Webinar: supporting SMEs impacted by coronavirus

Speakers:

• Deborah Fraser, Regions Director, CBI (Chair)
• John Dickerman, Head of CBI Washington
• Lord Grimstone, Minister of Trade for Investment, Department of International Trade.

Overview:

Lord Grimstone:

• There are nearly six million small businesses in the UK. The view has always been for government to get out of the way of small businesses and let them flourish.
• Covid-19 has been the most extraordinary time in my lifetime. Nations have thrown money at this problem, with the UK looking likely to borrow £360bn in 2021, which is over 18% of GDP and twice the peak of the global financial crisis.
• The crisis will leave a legacy of lasting public and private debt which will exacerbate inequality. It’s also accelerating the pace of change – shortening supply chains and increasing resilience and home working. Innovative firms will be the ones that survive the pandemic.
• Concluding new trade deals is one of the main opportunities from leaving the EU, as all new deals will be specifically tailored to help shape our economy.
• Negotiations with the EU continue, and we’re looking to mirror the deal the EU has struck with other friendly nations like Canada and South Korea.
• The aim is to sign FTAs in the next three years that cover 80% of UK trade (Australia, USA, New Zealand, Canada).
• Trade deals provide security at home, and opportunity abroad by opening-up new markets. This leads to growth in investment, higher wages, and more jobs. They’re particularly important to SMEs as they are more likely to be bound in red tape when exploring export opportunities.
• It’s crucial to our future prosperity that firms are given the tools they need to leap into global trade and investment. And there’s nowhere this is more important than in the FTA with the US.
• We want the FTA to support SMEs and unlock trade and investment opportunities for others, and so far, the negotiations are going well.
• The SME Chapter is the first step, and the government is going further to push for SME-friendly measures on customs, business travel, digital trade and IP, and reducing/removing tariffs. Further discussions between negotiating rounds will cover rules of origin, market access, digital telecoms, IP, and professional business services.

John:

• Covid-19 has allowed us to bring global insight to our members.
• Our priority is to liberalise the economic and investment relationship.
• SMEs have potential to be the biggest winners, assuming:
  • A dedicated chapter for SMEs
  • The practical impact of what the focus on SMEs should be is covered
  • Canada do more work to speak to provincial businesses and explain how their domestic businesses can take advantage
  • We make the opportunities to export a reality, rather than just a possibility.

Key questions we answered:

1. Does the November Presidential election mean a comprehensive trade deal could be sacrificed for a more limited deal in the interest of getting something secured quickly?

• Lord Grimstone – There’s no point in wasting this opportunity solely for the sake of speed. A bit of time pressure is never a bad thing to get things settled. The complexity of US approval processes means there is a potential for a window before the US election, but it’s not the be-all-and-end-all. Time is not of the essence.
• John – We’re very encouraged about what we hear from government about striking the right deal, not the quick deal.

2. What about the controversial areas such as health, food and drink?

• Lord Grimstone – I can’t count the number of times I’ve said “we will do nothing that lowers our food standards.” I think some of the scare stories about a Machiavellian plot to lower standards are ill-founded. The NHS is not up for sale as part of the FTA either. We’ve also announced a commission to bring the voice of the farming/agribusiness sector into the heart of the negotiations.
• John – The key will be in transparency about how a deal is put together. We need to take advantage of the mechanisms that allow SMEs to have consistent access to the negotiations/negotiators and understand the trade-offs. The US will want some access – and trade-offs will be necessary for it to be seen as a good deal.

3. Lord Grimstone, considering the tensions with China, can security and trade be decoupled?

• You can decouple them to a point, but no government is going to allow trade or investment that imperils national security. I think people understand this.