Trading Up

Following the UK’s departure from the EU, the country stands at a critical juncture in which it must decide the role it will play in global trade. In this report Nick King, Managing Director at Henham, argues that the UK should focus on two key objectives: championing free trade and supporting UK SMEs to export.

The report emphasises the need for the UK to position itself as a leading voice for free trade and the WTO. This includes pressing for the further liberalisation of services exports, with no global agreement on the issue since the 1995 General Agreement on Trade in Services. This is not just within the UK’s commercial interest (services account for 80% of the UK’s GDP) but is also important for the wider global economy as new technologies blur the line between product and services. Additionally, the report calls for the UK to be more accepting of other countries’ standards, focusing on mutual recognition rather than enforced harmonisation. This approach could help permit more cross-border trade and could ease the ever-present tensions about the Northern Ireland border.

The twin shocks of Brexit and Covid-19 means there is an urgent need to address the decline in exports from small and medium-sized enterprises. The report proposes the Government simplify export support from Government, adopt a more team-based approach to support, and to make much greater use of the private sector. The Government should also introduce a new Export Tax Credit, modelled on R&D credits, which would provide a powerful economic incentive to those considering exporting.