Monday, September 27, 2021

US top destination for future UK small business trading, report finds

The US is the foremost country for small businesses in the UK to trade with over the next three years, according to a major new report.

The report, from the Federation of Small Businesses (FSB) and the UK Trade Policy Observatory at the University of Sussex, has highlighted what small businesses need to capitalise upon from Free Trade Agreements (FTAs).

The research involved a comprehensive review of recent major trade agreements and identifies best practice for provisions in Free Trade Agreements that will help SMEs achieve their trade ambitions.

These range from supporting e-commerce, protecting intellectual property rights through robust enforcement, and supporting trade facilitation – particularly with regard to customs procedures.

Small businesses’ share of global trade lags behind that of our domestic economies. A key issue will be tackling the low use of preferences in FTAs by SMEs. For example, the compliance costs of stringent rules of origin can mean small businesses choose not to take advantage of preferential terms of trade within an FTA.

Understanding the extent and the nature of, often fixed cost, non-tariff barriers that have a disproportionate impact on small traders (whether in relation to different technical standards, licensing procedures and certification, complex customs procedures, lack of intellectual property rights enforcement) is essential. FTAs should be configured to make it much easier for SMEs to take advantage of the tariff preferences they offer.

Meanwhile 62% of small business exporters and 55% of small importers, identify the EU as their most important trading bloc, ahead of the new US, Mexico and Canada (USMCA) and the already in force Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

The US comes out as the most important individual country market for small firms hoping to export over the next three years with 46% selecting the country, ahead of 38% who chose Germany.

The report calls for all future FTAs to establish a dedicated SME committee which includes private sector representation. This committee should have a meaningful say in the key areas that will affect small firms whether that is e-commerce or trade facilitation.

It is essential that future FTAs ensure no customs levies are placed on electronic transmissions and prevent discrimination against digital products from other parties. Facilitating trade through introducing Single Window arrangements that allow importers and exporters to electronically complete import and export requirements at a single entry point would also be an important step in the right direction.

Finally, ensuring the enforcement of intellectual property protection is also of key importance to all small businesses.

“Small businesses are already the backbone of the UK’s domestic economy. For our country’s future prosperity, we now need to see their share of global start to catch up, by putting SMEs front and centre of all new trade agreements, especially as we depart the EU,” said FSB National Chair, Mike Cherry.

“It is essential that the needs of smaller firms are at the heart of future FTAs through a dedicated small business chapter in each agreement, and that the Government has the necessary architecture in place, to ensure the small business voice is heard loud and clear.

A message from the Editor:

Thank you for reading this story on our news site - please take a moment to read this important message:

As you know, our aim is to bring you, the reader, an editorially led news site and magazine but journalism costs money and we rely on advertising, print and digital revenues to help to support them.

With the Covid-19 pandemic having a major impact on our industry as a whole, the advertising revenues we normally receive, which helps us cover the cost of our journalists and this website, have been drastically affected.

As such we need your help. If you can support our news sites/magazines with either a small donation of even £1, or a subscription to our magazine, which costs just £33.60 per year, (inc p&P and mailed direct to your door) your generosity will help us weather the storm and continue in our quest to deliver quality journalism.

As a subscriber, you will have unlimited access to our web site and magazine. You'll also be offered VIP invitations to our events, preferential rates to all our awards and get access to exclusive newsletters and content.

Just click here to subscribe and in the meantime may I wish you the very best.

Latest news

Related news

By continuing to use the site, you agree to the use of cookies. more information

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.