Posted by

Kamala Mackinnon, Campaigns Adviser

25 May 2012

Improving Britain’s trade performance is crucial, not only to driving the UK’s economic recovery but to establishing a more balanced economy for the long-term that is less vulnerable to financial shocks. In particular, at a time when the eurozone is, in the words of Mervyn King, “tearing itself apart”, there has been increasing focus on the need for the UK to reorientate its goods and service towards the rapidly-developing BRIC markets.

This sentiment is echoed by the Business, Innovation and Skills Select Committee’s current inquiry into UK trade with Brazil.  Brazil is one of the fastest growing emerging economies and is currently the sixth largest economy in the world by nominal GDP. Brazil’s economy ranks highest among all the South American countries and is, according to analysis by Goldman Sachs, due to become one of the world’s top five economies by 2050. 

This week BCC met with a delegation from APEX, the Brazilian trade and investment promotion agency. It is clear that there are vast opportunities in the country, as indeed there are in the other emerging markets, which UK firms are yet to take full advantage of. BCC’s latest research confirms that the EU remains the most popular destination for UK exports. Just under half of Chamber exporters see the large and faster-growing ‘BRIC’ economies of Brazil, Russia, India and China as the best prospective markets for increasing business over the next twelve months.  Unfortunately, exporters to the fast-growing BRIC markets are the most likely to encounter barriers that hold back sales.

There is a clear relationship between the volume of UK exports to overseas markets, and the formal legal agreements that underpin trade. SMEs in particular, which lack the resources of larger companies, would benefit from breaking down the tariffs and bureaucracy of markets that are not currently covered by free trade agreements with the EU.

Differences in language and culture are seen as important barriers to entering fast-growing markets like the BRICs. It is important to ensure that the next generation of business owners are ‘born global’ with language skills.  Portuguese is spoken by over 230 million people worldwide and therefore must be focused on alongside other major languages in the National Curriculum to achieve this purpose.

Global trade has always been vital to the UK. Britain’s status as a leading industrial nation was built on the strength of its export industries and it remains one of the most open economies in the world. But this is no time to dwell on past glories, or to be complacent about our current position. On the ground, UK firms looking to export for the first time continue to face too many barriers that put them at a competitive disadvantage to their overseas competitors. The time is ripe for a re-appraisal of the way we implement support for new exporters in this country.  We must do everything we can to help would-be exporters access both mature and emerging markets.