Slower than expected export growth to non-EU markets is creating added pressure for a barrier-free Brexit deal according to a new report from the EEF.
Based on a survey of 291 manufacturing exporters conducted in March, the report – Global Trade – Run Aground or Structurally Sound – says that many export destinations are already not as open to trade as they were before the financial crisis and that this is impacting on UK export performance.
According to the findings, world trade volumes are more than 20 per cent below pre-crisis trend levels after nearly a decade, and the UK’s average export growth in the post-crisis period is around a quarter of that in the previous 12 years.
The situation is particularly acute in key emerging markets, where protectionist policies implemented in the wake of the financial crisis continue to impact UK trade.
For instance, one in six exporters to China has seen their trade affected by Chinese government intervention to support local businesses, whilst one in five exporters to Brazil have experienced a reduction in trade finance. What’s more, 10 per cent of companies selling to the US experienced an increase in tariffs.
Against this backdrop, EEF argues that it is doubly essential that the UK government ensures barrier-free access to the EU as part of any deal on Brexit. 47 per cent of those surveyed said that they don’t want to lose the advantages of low tariffs, whilst 42 per cent cited concerns over efficient export procedures in our trade with the EU.
Commenting on the report, EEF’s chief economist Lee Hopley said: “Exports remain fundamental to the performance of UK industry and the economy overall. In recent years, however…the pace of world trade has been held back not just by weak demand but by an increase in protectionism leaving manufacturers facing increasingly complex hurdles in overseas markets.”
“Industrial strategy must create the competitive conditions for companies exporting from the UK, whilst ensuring tariff-free access to trade with our biggest and nearest market and helping deliver future trade liberalisation will be key to the UK’s future trading success.”