Prince William told The Times last week about how he recognises the importance of Britain’s SMEs trading overseas, and praised the Commonwealth, describing it as “the mother” of all business networks.
As Liverpool gets ready to host the nine-day International Business Festival, which will attract more than 30,000 business professionals from around the world at the Wayne Hemingway designed, 8,100 square metre Exhibition Centre, the Duke of Cambridge explained that, in his view, it was “vital for future growth and prosperity” that more SMEs export their goods and services overseas. He added that “Britain has always been a great trading nation, and a hub for global commerce”, and concluded that “where our fast-growing community of small and medium-sized enterprises is concerned, we cannot risk falling behind.”
The Prince has also encouraged SMEs to look to the Commonwealth for trading partners, saying that “there is no other network on earth that comes close to the Commonwealth in terms of its breadth and impact”. He also hoped the festival would support the next generation of UK-based entrepreneurial leaders, suggesting that “it’s only by nurturing the talents of Britain’s young people that we will be able to build the fair and prosperous society we all want to live in.”
According to data from the Office of National Statistics, from 2016, Britain exports around £547.5bn worth of goods every year, with £235.8bn of that figure sold into the EU, and £284.1bn to the rest of the world. The UK also imports £318bn worth of goods and services from the EU annually, and £243bn from the rest of the world.
Despite the Duke of Cambridge’s praise for the advantages of the Commonwealth as a trading partner, the ONS points that “distance is important”, pointing out that Britain’s strongest business relations tend to be with neighbouring countries, such as Ireland, despite the fact that Ireland, for example, has a much smaller economy than further-away countries such as Italy or Spain. China and the US, thanks to the enormous size of their respective economies, are the exceptions to that rule; the UK exports more than £100bn to the US annually, nearly twice as much as to any other country.
According to The Times, Britain had a trade deficit of £26.6bn at the end of Q1 2018. The figure has narrowed by £13.3bn, but the deficit is still a worry for politicians, economists and British business as a whole. The UK has trade deficits with larger EU economies such as Germany, to whom Britain exported £49bn in 2016, whilst importing £75bn worth of German goods and services. The UK also has a trade deficit with France and The Netherlands, its third and fourth largest exporting destinations, with Germany second, and the US first.
On the positive side of the ledger, Britain runs a trade surplus with 67 countries in total, including Brazil, Saudi Arabia, Ireland and the United Arab Emirates, with the largest being the US, with the UK importing £66bn worth of products whilst exporting more than £100bn.
Britain imports more than half of its goods from the EU, and with the EU as its largest overall export partner, despite an overall trend that shows trade with the EU decreasing, whilst increasing with counties, notably the US and to a lesser extent China, and regions such as the Commonwealth, it remains to be seen whether Brexit forces British businesses to ramp up, or begin to export to non-EU, less familiar trading partners.
The Duke of Cambridge certainly seems to think so, and it’s clear, thanks to events such as the International Business Festival, which Chairman Max Steinberg has described as the “biggest in the world” , Britain retains a reputation as a world-class place to do business.
The share of UK exports of goods and services going to the EU has already fallen somewhat, from 54% in 2000 to 43% in 2016, suggesting that Britain is perhaps finding new markets for its biggest exports by product category; motor vehicles, chemicals and chemical products, and financial services; and more niche services supplied by Britain’s nearly 6m SMEs.
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