and varying preferred versions of Brexit from within British politics, a favourable deal offer is already on the table – and has been from the very start.

That’s according to Jean-Claude Juncker, President of the European Commission, who said this week that: “From the very beginning, the EU offer has been a Canada+++ deal. Much further-reaching on trade, international security and foreign policy cooperation. This is the true measure of respect and this offer remains in place.”

He went as far as to suggest a deal could be reached within weeks, if not October then by the end of November.
This news will be welcomed by pretty much everyone, from UK businesses small and large and those who are geared towards keeping close ties with EU neighbours – as well as those who voted remain in the first place.

So, presuming a Canada+++ deal is struck, or at least a very close variant, what can British businesses expect?

‘Super Canada’

So what is Canada+++? Also referred to as Super Canada, this agreement would be based heavily on the agreement which Canada has with the European block regarding trade and numerous other integrations. But the +++ element will mean a ‘much further-reaching on trade, on international security and on foreign policy cooperation’.

Read more: Meet the sectors not overly concerned by Brexit

Canada’s current deal with the EU took seven years to negotiate and, although still undergoing ratification, its aim is to remove nearly 96% of tariffs between Canada and EU member states, although charges will remain on food and agriculture.

It’s almost unanimously frictionless trade, but without Canada having direct access to the EU’s financial, energy or aviation markets – three critical markets for the UK.

So that’s where the +++ suffix comes in.

Under Junker and Donald Tusk’s proposals, the UK would retain access to these critical markets, avoid the majority of tariffs for all markets and also, and crucially for Brexiteers, be able to negotiate further trade deals with countries outside the EU.

But if it sounds too good to be true, that’s because it likely is. Such a deal would leave Britain potentially far better of as a result of Brexit. The same close ties across security and policy-making, frictionless trade AND freedom to develop trade agreements. The EU is certain to ensure that the UK doesn’t set an example of the benefits which can be gained from angling to leave.

So, Canada+++ will likely include some sizable caveats. Britain, put simply, will not be allowed to freely ‘cherry pick’ what it wants.

The main caveat is likely to be surrounding the free movement of people, a major reason why 52% of those who voted in the UK referendum crossed the ‘leave’ box. This won’t sit well with the general public or politicians who would deem agreeing to such a caveat as in direct contrast with the ‘will of the British people’.

Another caveat will be that the UK would still have to abide by numerous EU laws but without having a direct say in how those laws are constructed and implemented, many of which could apply to trade that UK companies are carrying out.

And then there is the primary issue – the Irish border for which many suggest Canada+++ would only apply to mainland Britian, creating a virtual customs border in the Irish Sea.

This is a red line for Theresa May and indeed Arlene Foster.

However, David Davis, Boris Johnson and Nigel Farage have all earmarked a boosted Canadian deal as a clear step in the right direction.

What Canada+++ would mean for business

So, despite a lot of wrangling and late-night meetings in the run-up to deadline day to be had, what would a Super Canada deal look like for British businesses? How much would change?

Firstly, there would be no cliff-edge scenario, and little reason for EU buyers to seek trade with providers closer to home as the majority of goods exchanged would remain tariff-free.

It would also drastically cut the period of uncertainty that would otherwise arise from a no-deal scenario where the UK would need to negotiate potentially hundreds of bilateral trade agreements with EU member states. Investment in British companies would likely continue at a similar pace and confidence in the UK economy would benefit compared to other potential Brexit routes.

But Canada+++ is, in essence, a generous free trade deal and not a legally-binding free-market access card, so certain goods and services may still entail charges and tariffs and levels of disruption, albeit a small proportion.

The amount of paperwork involved might also increase as exported UK products could undergo quality and regulatory-compliance checks once it arrives at EU trade ports. This, though, can be negotiated away as Canada has done in their agreement, although checks can be brought in by either party in the future should they choose.

There would also be no limitations for EU investment within the UK from companies or indeed foreign governments, and the UK would be essentially free to negotiate new trade deals with international partners.

A Canada+++ deal would also offer a number of protections. Intellectual property rights will remain unaffected, and a British musician would still be able to obtain royalties if their song is played in a Spanish cafe.

