New data has shown that 66% of the UK public supports free trade deals, with just 3% opposing them.
That’s the findings of the Department for International Trade’s first ‘public attitudes to trade’ tracker, a survey of 2,400 people across the UK that aims to calculate people’s changing attitudes to trade over time.
Giving reasons why they supported free trade, respondents most often cited cheaper goods, greater choice and improved opportunities.
Those who had greater knowledge and experience of international trade reported the highest favourability towards free trade agreements.
“This national survey shows overwhelming public support for free trade agreements, which puts us in a strong position as we leave the European Union,” commented International Trade Secretary, Liam Fox.
The UK government is currently working on a host of new free trade agreements in the run-up to Brexit, and with a no-deal exit from the European Union seemingly becoming a real possibility, new trade deals with the US, Australia and New Zealand could be crucial for British businesses to remain competitive on the international stage whilst also opening the door to new opportunities.
Public sentiment towards trade agreements is also mirrored in the British businesses community with a number of high-profile firms publicising the potentially devastating impact a no-deal exit from the European could have, including the car manufacturing industry which warns of a £50,000-a-minute hard-Brexit bill should a trade deal not be reached.
And with the UK economy having missed out on up to £550m a week since the EU referendum according to some calculations and three in four manufacturers reporting Brexit has damaged their strategy planning and prospects, businesses and the general public alike will be pushing for a favourable agreement and outcome to Brexit negotiations as 31st October looms large.
The performance of UK exports and goods over the last twelve months has continued to rise, reaching a new record high despite a challenging global trade environment and impending departure from the European Union.
In the 12 months to May 2019, overall exports increased by 4% to £647.1 billion with goods exports alone increasing by 4.7% to £357.1 billion, supported by an ever-increasing demand for British food and drink products abroad.
Total service trade surplus grew to £107.3 billion following a 3.3% rise, whilst in goods exports, the fuels sector contributed the most significant sector growth at nearly 26% to £39.3 billion.
These are the latest figures released from the Department of International Trade which this month celebrated its third anniversary to a 38th consecutive month of export growth on a year-to-year comparative basis.
International Trade Secretary, Liam Fox commented on the latest data that: “Despite the global headwinds getting stronger, today’s record-breaking statistics highlight what a real international trade policy can deliver for the UK as people from around the world continue to express their appetite for British goods and services.”
Read more: Scottish food & drink exports rise to record £1.4 billion
Continued export success for the UK comes at a time when weaker global growth, political uncertainty and of course Brexit have all held the potential to seriously weaken UK firm’s abilities to continue growing international sales.
Earlier this month, the World Bank announced in its Global Economic Prospects report that global economic growth is forecast to slow to 2.6%, below expectations, with no significant growth expected in 2020 either.
Citing restrained investment in emerging and developing economies, as well as weaker exports and investment within the EU, World Bank Group President, David Malpass commented that: “Current economic momentum remains weak, while heightened debt levels and subdued investment growth in developing economies are holding countries back from achieving their potential.”
“It’s urgent that countries make significant structural reforms that improve the business climate and attract investment. They also need to make debt management and transparency a high priority so that new debt adds to growth and investment.”
The report forecasts regional growth within Europe and Central Asia to steady at 2.7%, an increase on a sluggish 1.6% this year.
After two decades of negotiation and amid a growingly protectionist political backdrop, the EU and South American member states of the Mercosur economic bloc have signed a trade deal that by some metrics is the largest ever agreed.
The deal, which will see tariffs cut or removed on goods and services between both countries, will deliver cheaper imported products for consumers and boost export opportunities & profitability for businesses within the two zones.
The market that will be created as a result of the deal will cover 800 million people – the largest trade deal ever signed in terms of population.
The new agreement comes a matter of months after another of the world’s largest trade deals was agreed, between the EU and Japan, which covers a third of global GDP and 635 million people.
The EU agreement with the Mercosur bloc, which includes Argentina, Brazil, Paraguay and Uruguay, will create a new business and export haven where firms can seamlessly trade, consumers can access cheaper products and economic growth can flourish, at a time where the US and China are locked in a tariff war.
Since 2016, the EU has also penned agreements with Canada and Mexico with the pace of discussion ramping up since Donald Trump’s arrival as US President.
EU trade commissioner Cecilia Malmstrom said of the deal: “They have been long negotiations – tough, difficult, and at least I have said many times ‘we are almost there’.
“Now we are. This is a landmark agreement.”
Where do recent EU trade agreements leave the UK?
The answer depends on the type of exit that the UK can agree amongst itself, and then ratify with the EU member states.
A no deal exit would essentially lose the UK and its businesses free trading access to the EU, Japan and now also the Mercosur trading blocks.
And lack of access also results in a lack of competitiveness. South America affords some of the hottest growth markets for businesses worldwide, but EU companies will be more competitive sitting inside a trade zone than the UK sat outside looking in. Companies and organisations within the Mercosur block will also invest more readily in EU countries, including setting up of new factories, distribution centres and offices.
