New data has shown how the value of UK exports globally have risen since Brexit.
Figures from The Office for National Statistics detailed how exports to the EU rose 7.9% in July this year, worth £1.3 billion. Exports to non-EU countries also grew by 5.4% and £800 million.
Despite difficulties for UK exporters trading with the EU following Brexit, growth was seen this summer thanks to higher demand and increased exports of fuel, machinery and transport equipment.
The UK’s GDP also saw a small uplift of 0.2% during that time, despite an increasingly difficult economic situation for both the UK and EU nations as the recovery from Covid was halted by Russia’s invasion of Ukraine.
Business Brexit wounds still evident
Despite strong trade growth this summer, the picture for UK businesses has been difficult since the UK’s departure from the European Union and, in particular, the Single Market.
Since the departure, 33% of UK exporters have ceased export activity with the EU bloc with most blaming a new raft of red tape and increased costs of doing business.
If your business is struggling in the post-Brexit trading environment, then here at Go Exporting, we can help.
Download our free guide on 7 Key Changes to UK-EU Trade Post-Brexit right here.
Exports of steel heading from Great Britain into Northern Ireland could soon face huge tariffs after the EU changed steel quota rules.
Enacted due to the war in Ukraine and relating to the Northern Ireland protocol, new tariffs on certain steel products could hit 25%.
Industry group, UK Steel, has already appealed to the government to suspend tariffs immediately, saying it’s ‘farcical that UK producers are now prevented by these tariffs from selling goods to customers in their own country’.
Steel exports from GB into Northern Ireland had been tariff-free thanks to the tariff rate quota covering UK exports into the EU.
The TRQ rules mean that certain products can be moved from country to country without tariffs being paid, so long as they don’t breach a quota mark.
But the EU updated these rules in light of Russia’s invasion of Ukraine, intended to give EU steel importers more flexibility in the absence of trading with Russia – resulting in quotas of GB supplies into NI hitting the limit faster than usual.
Steel industry specialist Sam Lowe told the BBC that: “Whereas before the UK had access to its own country-specific quota, which it could rely on to accommodate steel moving from Great Britain to Northern Ireland, now these movements would be covered by the ‘other countries’ quota which could fill up much more quickly, given the entire world has access to it.
“Once it is full: 25% tariff on steel moving from Great Britain to Northern Ireland.”
The UK government has so far commented to say this is an example of the Northern Ireland Protocol ‘needlessly damaging trade within the UK’.
The UK is set to cut import taxes on hundreds of products from developing nations to help boost trade.
Covering 65 developing countries, products including clothing and shoes could benefit from zero or lower tariffs in a move that has been created by The Developing Countries Trading Scheme.
The scheme, which builds on similar programs the UK was part of whilst a member of the EU, builds on a list of thousands of products that developing nations can already export into the UK, including 99% of goods imported from Africa.
The government hopes the scheme will promote trading diversity and support developing nations to drive prosperity and help eradicate poverty. It will also support retailers in the UK to bring off-season products from abroad and onto shelves, such as cucumbers, without having to increase prices.
International trade secretary, Anne-Marie Trevelyan, said that: “As an independent trading nation, we are taking back control of our trade policy and making decisions that back UK businesses, help with the cost of living, and support the economies of developing countries around the world.”
She continued: “UK businesses can look forward to less red tape and lower costs, incentivising firms to import goods from developing countries.”
New data from the Office of National Statistics has found that the UK’s trade deficit has increased at a record rate.
The latest figures from the ONS show a fall in the value of imported and exported goods, creating a quarterly trade deficit of £27.9bn – up £2bn on the previous period.
This marks the biggest jump in the gap between the value of exports and imports since 1997, with soaring energy costs, inflation and Russia’s invasion of Ukraine all contributing to an increasingly difficult trading environment.
In detail, imports increased by £14.3bn, with exports also rising but more slowly to £12.3bn, leaving a total trade deficit against the UK’s GDPR of 4.5%.
More positive however was the UK’s trading relationship with the EU, with the value of goods moving back into the European Union rising 16.3% thanks in part to the re-exportation of fuel, ships, aircraft and mechanical machinery.
Exports to the rest of the world also rose by just under 9%.
This leaves a confusing picture as to how the UK economy is performing on the international stage, and just how able businesses have been to mitigate not only Brexit, but also recover from the pandemic and now mitigate inflation, war-related supply disruptions and surging fuel costs.
Director general of the IOE&IT, Marco Forgione cautioned that: “Although superficially the ONS figures look positive, the IOE&IT Monthly Exporter Monitor shows that fewer companies are exporting and fewer goods are being exported.