Read more: Have UK manufacturers already lost out because of Brexit?

Also, geographical indication protections will remain in place. So, Scotch whisky can only be bought and sold across the block if it has indeed been made in Scotland. The same will remain true of Cornish clotted cream, Jersey royal potatoes and the Cornish pasty too.

But Super Canada is just one potential outcome of the Brexit negotiations. The UK could crash out of the EU on WTO rules which would cause major upheaval for both UK and EU trading partners.

With less than six months to go before a deal is or is not struck and the two-year implementation period is entered, the critical advice for all exporting businesses is to ensure they’re prepared for any eventuality. Find out how Go Exporting’s Brexit consultancy can help safeguard your company’s trading future here.

It’s been another topsy-turvy few weeks in the business of Brexit as Labour reaffirmed its position and likelihood of rejecting pretty much any deal which Theresa May manages to bring back from Brussels.

But towards the back-end of this week, the rhetoric has become slightly more positive with the chances of a Brexit deal having ‘increased’ according to the European Commission.

Combine that with chief negotiator Jean-Claude Juncker confirming that a Canada+++ offer is well and truly on the table for Britain and things might appear to be heading in the right direction.

He noted that: “From the very beginning, the EU offer has been a Canada+++ deal. Much further-reaching on trade, internal security and foreign policy cooperation.

“This is a true measure of respect. And this offer remains in place.”

But his news conference was also barbed with accusations that confusion amid Britain’s own demands is holding up the process – and it’s that confusion which may have already proven costly for some manufacturers in the UK before a deal has been struck or an agreed deadline passed.

A report carried out by the University of Sussex surveyed 1,000 exporting manufacturers in the UK and found that one in three had already started to feel the negative impact of Brexit through loss of business or decreases in investment. Some reported a sales shortfall of up to 30%.

Many of those quizzed noted that they were preparing for a cut in investment in the short to medium term, whilst other firms also highlighted concerns surrounding a shortfall of skilled workers.

Professor Alan Winters, part of the University’s UK Trade Policy Observatory said of the results that: “Our research reveals that Brexit is already impacting British exports.

“In the event of a no-deal exit from the European Union, Britain’s trade with the EU will be badly hit, hundreds of thousands of jobs will be at risk and real wages are likely to be cut.”

Read more: Meet the sectors not overly concerned by Brexit

But its delays and the ultimatum of a ‘no deal’ which concerns UK manufacturers most of all. A report released alongside the study from Euris, a task-force of 13 UK trade associations monitoring and assessing the impact of Brexit, stated that: “Our industry needs clarity and a withdrawal agreement confirmed with the European Commission in the autumn.

“As this report and our member survey clearly show, further delays and the risk of no-deal will result in significant long-term damage to the UK manufacturing sector.

“Those UK manufacturers who are in supply or value chains with companies based in EU27 states will likely find that they lose contracts and are dropped from tender lists as their customers or corporate groups seek to preserve their ability to certify the end product as being of EU origin.”

Larger scope of business sectors more optimistic

Despite the doom, gloom and stark warnings of the University of Sussex’s report, across a wider range of UK business sectors, the outlook is a little more optimistic.

Further research carried out by Close Brothers Asset Finance found a number of sectors whose current outlook is that Brexit is more likely to have a limited impact on their business.

Indeed, whilst 32% of wholesale and distribution firms said they thought their business would suffer as a result of Brexit, 60% of those firms also said they thought their business would neither benefit OR suffer.

Recruitment companies reported that they expect to see a beneficial outcome from Brexit, potentially as any skills gap can inflate wage demands and as such agency fees.

Read more on that report here.

There appears to be something of a thought gap when it comes to Brexit and business. On the one hand, various politicians thought leaders and media outlets will tell you the disaster that will incur after leaving the EU – especially in a no-deal scenario.

But the other hand, held by businesses on the ground across the country, appears rather more relaxed and even lackadaisical with the whole prospect.

In a write-up last week we noted how many exporting SMEs are yet to factor in Brexit with just 34% of those asked in a far-reaching study saying they had a specific post-Brexit exporting plan.

