The international landscape for business has never held so many challenges nor so much opportunity. From lingering impacts of the COVID pandemic to protectionist political rhetoric, global supply chains have been facing strong headwinds. The solution lies in the problem – through increased trade, facilitated by strongly negotiated Free Trade Agreements (FTAs), industry can build resiliency without sacrificing access to broader markets.
International trade is a key component of sustainable economic growth, supporting productivity in the UK. However, the most recent CBI forecast has raised concerns over the continued underperformance of UK exports in both goods and services. Our forecast expects exports to continue to underperform compared with our international peers, remaining 10% below their pre-COVID level at the end of 2023. There is clear room for growth.
The UK has been increasingly ambitious in negotiating for FTAs to ease trading for British businesses, as well as removing market access barriers. With UK-New Zealand and UK-Australia agreed and awaiting ratification, as well as UK-India under negotiation, these agreements offer lowered, or removed, tariffs and alignment on remedies.
This is especially relevant as we see domestic cost pressures increasing. Small and Medium Enterprises (SMEs) are particularly vulnerable to domestic cost increases as well as an integral component of regional economics. By taking advantage of FTAs, and increasing exports in general, industry helps to create and sustain thriving regions and nations here in the UK.
We know that companies who trade internationally become more productive, more innovative and diversify their risk profile – which offers critical resiliency against supply chain issues when they arise. Just-in-time logistics may have made sense once, but the operating landscape today is very different, and industry needs to look further afield to deliver wins back at home.