So now we know…or do we really?
by Tony Goodman MBE
Whilst we do now have the certainty that we are leaving the EU on 31 January 2020, we will then be entering the 11 month limbo of the transition period up to 31 December 2020. Or is it certain? That is what the UK Government are saying, but the EU are making noises saying that it won’t be possible in that timescale. So how sure can we be about what will happen? If you asked most people back in early November 2019 there would have been little consensus on the outcome of the election and by implication the next steps in Brexit. But by 13 December, the world had changed, and Brexit then became inevitable.
So where are we now?
With their strong majority, the Government can be sure of solid parliamentary support for their chosen negotiating stance, but that does not tell us what they will do with it. So, what can we expect from 2020 and beyond and what should UK companies be planning?
It is expected that negotiations will start with the EU on a Free Trade Agreement. It would not be a surprise if by the end of this year we have a series of sectoral agreements rather than a full-blown FTA. There has been much publicity that the USA are ready to start negotiations with us on a FTA; again expectation would be that this is a long road, but both sides will want to announce early wins.
The other major, but lesser known, opportunity is to join the CPTPP (Comprehensive and Progressive Trans Pacific Partnership), which is a high quality free trade agreement with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. That would provide an easy win and a massive opportunity. Similarly, the recent African Investment conference shows an intention to move to closer trade ties with countries from that continent. CPTPP is particularly attractive as it already incorporates a number of the countries we would automatically be expected to be targeting and with this being reasonably fresh, it could be easier than starting from scratch. We wouldn’t be the biggest economy in the group, nor the smallest.
So, what does this mean now for businesses in the UK?
It is worth repeating that we do not need to have Free Trade Agreements in order to trade with other countries. Without a FTA there may be tariffs applicable and the level of these can vary significantly, but the leading export market for UK goods and services, by a long way (more than double the next country), is the USA and there is currently no FTA in place between the EU or UK and the USA.
There is no good reason not to export now.
Exporting is simply selling to a customer in another country. Sometimes that can be difficult, sometimes straightforward. Finding export customers is the same process as finding customers in your home country. Perhaps the biggest difference is how much help is available to help UK companies export. The Department for International Trade is dedicated to increasing export trade and has Trade Advisors across the country who are encouraging and helping companies to export, providing expert advice, leading overseas trade delegations, liaising with industry sector experts, in market advisors, utilising trade envoys based in our embassies overseas. There is even a department that can help provide finance or guarantees to help exporters.
If you are nervous about how to transport your products, there are numerous freight companies with global networks to help and advise you. Put simply, there is an abundance of help available to help businesses to export.
Turning to the other side of the equation, demand.
UK products are well respected and in demand around the world. Our reputation is such that we are respected for quality, innovation and excellence. There are many areas of the world that seek out UK, and European, products.
You are not alone, however there are a growing number of companies that are finding real advantages in exporting, boosting sales and profits and importantly spreading the risk of exposure to any one market. Now is a good time to start, don’t wait till everything is settled, it could be a while yet.
Tony Goodman MBE is a successful exporter and has been doing so through a variety of different businesses. He is currently Marketing Advisor at Forest and Co who specialise in offering guidance on branding, exporting and sales: www.forestandco.com