And further research from Close Brothers Asset Finance suggests that there are specific sectors who aren’t overly concerned by leaving the EU at all and think it will have little impact on their operations.

More on those sectors later on.

The study, which surveyed 900 firms, found just 29% said Brexit would cause harm to their businesses and reorganising of the supply chain would be required.

Twenty per cent said they believed their businesses would actively benefit from leaving the European Union.

On the research, CEO at Close Brothers, Neil Davies commented that: “Looking at the figures, with 51% selecting the ‘neither’ option, it’s clear that the continued uncertainty means businesses have little idea of the impact a reorganisation will have.

“It’s not something they have ever had to deal with on this scale.”

So which sectors are worried, and which aren’t overly concerned at all?

As you can see from the table above, a high proportion of sectors are learning more towards thinking that Brexit will have little impact on their business – including print & packaging, wholesale, distribution, services and retail.

And as you’d likely expect, it’s the sectors which regularly do business on an international stage that are most concerned, such as transport, haulage, engineering, manufacturing and also wholesale & distribution – a sector that is least optimistic of Brexit delivering tangible benefits over major headaches.

“It clearly demonstrates that in the absence of certainty, businesses have taken it upon themselves to assess the impact leaving the EU will have on the supply chain which, for many businesses exposed to Europe, is critical,” concluded Davies.

Read more: Many exporting SMEs yet to factor in Brexit

“In the key sectors that have strong relationships in and with Europe, including engineering, manufacturing and transport, planning is advanced and above the national average of 47% who admitted they’d started their planning.”

But is the lack of apparent concern down to a lack of understanding of export markets and how they operate, or the misunderstanding of how closely tied Britain and the EU are as a trading block? Do businesses understand the complications of a no-deal Brexit?

If your firm needs advice and wants to ensure all angles are covered, whichever Brexit is delivered, you can talk to Go Exporting about our Brexit consultancy services.

Liam Fox has written an article for The Sun in which he encourages Britain’s small businesses to become ‘intrepid exporters’ whilst reinforcing the view that Brexit is a pathway by which the UK can become a trading superpower.

The International Trade Secretary has been busy on the public relations front, sharing positive and motivational business call-to-arms in a bid to change the commercial mindset in the run-up to 29th March from that of retreat to a tone of conquering instead.

The main line is hard to argue with – countries and businesses around the world want to business with Britain, as Fox writes: “EVERYWHERE I go across the world, everyone I meet tells me that they believe in Britain.

“They want to buy British products, use British services, learn English. They trust our laws and our financial services, they admire our Armed Forces and they envy our universities.

“Actually, that’s not quite true: everywhere I go in the world, except right here in the UK.

“Britain can and should be confident and the world needs a confident Britain. A confident Britain can bang the drum for free trade across the world, as more and more countries look to pull up the drawbridge and turn away from the huge benefits that we have seen in poverty alleviation.”

Fox’s article prepends a week in which Theresa May has been dancing her way from one African state to another discussing future trade, whilst the rhetoric in Brussels has also changed from that of playing hardball to a little friendly, maybe even neighbourly, support, with Michel Barnier teasing that “We are prepared to offer a partnership with Britain such as has never been with any other third country.”

Read more: New government export strategy aims to make Britain ‘ 21st-century exporting superpower’

Two days later though and headlines on any Brexit-related Google search are met with the following headlines:

– Barnier ‘strongly opposed’ to May’s Brexit plan
– RBS warns of no-deal Brexit loss of customers

Still a long way to go then.

A new export strategy from the UK government aims to boost total exports to 35% as a proportion of GDP.

The new plans aim to ‘make Britain a 21st century exporting superpower’ after extensive consultation with local businesses across sectors. Plans also set out targets to increase productivity, wages and job security.

International Trade Secretary, Liam Fox announced the plans to increase exports through better use of the UK’s overseas network, new online technologies and growing an extensive B2B network.

Fox noted that: “The United Kingdom is a great exporting nation and our exporters lead the way, in creating jobs, raising wages and growing our economy.

