Small businesses in the UK are diverting exports away from the EU, according to a report into international sales trends ahead of a pivotal moment in the Brexit negotiations.
Research from Aston University shows SMEs have moved over £10bn a year in exports to non-EU markets since the referendum on UK membership of the EU in 2016.
The smallest companies polled – described as “micro exporters” – have been especially quick to move their trade, with 46% switching export growth to non-EU markets.
Reported in the Guardian, the study analysed 340,000 export transactions from 26,000 UK firms over a five-year period.
Speaking to the Guardian, Jun Du, professor of economics at Aston Business School, said:
“This evidence suggests that UK exporters are jumping before they’re pushed – finding alternative markets worldwide for their products even before we know the outcome of the current UK-EU trade negotiations and any potential new barriers.”
Aston University are not alone in reporting that UK firms are expanding further and wider around the world, with the COVID-19 pandemic also a cause for a change of strategy.
A study of 900 business leaders from One World Express, reported in Global Trade Review, found 57% of businesses are looking at new export opportunities, with 45% saying the pandemic has made them realise they were overly reliant on one particular market for revenue.
Quarterly figures from the Food and Drink Federation last week also showed industry sales growth in Singapore, Canada and Norway of over 10%, while there was a 4.5% year-on-year increase of branded exports to non-EU countries for Q1 2020.
The UK and EU are commencing the fourth round of negotiations for the future trading relationship today (Monday, 1 June) with a decision regarding any extension to the transition due by 30 June.
The two sides remain someway apart in the talks, with EU chief negotiator Michel Barnier calling on Prime Minister Boris Johnson to “remember” what was agreed to in the political declaration in the Withdrawal Agreement signed last year.
He said: "We remember very clearly the text which we negotiated with Boris Johnson and we just want to see that complied with.”
Politico report that, despite refusing an extension to the transition, the UK is unlikely to ‘ditch talks’ to focus on preparing for a no deal, as previously rumoured.
The government instead intends to continue negotiating with the EU for a deal throughout the summer.