Following last month’s provisional agreement on the transition period, focus now turns to substantive negotiations on trade and the future relationship. Business confidence has a lot to do with progress on Brexit, as demonstrated by our latest Policy Voice survey which showed members’ confidence in the economy has turned positive for the first time since negotiations began.
We at the IoD of course hope this momentum will continue, but it’s fair to say there is a considerable gap between the starting positions of the two sides. The Prime Minister has continually referenced her ambition for a bespoke trading arrangement after Brexit, while the EU has been clear it is averse to any deal that fails to maintain the integrity of the Single Market. While negotiations by nature start off with parties that have differing views, they also involve compromise and trade-offs
In the context of the start of trade negotiations, this month we published our latest policy report, Going Global: Trends in Trade. We use membership surveys to identify a wide range of trends in business leaders’ exporting activities and international reach. The report found almost two-thirds of our members are engaged in exporting activities, which is a higher proportion than in 2013. Encouragingly, around one in ten non-exporting members plan to begin trading overseas in the next 12 months.
There is still much that can be done to encourage UK companies to trade internationally. Our non-exporting members reported a number of impediments to overseas business activity, including the lack of internal experience, the need to find time to devote to foreign markets and currency fluctuations. The Department for International Trade, which is currently developing its Export Strategy, should carefully consider the perceived barriers to foreign market engagement by the business community.
In my article for the Financial Times this month, I explained why Britain’s future trade prospects are as much about Europe as the rest of the world. The Commonwealth summit in London was a reminder of the economic opportunities in far-flung regions of the globe. At the same time, however, the benefits of trading with a neighbouring market of 500 million people cannot be ignored.
More widely, our priorities at the moment are to encourage UK policymakers to ensure sufficient room for business to consult on the trade agenda, and to put forward the case for government to publish guidance on preparing for Brexit. The Irish and Dutch governments, for example, have voucher schemes to help businesses plan for Brexit.
As usual, Brexit is keeping me busy. I recently travelled to Northern Ireland where I spoke to officials on the Irish border issue. It’s ironic that the Irish problem was designated a phase one issue, but its intertwinement with trading arrangements mean it will likely form the centrepiece for phase two. I also visited officials in Brussels to ensure our members’ concerns are being heard on both sides of the Channel.
Last week we held the latest instalment of our Navigating Brexit event series which this time saw experts in trade and digital policy gather to talk about how data flows will feature in the negotiations and discuss the type of regulatory regime which might emerge for this area in future. We also organised a high level dinner in London and a workshop in Manchester about digital trade. Each formed part of our project with the US-based think tank Centre for International and Strategic Studies, in partnership with Google, which looks at the digital trade agenda with a particular focus on the transatlantic market.
The month of May will see Brexit coordinators holding more rounds of Article 50 talks before the next European Council summit in June. If you want to stay informed, visit our Navigating Brexit hub for the latest developments and to keep track of all the work we are doing on Europe and trade.
Navigating Brexit for business
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