“UK businesses are superbly placed to capitalise on the rapid changes in the global economic environment and I believe the UK has the potential to be a 21st century exporting superpower.
As an international economic department, we are determined to support, connect and grow UK companies on the world stage through our international network.

“As we leave the EU, we must set our sights high and that is just what this Export Strategy will help us achieve.”

UK exports already reached record levels last year with £620 billion of goods and services sold abroad by British firms, accounting for 30% of GDP. And whilst research indicates that businesses that do sell abroad have higher growth potential, around 400,000 local companies don’t export even though they suggest themselves that the opportunity to do so is available.

This new export strategy looks to address this, as well as boosting export opportunities for Uk forms of all sizes, by producing smarter and more bespoke support solutions. Four primary strategies include:

• • Encouraging and inspiring more companies to export, in part by promoting local success stories and facilitating peer-to-peer learning
  • Providing practical advice and assistance on exporting, partly through digital enhancement of the great.gov.uk platform and potential financial incentives to further encourage export start-ups
  • Connecting British businesses to international markets and buyers, as well as tariff support
  • Raising awareness of the up to £50bn in export finance and insurance support available through UK Export Finance

Director general of the Institute of Directors, Stephen Martin, commented on the new export strategy: “Maximising trade opportunities across the globe will be key to the UK’s future economic success, so we welcome this new export strategy, which provides a solid foundation upon which to build.

Read more: Over 5,000 UK firms paused export plans over Brexit, but are they being too cautious?

“The government deserves credit for investing time and effort in working with business to draw up this strategy, and we are delighted that a number of the IoD’s recommendations have been incorporated.

“Improving the UK’s export performance will depend upon many variables, but the good news is that there is plenty that can be done now to help businesses, irrespective of Brexit.

“We will be encouraging our members to engage with government to make sure this strategy really takes off and enables British firms to realise their full trading potential.”

Over 5,000 UK companies paused exporting plans in 2016 as a result of the Brexit referendum result.

That’s according to research released last month by academics at Cambridge, whose report also suggested that nearly 4,000 companies actively stopped exporting over uncertainty surrounding future trade rules and border taxes.

Academics Meredith Crowley, Oliver Exton and Lu Han predict that the resultant pause or cease of export activity from the combined 9,000 firms took 1% off Britain’s exports for the year, more concerning with the potential for those exporters to have become major international sellers as new markets and agreements were explored.

“We estimate that the decline in entry reduced the value of exports by between £226m and £1.4bn in 2016, a small total value relative to total exports to the EU in 2016 of £140bn.”

How to balance Brexit export fears with growth plans

The big question facing UK companies that are either planning to start selling abroad or already current are is, what do we do next?

With the torrid nature of current negotiations taking place in Brussels and the various levels of hard and soft Brexit’s potentially on offer, you can see where the 9,000 businesses deciding to retain what they have instead of pushing for international growth are coming from.

There are three potential trains of thought that business heads can ponder;

1. Retreat and retain
2. Keep calm and carry on
3. Accelerate global growth plans

Retreat for the businesses noted in the Cambridge report was the clearly the winning (whilst losing) option on the table.

What business owners need to remember is that the EU want a deal, and EU businesses want to trade with UK companies. Only last month we wrote about another report highlighting how demand for British food and drinks products are surging – up 10% in just 12 months.

For those leaning towards the keeping calm and pressing on line of thinking, it’s also worth noting that total exports last year reached a record £616bn. If your competitors are losing their nerve and leaving the export market, particularly within the EU block, that’s one huge opportunity just waiting for you to sweep in and take.

And for ambitious firms looking to grow through the potential pot-holed road ahead, British exports to non-EU states are on the rise and demand is growing, with International Trade Secretary Liam Fox noting that: “British goods remain in global demand as exports to non-EU countries continue to grow.

“It shows the confidence the world has in our goods and is important as 90% of growth in global trade will come from outside the EU.”

Getting the right support

There is no doubt about it, BREXIT is going to be a challenge for all EU companies that export either from the UK or into the UK. The simplicity of the Single Market and Customs Union has been taken for granted and there is a generation of business people out there which has never experienced the headaches of customs declarations, duties, VAT payable on import, deferment numbers, apostilles, Chamber of Commerce attestations.