“This indicates there is significant inflationary pressure building in the economy.”
HMRC has warned UK firms yet to begin using the new Customs Declaration System that they may soon be unable to import products into the country.
Over 3,500 firms risk significant delays if they don’t move to the new service within the next two months and are being warned that registration and adoption aren’t instantaneous either.
HMRC’s director of programme and operational delivery for borders and trade, Julie Etheridge, noted, “There are now only two months left until businesses must use CDS for imports. Businesses need to move now or risk being unable to bring their goods into the UK.
“Registering takes time so businesses should start moving to the Customs Declaration Service to ensure a smooth transition and avoid disruption to their business.”
The new Customs Declaration System, brought in following the UK’s departure from the EU, includes a number of significant changes for importing businesses, including;
- New data element fields with specific formats
- New dashboards to monitor and manage declarations
- A two-part customs procedure code, with a four-digit code combined with one of up to 99 three-digit additional procedure codes (APCs)
- Requirement for more detailed customs information
Vicky Payne of the IOT&IT additionally commented that: “With the new changes coming into place, I would highly recommend that firms properly understand all the elements of a customs declaration in addition to having access to the relevant platforms and other preparations for CDS.
“It is evident that traders will need to make several changes to adjust to the new system and the IOE&IT has products to support your learning.”
Businesses requiring more information can do so on the government’s website here.
If your firm lacks the time or internal expertise and resources to manage the shift, then Go Exporting can help. Our Customs & Compliance Reports cover all aspects of your trade with a specific country or trade bloc, including the EU.
The result will provide you with a complete picture of the rules as they apply to your business and recommend the best processes and procedures for you to follow to meet both legal requirements and the goal of ‘least hassle’ for you and your customers.
The UK and the Gulf Cooperation Council have kicked off the first round of trade talks in Riyadh in a deal that could cover more than £33bn in annual trade.
The GCC, which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE, would be equivalent to the UK’s seventh-largest export market, with demand for international products and services in the region expected to rise to £800bn by 2035.
The deal itself is expected to be worth around £1.6bn a year to the UK economy.
These latest talks follow similar discussions with Canada and Mexico earlier this year.
UK international trade secretary, Anne-Marie Trevelyan, commented on the kick-off of trade negotiations that: “Today marks the next significant milestone in our 5-star year of trade as we step up the UK’s close relationship with the Gulf.
“Our current trading relationship was worth £33.1 billion in the last year alone. From our fantastic British food and drink to our outstanding financial services, I’m excited to open up new markets for UK businesses large and small, and supporting the more than ten thousand SMEs already exporting to the region.
“This trade deal has the potential to support jobs from Dover to Doha, growing our economy at home, building vital green industries and supplying innovative services to the Gulf.”
Key winners from any trade deal would include British farmers and producers, whilst tariffs on items such as chocolate, baking products, biscuits and smoked salmon could all be cut.
A trade agreement would also open up the door to more inward investment from the Gulf into the UK, with investments from the region already supporting around 25,000 jobs in the UK alone.
The government has promised a ‘bonfire’ of the current barriers to international trade for exporting business in the UK.
International trade secretary, Anne-Marie Trevelyan made the announcement as part of a new drive to reduce red tape and barriers to exports around the world – estimated to be worth £20bn in economic benefit for British firms.
There are 100 priority issues that have been identified by the Department for International Trade, including regulations on meat exports to Asia, rules delaying British medical devices entering South Africa, and restrictions on UK lawyers operating in Japan.
The move is part of ongoing post-Brexit work to strengthen or create new trading routes for UK businesses outside of the EU.
Trevelyan said in a statement that: “Every week we remove trade barriers somewhere around the world, helping more and more businesses all over the country.
“We know that businesses who export pay higher wages and are more productive than businesses who do not, but too often, complex trade rules and practical obstacles prevent them selling overseas.
“This bonfire of the barriers will grow our economy by allowing our brilliant businesses to satisfy the enormous global appetite for their goods and services.”
Whilst Brexit has caused major upheaval for the majority of import/export businesses in the UK, leaving the European Union has allowed the UK government to pursue independent trade agreements around the world, as well as addressing specific blockers on British trade.
These include opening the Chinese market for UK lamb for the first time, worth £1.5bn a year, as well as beef in South Korea which within the next five years is hoped will open a market worth £2.5bn to British producers.
So far, the DiT has identified and resolved around 400 trade barriers in the last two years, including barriers for individual businesses, including VetPlus where overcoming bureaucratic issues enabled the Lancashire-based firm to export pet supplements to India in a move worth £1.4m.
