Recent reports of the UK’s continuing loss of trade due to post-Brexit trade agreements have only been further compounded by the Department for International Trade (DIT) recently announcing a new campaign to get British business exporting their goods to foreign markets. As far as international trade is concern, the UK seems to be in a sort of limbo at the moment.
The UK is purported to have lost an estimated £2.2bn in food and drink exports to the EU since 2019. As part of this, around £0.5bn was lost to Ireland alone, and sales to Germany, Italy, and Spain were all at half the level they were in the first half of 2019.
Sales outside of the EU rose by 13%, accounting for nearly half of the UK’s export market in the first half of 2021. And this is a trend that Mike Freer, minister for exports, hopes to see continue. The DIT’s newly devised slogan – ‘Made in the UK, Sold to the World’ – will perpetuate this ethos the department’s upcoming workshops and investment hubs.
International Trade Secretary, Anne-Marie Trevelyan, was quick to sell the idea of a prosperous UK export market:
“My department has a clear message to any business thinking about exporting for the first time – there has never been a better time to export”
More than 6.5m UK jobs are tied to exporting companies, typically with higher salaries than domestic sellers. The Government’s new initiative will see an increased emphasis put on encouraging smaller companies to export internationally – which currently only one in 10 businesses do.
The UK’s non-EU trade has shown relatively promising growth, with the Chinese, Singaporean, Australian, Japanese markets almost returning to pre-Pandemic levels.
But will this increase in non-EU trade plug the gaping maw left open by Brexit? It’s hard to say.
Tighter trade restrictions with the EU – coupled with their associated costs – have meant that both sides of trade have felt the repercussions. While the UK lost out on over £2bn worth of exports, it also important 10% less food and drink from the EU in return. In fact, imports from the EU have fallen nearly 15% since 2019, totalling losses of around £2.4bn – a trend that is expected to continue into 2022. Interestingly, this makes the loss of food and drinks trade on both sides – UK and EU – eerily similar.
John Whitehead, director of the Food & Drink Exporters Association (FDEA) had the following to say on the situation:
“It is pleasing to see growth in sales to non-EU countries. However, this in no way replaces the loss of £2.2bn in sales to the EU since 2019. There is growing evidence that the complexity of trading with the EU has led to businesses moving operations into Europe and of importers looking for alternative suppliers, contributing to the ongoing decline in both UK exports and UK jobs”
The UK’s trade situation can be seen through two lenses: the optimistic rose-tinted specs of opportunity, or the grimy periscope of the unknown.
On the one hand, the UK could emerge from Covid and Brexit born anew, with fresh trade partners and opportunities. On the other, it could lose out on opportunities due to its new stance as the lone wolf of Europe.
One thing is for sure – if you’re a UK business looking to export to non-EU countries, the government will be there to offer support in securing your new ventures. Britain’s uncertain future is there for the taking, and innovative companies will surely move to exploit its new positioning on the global stage.