Go Exporting’s Brexit consultancy can help you navigate the minefield. Find out more about our Brexit consultancy.

The UK’s global exports reached a record £616bn last year with both goods and services seeing marked growth.

Exports to non-EU countries in 2017 were valued a £342bn, 55% of total export value, with £274bn in EU exports.

Good exports soared 13% to £339bn over the year, whilst services increased 7% to £277bn.

Interestingly, key growth markets for UK exporters since the turn of the decade include Macedonia, up 318% to a value of £1bn, and Kazakhstan by over 200% to £2bn. The fastest growth market was Oman where exports have increased by over 350% to £3bn since 2010.

Nearly one-fifth of all exports were sold to the US.

Data from the Office for National Statistics highlight an overall trade deficit of £25.8bn (reduced by £5bn) but an increasingly positive picture so far in 2018 with exports growth of 5% in H1 and a service-sector trade surplus of £111bn.

‘British goods remain in global demand as exports to non-EU countries continue to grow’

International Trade Secretary, Liam Fox, said that: “British goods remain in global demand as exports to non-EU countries continue to grow.

“It shows the confidence the world has in our goods and is important as 90% of growth in global trade will come from outside the EU.

Read more: Dragon’s Den host Evan Davis talks business after Brexit

“As an international economic department, we have a dynamic and experienced team who will negotiate free trade deals and make a success of Brexit.

“We’re also supporting UK businesses in exporting more and talking to international businesses on why we should be the top destination for investment.”

Nagging Brexit Uncertainty

But despite UK export performance over the last 18 months defying expectations, Fox noted Brexit and a potential no-deal scenario still looms large.

“I think the intransigence of the commission is pushing us towards no deal.

“We have set out the basis in which a deal can happen but if the EU decides that the theological obsession of the unelected is to take priority over the economic well-being of the people of Europe then it’s a bureaucrats’ Brexit – not a people’s Brexit – then there is only going to be one outcome.

“It’s up to the EU27 to determine whether they want the EU Commission’s ideological purity to be maintained at the expense of their real economies.”

Dragons’ Den presenter and economist Evan Davis says nobody really knows what direction business after Brexit will go and many are still waiting to see what Brexit actually means.

In a radio interview with New Zealand-based NewstalkZB, Davis spoke extensively on Britain’s business uncertainty post-Brexit.

The famed presenter and host of predominantly startup and SME business investment programme Dragons’ Den, the first question put to Davis was; ‘Is Britain an entrepreneurial country’?

“Probably not enough. Where we don’t seem to do so well is building those businesses up to £100 billion values. We create great businesses and then they get sold off.

“There seems to be some gap where we struggle to build up the giant.

“But I will say this. London now is seen as a hub of a lot of entrepreneurial activity, particularly around FinTech because we have the finance. It’s a great place to do business.

Business after Brexit

“Nobody knows how far or in what direction it (business) will change.

“The good news for entrepreneurs with Brexit is that Britain can become more nimble. We can change our rules on driverless car testing and all sorts of things.

“The bad news would be on migration. The degree to which Brexit represented a vote against easy come and go policies. If businesses are trying to get together a group of international staff, that might be a problem.

Read more: UK SMEs planning to increase European exports despite Brexit

“And then, of course, we all know in business psychology is important. There’s a feeling among some Europeans that ‘we’re not welcome’. It’s a sort of visceral thing ahead of a rational thing.

“But we’re all agog to see what Brexit actually means!

“What has happened is we’ve encountered quite a lot of difficult problems, including the Irish border problem.

“Britain voted to be more of a nation and set its own rights to set its own product regulations and tariffs and taxes and no border, but then at the same time, we’ve decided we absolutely don’t want a border (in Ireland).

“We’re not much closer to solving the conundrum.

“The British government view and Brexiteer argument was let’s do it (go out and secure trade deals).“

Davis then concluded by noting that, no matter how much lamb and vino could be traded between New Zealand and the UK, it wouldn’t account for the potential lost trade with the EU.

“For some reason, you seem to do a lot more trade with those close to you…”

Listen to the full interview below.