The UK government is in the process of putting together a supply chain strategy that will be published in the next few months, business and industry minister Nusrat Ghani said yesterday (2 October).
Speaking at a Conservative conference fringe titled “Unleashing British trade: what’s happened to the Global Britain dream?” hosted by The Spectator in association with the Institute of Export and International Trade (IOE&IT), Ghani also claimed the UK was emerging, post-Brexit, as a serious player on the world stage and in international trade.
She highlighted recent statistics showing the UK to be the 8th largest manufacturing nation in the world and argued that the country’s critical minerals strategy had been well received globally. Also taking part in the discussion were:
- Lord Frost, fellow, Policy Exchange
- Marco Forgione, director general, IOE&IT
- Sam Lowe, partner at Flint Global
- Lou Cordwell, chair of the Greater Manchester Business Board
Small business support
There was agreement across the panel that bureaucratic burdens on small businesses are holding back their growth. However, Lord Frost added that the expected short-term “post-Brexit pinch”, following on from leaving the customs union and the single market, has not been as bad as many predicted.
He pointed to the disruptive impacts on supply chains of Covid and the war in Ukraine, and said he felt these needed to be considered when assessing the UK’s trade post-Brexit.
Cordwell agreed that exports are a great way to boost the UK economy and that regulatory burdens can stunt growth. She added that the real issue for many SMEs is not a lack of funding so much as a lack of awareness of available funding. She said small businesses often struggle to identify capital sources and suggested more needed to be done to highlight the available support.
Forgione called for a long-term business growth plan, which should be integrated with a clear import and export strategy, offering greater certainty for businesses.
On the topic of business certainty, he noted that when the government makes decisions that will affect businesses, such as the recent Border Target Operating Model, it is important that goalposts are not constantly moved for businesses, as it undermines that certainty.
Free trade agreements
Forgione also said that global supply chains were changing post-Covid and pointed out that the UK could play a part in helping to reshape and inform how global trade is conducted.
Lowe argued that we don’t really live in a world of open trade and suggested that many barriers exist to hinder free trade. He highlighted the importance of government in helping to open-up trade and added it needed to set controls for international trade. He said that any barriers deter small businesses from going through the bureaucratic, burdensome process of setting up to trade internationally.
On the question of a trade deal with India, Lord Frost said that despite how shallow it could turn out to be, it may be worth signing a deal with India for a definite period of time.
Ghani agreed with the merits of working closely with India, while Lowe said any such deal with India would be the most important of the UK’s post-Brexit trade deals. However, he said the expected lack of detail will likely disappoint many businesses and people.
This was in keeping with many trade deals, Lowe said, pointing out that free trade deals usually amount to a minimal benefit proportionally. He highlighted the 0.08% benefit to the economy from CPTPP. He pointed out that we already had a deal with Japan, for example, prior to CPTPP, so were essentially building on foundations already there. He suggested building on different bilateral relationships the UK already has (and that businesses make use of) as a way of developing trade links.
Asked about a trade deal with the US, Ghani said the UK is now working state-by-state and gave the example of signing a recent memorandum of understanding with Washington State, in areas which the UK have real expertise.
Regarding trade arrangements for food and drink products with the EU, Lord Frost said that he would support a deal on sanitary and phytosanitary goods, as long as UK sovereignty is protected.
Cordwell spoke about the role of “city-to-city” trade deals and raised the importance of place and localisation when thinking about trade.
Regional focus
Pointing to the IOE&IT’s recent Global Horizons report, Forgione advocated the need for regionally-based trade policy.
As chair of the Greater Manchester Business Board, Cordwell talked about some of the challenges being faced in the North West, and agreed with the findings from the Global Horizons report, which concluded that better regional data was essential to help understand the challenges and opportunities.
Digital trade
On the topic of the Electronic Trade Document Act and digital trade in general, Forgione said that if the UK could fully digitise trade documentation this could generate a serious amount of capital equivalent to 1% to GDP.
He noted, however, that mandatory implementation was not possible yet and pointed out the difficulties that smaller businesses would face if the current voluntary arrangement was made mandatory.