Read more: UK carmakers warn of £50k a minute hard-Brexit bill as Germany reiterates desire for agreement
Indications of business intent are already in action, too, with both Nissan and Honda announcing plant closure and production cuts in the UK and moves back to Japan – which now has tariff-free access to the critical EU car market.
And the EU – Mercosur deal also highlights just how much time it takes to negotiate, agree and ratify such large scale trade agreements, the golden goose flaunted as the great opportunity for UK businesses once the EU departure has been finalised.
The value of goods exports has increased once again across all four regions of the UK as demand for British products continues to grow overseas.
Through the 2018/19 financial year, Scotland recorded the highest growth, whilst Wales and Northern Ireland also returned strong international trade increases. England continues to deliver the highest trade value with nearly £252 billion in export sales from goods.
- England | +3% to £251.9bn
- Scotland | +12.9% to £32.8bn
- Wales | +7.5% to £17.7bn
- Northern Ireland | +4.4% to £9bn
The number of exporting companies also grew by over 5,000 to 110,831 in the first quarter of the year compared to Q1 2018 – a new record.
International Trade Secretary Liam Fox commented on the latest HMRC figures that: “Whether it is an exporter in rural Derbyshire or the Scottish Highlands, people and businesses across the world want to get their hands on British goods at unprecedented levels.
“The data released today pays homage to the hard work of people working in British businesses up and down the United Kingdom, who are now exporting their goods on unprecedented scales.
“I am delighted that exports continue to grow in every part of the UK, this shows we are working for every corner of our country and are not led by one region alone.”
Continued demands and goods sales from British companies overseas defeats some predictions that foresaw an international sales slowdown from UK firms following the EU referendum result.
Yet, with the latest Brexit deadline of 31st October approaching, and the next two candidates to become the next Prime Minister openly backing a no deal exit should no agreement be reached for the UK’s departure, demand for British goods and the number of exporting local companies has never been higher.
Read more: Scottish food & drink exports rise to record £1.4bn
However, many companies have invested millions of potential growth investment into preparing for a no deal Brexit already in goods stockpiling and in some instances, upping sticks to create new bases on the continent.
To continue export success it’s critical that all businesses that trade with the EU or rely on stock and components from within the single market are ready for whatever Brexit outcome on what seems to be an increasingly more certain 31st October deadline.
If your firm has only recently begun exporting or are yet to begin or finale Brexit strategy, see how Go Exporting can help audit your Brexit readiness here.
International sales of Scottish food and drink have surged to a record-breaking £1.4 billion in Q1 2019.
A healthy increase of 14% since last year, latest figures highlight strong demand in particular for Scottish salmon and, of course, whisky, which accounted for three-quarters of all export sales last year.
On the latest figures, Food Minister David Rutley commented that: “British food and drink is highly sought after around the world, with Scottish whisky, salmon and gin playing a vital role in this exporting success.
“More people worldwide are placing a greater importance on the quality and provenance of food and drink, and Scottish farmers and food producers are in an excellent position to benefit from this.”
Read more: Trade deficit reaches record quarterly high as British firms stockpile goods
And International Trade Secretary Liam Fox noted that: “It’s no secret that Scotland is renowned for its high-quality food and drink, and there is even greater demand out there.
“Recent HMRC statistics showed that goods exports from Scotland grew faster than any other part of the UK in the last financial year, now worth £32.8 billion.”
Car production in the U.K. has been cut almost in half as manufacturers induce an early summer slowdown.
According to the Society of Motor Manufacturers and Traders (SMMT), factories produced nearly 45% fewer vehicles in April compared to a year previously with just 71,000 cars rolling off production lines – 60,000 fewer than April 2018.
And production slowdown also occurred for overseas markets where there was a 44.7% rollback.
According to the SMMT, car firms have brought forward usual summer stoppages in a process including stockpiling of components, training and customs procedures that had been prepared for a 29th March Brexit.
Chief executive at SMMT, Mike Hawes said of the data that: “Today’s figures are evidence of the vast cost and upheaval Brexit uncertainty has already wrought on UK automotive manufacturing businesses and workers.
“Prolonged instability has done untold damage, with the fear of ‘no deal’ holding back progress, causing investment to stall, jobs to be lost and undermining our global reputation.”
The UK car industry is very much in recession with 11 consecutive months of output slowdown, but that forms only a small part of a larger industry picture by which global growth in car sales has seen significant challenges, brought on in part by the trade tensions between the US and China, as well as the growing electric car market spearheaded by the likes of Tesla and also tougher environmental controls.
Read more: Trade deficit reaches record quarterly high as British firms stockpile goods
“This is why ‘no deal’ must be taken off the table immediately and permanently, so industry can get back to the business of delivering for the economy and keeping the UK at the forefront of the global technology race,” Mr Hawes concluded.
The trade deficit remains far higher than forecast by City economists as British businesses continue to stockpile critical goods and components ahead of a delayed Brexit.
The deficit in Q1 this year hit £18.3bn, a record high for any three month period and nearly double the £9.4bn disparity seen in the final quarter of last year.
