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finance

How Britain can be an export champion


It is a strange time for trade policy experts. Would anyone a few years ago have predicted that in 2018 Britain would be passionately debating the intricacies of non-tariff barriers, tariff rate quotas or free trade agreements?

That is no bad thing, but there is a danger that we forget the other vital aspects of trade. Yes, the founding of the World Trade Organization was a milestone in world trade, but so too was the first container ship for goods, or long-distance telecommunications for services.

If you ask small businesses why they have not started exporting, they rarely talk about tariffs or regulations. They say they cannot get the finance, or they are not familiar enough with foreign markets, or they do not have the right connections in country.

There is no doubt that since the UK’s decision to leave the EU, trade policy has taken centre stage. There is a parallel here with productivity. As frequently pointed out by the British Chambers of Commerce and others, in the long term the impact of our domestic productivity will dwarf that of Brexit on the real economy. Brexit may have taken the headlines, but we cannot afford to ignore things like education, infrastructure, business environment and regulation.

Similarly, we cannot ignore the export opportunity. Research shows that companies that export have higher profitability, employ more people and are more sustainable. Whatever Brexit outcome is achieved, our export performance will remain fundamentally important to this country.

Last November, the UK government published an industrial strategy to address the productivity challenge. And today international trade secretary Liam Fox and I are launching an export strategy. The aim is simple: to increase exports as a proportion of gross domestic product from 30 per cent to 35 per cent, taking us from the middle of the G7 to near the top. This is ambitious, but achievable.

The UK is, after all, already great at exporting: it is the world’s sixth-largest overall exporter and its second-largest services exporter. It punches above its weight, but also below its potential.

This new export strategy is designed to change that. We have built it around four roles: providing trade finance, export finance and insurance; connecting businesses to local opportunities and fixing market access barriers; encouraging small businesses to start exporting or enter new markets and encouraging others to look to the UK; and providing information and advice on how to export.

It builds on our existing export support services — our network of trade advisers and promoters across the UK and in 108 countries worldwide, UK Export Finance’s £50bn capacity to support exports in 60 currencies and the great.gov.uk digital platform. Also, the Department for International Trade’s “export champion” campaign supports businesses of all shapes and sizes from around the UK to form a peer-to-peer network of companies that are ambassadors for international trade.

We will improve UKEF’s suite of products and look at potential new ones. We will further develop its digital capacity to improve access for exporters and suppliers. In addition, we will run an awareness campaign for the businesses most likely to benefit from UKEF.

We must work in a joined up way across government. For although the primary role of supporting exporters lies with the Department for International Trade, almost every other government department has a critical role to play.

In all of this, our main consideration is to put business first. Ultimately, it is businesses that export, not government. We have been working with businesses of all sectors and sizes to discover what barriers they actually face.

This has meant being humble about what government can do, and concentrating resources where we can make a real difference. The UK has excellent private sector export advice and a deep and sophisticated trade finance industry — we have no intention of crowding out either of them. On the other hand, no one is better than the government at dealing with other governments, whether in troubleshooting market access problems or supporting British companies to win public sector procurement contracts.

If nothing else, we hope this strategy will encourage businesses to start thinking about their own exports. It is noticeable how often the subject of productivity started appearing in the news after the industrial strategy green paper was published. Now is the time for a national conversation about exports too.

The writer is UK minister of state for trade and export promotion at the Department for International Trade. She was chairman and chief executive of the Financial Times Group from 2006 to 2013



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