VetPlus EMEA regional manager, Anthony Stewart, commented that: “Being able to meet the different compliance requirements across the markets we operate in is extremely important to ensure the availability of our products for vets and pet owners.
“Recently, we ran into a challenge in exporting our products to India and the support from the DIT was fantastic. They were able to put us in touch with the right people to help us liaise with the Indian authorities and facilitate the appropriate documentation to enable us to re-start the export of our products to India.”
Exports of food and drink products by UK exporters have risen above pre-pandemic levels.
Data from the Food and Drink Federation found that exports to non-EU countries rose 16.2% in the first three months of the year, almost 11% higher than in Q1 2019.
Total non-EU exports of food and drink are now worth a record £2.3bn, with sales to Australia, Canada, India, Japan and the US showing the most growth. Beef exports rose 80%, with whiskey, chocolate and gin also seeing sustained growth.
Whilst food and drink exports to the EU still remain higher at £3bn, the rise in sales further afield may be a sign that UK firms are starting to broaden their horizons in the wake of Brexit.
The FDF predicts that further growth is on the cards, with the UK-Japan trade agreement already signed and new deals with Australia and New Zealand on the cards.
Association director of the FDF, Nicola Thomas, noted that: “Such strong growth highlights how with widespread economic and political instability around the world, a renewed focus on exporting is a crucial risk-mitigation strategy for UK Food and Drink companies in 2022.”
EU still a major market
Despite Brexit, the EU trading bloc remains a core and critical market for many exporting firms, and the pandemic, war in Ukraine and the UK’s departure from the European Union have caused massive upheaval for import/export businesses.
We’ve created a free checklist you can download to help navigate the choppy post-Brexit waters – ideal if your organisation has limited experience with customs declarations, licenses, VAT on imports or rules of origin.
The UK is close to signing mini trade deals with six individual US states.
Speaking in an interview with Bloomberg, UK trade secretary Anne-Marie Trevelyan revealed the likely deals were memorandums of understanding covering areas including mutual recognition of professional qualifications and improved access to procurement contracts.
Some of the states in question include Indiana and Texas, with the former being an important potential partner for the UK as it’s one of the largest US exporters of maize, soya beans and tomatoes. Other states that the UK has been in talks with include California, Georgia, Tennessee, Oklahoma and South Carolina.
Trevelyan said in her interview that: “The US big-picture deal is important and we’ll get there when the White House has the view that they have got their domestic situation [under control], and they want to look out again.
She added: “In the meantime, there’s loads that businesses would like us to try and sort out in terms of market access barriers.
“State-by-state we are doing all sorts. “We’ve got some really good discussions going on. Watch this space.”
The ‘domestic situation’ Trevelyan refers to is in the main the Northern Ireland protocol for which President Biden has been outspoken. Increased efforts have been seen over the last couple of weeks to find a resolution, and those on the US side of politics believe trade issues relating to the protocol can be fixed, with US congressman Richard Neal commenting: “I have on this delegation people who are experts at trade and they also would confirm that they think these issues on the trade front, if that’s really the dispute, could be ironed out quickly.”
With the latest set of data showing the UK’s trade deficit has widened in March, experts are warning that local exporters shouldn’t be taken for granted as international trade networks come under strain.
The number of exporting firms in the UK dropped by 3% in March, with the number of employees working in export-related jobs also falling by 5.5%.
Total export revenues also fell by almost 4%, with Wales seeing the biggest decline.
The big-picture data isn’t too much better either with the UK’s trade deficit rising by almost £15bn to £25.2bn in Q1 2022 with imports rising 10%.
However, HMRC has urged caution on analysing the data and applying it to the business world as it has recently changed its methodology for collecting trade data. It’s also worth taking into consideration that this data set is the first since UK sanctions on Russia began in late February and March.
Commenting on the latest results, director-general of the Institute of Export & International Trade, Marco Forgione, noted: “The message is simple, don’t take UK exporters for granted. They rely on their international networks for their trade – and those networks are under severe strain.”
Read more: UK SMEs seeing core EU markets vanish
He continued: “While the supply chain crisis continues, the Russian invasion of Ukraine adds uncertainty to an already complex trading picture. Relationships are fragile and UK exporters need help, support and guidance to get them through these difficult times.
“We reiterate our commitment to supporting businesses of all sizes through these turbulent times. Education is an essential tool to ensure UK exporters have the expertise to trade effectively, sustainability and competitively.”