However, there are indications that businesses are slowing their inventory intake as the value gap between imports and exports narrowed to £5.4bn in March from £6.2bn in February, with continued narrowing expected before the end of October as businesses batton down the hatches.
We could still, however, see a flurry of late purchasing and stocking of raw materials in the run-up to the new Brexit deadline should a no-deal exit from the European Union look more likely than not.
Businesses have actually been more active of late, utilising the slight break to the imminent danger of a no-deal Brexit in much the same way as the housing market, with private-sector business activity rebounding in April with the services sector, in particular, returning to growth.
Read more: Brexit delayed again, but your preparations must go on
But for exporting firms, the value of the pound has added a further complication this month as values against the dollar and euro fell following the announcement that Theresa May will step down as Prime Minister and leader of the Conservative Party.
Data from the ONS has revealed that the 5 fastest growing export markets for UK businesses are in Asia.
Figures released last month highlighted 40.8% growth in Taiwan, followed by 19.3% export growth in India.
Other emerging markets seeing significantly higher growth than the average of 2.7% for UK firms include Nigeria (up 18.3%), Thailand (up 17.8%) and Kuwait (14.1%).
The figures are a positive sign for UK businesses with HSBC predicting that 70% of future world growth will come from emerging economies, for which the UK has seemingly stolen a march.
Further research by the United Nations Conference on Trade and Development shows that by next year, Asian economies will be bigger than the rest of the world combined for the first time since the 19th century with Asia’s share of GDP expected t reach 35% by 2030.
International trade secretary, Liam Fox said of the news that: “Today’s figures show the rapidly growing demand for British produce in some of the world’s fastest growing markets.
“By 2030, Asia will represent 66% of the global middle-class and 59% of consumption, highlighting the need for British businesses to be reaching out to these markets now.
Read more: International demand for British gin & whisky delivers record export drinks sales
“With this in mind, we need to start thinking about markets which will dominate the centre of the world stage in years to come and to make sure we are operating there with success.
“I encourage businesses across the UK to be encouraged by today’s figures, as my international economic department stands ready to help connect businesses to emerging markets across the world.”
For exporting businesses in the UK, looking beyond the EU to find export partners in emerging economies such as across Asia represents a great opportunity to grow sales.
For advice on where to start and researching which territories could offer profitable export growth for your business, read more about our international trade consultancy.
HMRC has extended the deadline of its customs training fund until 31st May 2019 to help businesses prepare for Brexit.
The £8m fund, which was announced in October last year, is designed to help businesses prepare for a no-deal scenario and includes funding to train intermediaries and traders completing customs declarations, IT improvement funding and the increase in the number of short-term courses available to support customs brokers.
Financial Secretary to the Treasury, Mel Stride MP commented that: “We are doing everything we can to get businesses ready for the UK leaving the EU, however, businesses also need to take action themselves to prepare.
“There is help available – we have provided funding to support businesses with customs processes, and we are now extending the deadline to 31 May 2019 giving more time for applications.
“We have already received over 300 applications, and I’d urge businesses to apply as soon as possible to avoid missing out.”
Read more: UK economy has missed out on £550m a week since EU referendum
The two grants which can be applied for, the training and IT improvements grants, are applicable to businesses who complete customs declarations and import/export into the EU, whilst firms with fewer than 250 employees, an annual turnover of less than €50m and who complete customs declarations on behalf of EU-trading firms can apply for the latter.
If your businesses could benefit, you can read more about applying for the grants on the Government website here.
Export sales of British beverages reached a new high in February, with demand for Scotch whisky and British gin proving particularly popular with international palates.
In total, international sales hit £8.3bn, up 7% on February 2018, marking a doubling of demand in the last 15 years and providing a surpless of £1.6bn.
Total service and product export sales also grew by 3.1% on a year-to-year basis, reaching £639.9bn.
And with Brexit just around the corner, even if that corner is now slightly further away than it was one month ago, EU exports for the beverage category are far dwarfed by the demand in non-EU countries which account for over 63% of exports, including massive demand increases in India and Japan where export sales grew 49% to £179m and almost 24% to £188m respetively.
The US remains the biggest fans of British drinks though, sipping up £1.8bn of local product.
International director of the Scotch Whisky Association, Sarah Dickson commented on the results that: “Scotch whisky continues to blaze a trail for UK exports, making up more than half of all UK beverage exports.
“Last year, 41 bottles of Scotch whisky were shipped from Scotland every second to around 180 global markets, with an export value of £4.7bn. We should be proud that Scotland’s national drink is the world’s premier whisky, enjoyed by millions around the globe.”
Read more: UK economy has missed out on £55m a week since EU referendum
“Consumers in key global markets are looking for products with a strong story, and with Scotch whisky they can discover a spirit with an unrivalled reputation for quality, authenticity and provenance.”
And the results are a big win on the political front for the Department of International Trade, with Liam Fox commending the growing demand for British exports in a challenging global economic environment.
