17/06/12 

British businesses value free trade with other European nations, but are more likely to be sceptical or unsure about whether the current level of integration in the European Union (EU) is beneficial to their company’s prospects. The findings come from a survey of over 7500 companies released by the British Chambers of Commerce (BCC), ahead of a meeting of EU leaders today.

The BCC survey asked companies of all sizes about which type of trading relationship with other countries in Europe would most benefit their business in the long-term.

When asked what kind of trading relationship they would like with Europe, over half of businesses surveyed expressed no opinion. Of those that did, more than half (51%) of exporters favour a ‘free trade area’, versus less than a third (31%) who support the concept of an ‘economic union’.

More than half (55%) of all respondents are unsure about which trading relationship with Europe would benefit their business. When broken down, this amounts to a third (33%) of exporters, and a huge two thirds (66%) of non-exporters.

Support for UK entry into a monetary union like the eurozone was at just 3.9% of all business respondents, showing the impact of the on-going Euro crisis on UK business attitudes toward the concept of a single currency. At the other extreme of the spectrum, just 4.4% of all respondents favoured leaving the European Union altogether and agreeing bi-lateral trade agreements with individual European countries.

When it when it came to increasing sales in global export markets, some reported that it was easier to trade with a range of non-EU countries (e.g. 9% reported regulatory barriers for EEA countries versus 12% of businesses reporting similar barriers in the EU), suggesting that the single market has yet to deliver the growth Europe so desperately needs.

Commenting on the findings, John Longworth, Director General of the British Chambers of Commerce (BCC), said:

"It is not surprising that businesses want to see more free trade, but less integration across Europe. Companies tell us that the burden of European regulation and legislation is in danger of making them less competitive in the global market."

“Our results show that politicians must not be entranced by the siren songs of either the pro- or anti-European camps. Less than one in every twenty companies responding to our survey holds either extremely positive or extremely negative views about Britain’s relationship with Europe. It is also staggering to see just how many businesspeople are unsure or unaware of whether links to the rest of Europe benefit them.”

“Companies in the real economy want the UK government’s European agenda to be practical and pragmatic. They also need better information about what Europe means for them. So ministers must push hard to remove barriers to free trade among European countries, and make the single market a reality for all businesses. For example, the single market for services, where the UK is the second-biggest exporter in the world, hasn’t even really got started. Companies we surveyed indicated that they found it as easy to increase their trade with some non-EU countries, as it was to increase their trade with other EU countries. Since the single market is the only real source of sustainable growth for the EU, leaders must focus on how to make it work better.

“At the same time, our representatives in Brussels must continue to fight all proposals that would slap additional costs or regulatory burdens on British businesses” 

Notes to editors:

As part of a major international trade business survey conducted between 10th and 27th January 2012, the BCC asked member businesses about the type of trade relationship they felt would most benefit their business. This gathered 2,511 responses from exporters and 5,167 from non-exporters.

Businesses were asked the following question:

Which of the trade relationships with Continental Europe do you believe would most benefit your business in the long term?

 

Exporters

Non-exporters

All

Bi-lateral trade agreement*

5.6%

3.9%

4.4%

Free-trade area**

34.6%

16.7%

22.6%

Economic union***

20.9%

11.1%

14.3%

Monetary union****

6.2%

2.7%

3.9%

Don't know/no opinion

32.6%

65.5%

54.8%

*Bi-lateral trade agreement: (The UK leaving the European Union) - Agreement between the UK and one or more European nations or trading groups that gives each favoured trade status relating to certain goods and services.

**Free-trade area: Participation in an internal market, with regulation relating to goods and services but not social legislation. Commerce in goods and services is conducted across borders, without tariffs or hindrances; with a uniform tariff on trade with non-member countries; but (in contrast to a common market) capital and labour may not move freely.

***Economic union: Where commerce in goods and services is conducted across borders, without tariffs or hindrances; with a uniform tariff on trade with non-member countries; capital and labour may move freely; and there is harmonisation of industry standards, regulatory policies and some social legislation, (examples include the EU).                                                                                                               

****Monetary union: Where commerce in goods and services is conducted across borders, without tariffs or hindrances; with a uniform tariff on trade with non-member countries; capital and labour may move freely; there is harmonisation of some industry standards and regulatory policies; and (in contrast to an economic union) there is a shared currency, central bank and interest rate policy.

The British Chambers of Commerce (BCC) is the national voice of local business.

The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce, serving over 100,000 businesses across the UK, which employ over five million people. For more information visit: www.britishchambers.org.uk

Ends

Notes to editors:

The British Chambers of Commerce (BCC) is the national voice of local business.

The BCC sits at the heart of a powerful nationwide network of Accredited Chambers of Commerce, serving over 104,000 businesses across the UK, which employ over five million people. For more information visit: www.britishchambers.org.uk

Media Contacts:

Liz Larvin
Tel: 020 7654 5813 / 07825746812
Email: l.larvin@britishchambers.org.uk

Lisa Morrison
Tel: 020 7654 5812 / 07717682221
Email: l.morrison@britishchambers.org.uk