More than a third of businesses plan on funnelling more resources into exporting to the European market over the next five years, and 18 per cent plan to allocate more resources to sourcing products and services from Europe
Andy jalil –
British businesses will continue to have a strong trading relationship with European customers and suppliers despite the decision to leave the EU, recent research suggests. Of 1,500 business people surveyed, around three quarters currently sell and source goods and services in the EU market, and UK companies will continue to see Europe as a vital trading partner after Brexit, according to the survey by the British Chamber of Commerce (BCC).
More than a third of businesses (36 per cent) plan on funnelling more resources into exporting to the European market over the next five years, and 18 per cent plan to allocate more resources to sourcing products and services from Europe. The survey serves as a reminder that it is businesses that trade not governments, Adam Marshall, Director General of the BCC, said.
“Although the likely outcome of the Brexit negotiations remains unclear, businesses still see Europe as a primary market for both selling and sourcing inputs — even after the UK leaves the EU,” he added. Nearly a third of businesses said they are looking to export more following the EU referendum, and 65 per cent of respondents said the EU referendum hasn’t changed their importing strategy.
While 15 per cent are looking to source more internationally, 13 per cent are going the opposite route due to the depreciated pound making imports more expensive. Marshall said British businesses are looking for the best possible deal in Brexit negotiations. “UK firms want more tariffs, costly non-tariff barriers, and product standards to be at the top of the government’s agenda for a future EU trade deal.”
Meanwhile, creating a trade deal with the EU should be the government’s top priority in Brexit negotiations, a report from think-tank Centre for Cities argues. The report said every UK city including London is “critically dependent on EU markets for exports, and Britain would have to dramatically increase trade with international markets like the US to compensate for a downturn in exports to the EU.
An influential lobby group from London’s financial district (known as ‘the City’) believes Brexit is a “once-in-a-generation opportunity” to boost trade and investment into the UK — despite having previously campaigned for Britain to remain in the European Union. The CityUK says post-Brexit trade agreements could enhance London’s status as a leading financial capital and could also create new growth opportunities for the sector across the UK.
In particular, the lobby group is urging the government to focus its trade policy on fast-growing countries, and encourage foreign direct investment from the Brics nations. The report also says the UK could take a lead role in areas such as data protection and cyber security.
“The UK is the leading exporter of financial services globally, generating a record high trade surplus in 2015 of $97 billion (£77.5 billion), said Gary Campkin, Director of Policy and Strategy at TheCityUK.
“Around 40 per cent of the UK’s trade surplus in financial services is with Europe. However, over the next 10 to 15 years, 90 per cent of global economic growth is expected to be generated outside Europe and these markets — developed and emerging — must be priority focus for the country post-Brexit,” said Campkin.
The report urges the government: “Take this unprecedented opportunity to recalibrate the UK’s trade and investment policy as an effective tool for maximising access to key trading partners at all stages of development.” We recall, in her long-awaited Brexit speech earlier this month, Theresa May promised “a bolder embrace of free trade” after the UK departed from the EU. However, the prime minister also warned EU states unwilling to fall back on WTO rules if needs be, saying: “No deal for Britain is better than a bad deal for Britain.”
Meanwhile, according to German financial watchdog Bafin, top regulators of the country have had meetings with about 50 representatives from foreign banks to explain how they could move business to Germany after Britain leaves the EU. Bafin, which has been approached by numerous banks in recent weeks, said it answered questions from the banks such as how to get a banking licence in Germany. Peter Lutz, a Bafin official in charge of bank oversight, said the authorities wanted to help banks considering a move to understand the rules in Germany.