By Max Clarke
The Government has today published a number of strategies boosting trade and investment in order to drive the UK’s economic recovery. The move has been welcomed by business leaders as it demonstrates the government's recognition of the key role that exports and small businesses play in the economy.
Among these are to:
Improve and expand the trade finance and insurance products it offers — boosting support for businesses who want to export, particularly SMEs — and bringing the UK broadly into line with the services provided in other countries;
Increase UK Trade and Investment’s focus on emerging markets and launch: a new online service offering access to sales leads around the world; a new online peer-to-peer exchange to enable companies to help themselves and help each other; and a new high profile award for companies which are ready to export, but need encouragement to take the next step.
Lobby European partners to radically improve the regulatory environment in the Single Market for SMEs - including exempting SMEs from unnecessary EU regulation such as certain accounting requirements.
The Paper also sets out an ambitious range of other actions to help secure a strong, sustainable and open global economy that benefits all nations, including:
Working to finalise the Doha round of trade negotiations delivering a £110bn boost per year to the global economy. 2011 is the make or break year;
Pursuing an ambitious programme of EU Free Trade Agreements with key trading partners including India, Canada, Singapore, the South American Mercosur countries (Argentina, Brazil, Paraguay, Uruguay) and hopefully also Japan;
Assisting developing countries to benefit from trade and investment by pushing for global trade rules that support their needs, promoting greater market access for Least Developed Countries and implementing ambitious bilateral aid programmes that promote trade and regional integration, particularly in Africa;
Resisting protectionism, championing open markets, and pushing back the remaining trade and investment barriers within the European Single Market and the wider world.
Business Secretary Vince Cable commented:
“Improving the finance and insurance products that oil the wheels of trade, exempting SMEs from unnecessary EU regulation, an ambitious programme of Free Trade Agreements, finalising the Doha round — these are practical measures to help drive growth.”
Andrew Mitchell, the International Development Secretary, said:
“The Trade and Investment White Paper marks a redoubling of the UK Government’s efforts to enable developing countries to follow their own paths to growth through trade and investment.
“Trade will become a central theme across our bilateral aid programme, particularly in Africa, helping developing countries tackle the obstacles that prevent them from making the most of trading opportunities.”
New support for exporters
Four new schemes will be created to help exporters get access to credit and insure themselves against risk, and one existing scheme will be extended, the Government announced today.
The Government believes rising exports will be crucial to securing economic growth and is taking steps to help UK firms compete internationally.
The new schemes will be:
• Export Enterprise Finance Guarantee Scheme established by the Department for Business, Innovation & Skills, offering export finance valued up to £1m to SMEs.
• ECGD will launch the Export Working Capital Scheme for those not eligible for the Export EFG, offering export finance worth over £1m.
• Bond Support Scheme offered by Export Credits Guarantee Department (ECGD), under which the Government will share risk with lending banks on the issue of contract bonds.
• ECGD will support banks offering foreign exchange hedging contracts to small and medium enterprises (SMEs) by sharing credit risk.
In addition, ECGD will extend its existing short term export insurance to cover a broader range of exporters, including SMEs.
Trade and Investment Minister Lord Green said:
“The Government will offer an expanded, better coordinated range of products to large and small businesses alike, working closely with the banks to widen access to the capital and credit insurance exporters need to make the most of their opportunities.
“Our exporters are crucial to securing the recovery and we want to do everything we can to help them grow. This new support will help British exporters compete and win business overseas.”
Trade Policy Minister Edward Davey said:
“Businesses have told us they want more help to access the vital credit they need to meet rising orders for exports, and to protect them from some of the uncertainties of international trade.
“Today we are taking strong action to expand the range of support the Government offers businesses, particularly small firms. With these measures in place, entrepreneurs will have the Government right behind them as they take the best that Britain has to offer to markets around the world.”
In March the Bond Support Scheme will be available from banks and the extended Export Insurance Policy direct from ECGD. The other three measures are each expected to launch in April.
The CBI today also released a comment on the Government Trade White Paper, the new Export Enterprise Finance Guarantee Scheme, and other new trade finance products.
John Cridland, CBI Director-General, said:
“The new Export Enterprise Finance Guarantee Scheme and other new forms of financial support are good news for business, and long overdue. They will help UK companies step up export activity which is vital to deliver private sector growth and drive the economic recovery.
“Many of these new finance products are already on offer by most of the other G8 countries, so this scheme will bring the UK up-to-speed in competition terms.
“There’s a particular need to tackle export under-performance in smaller companies, so SMEs should be encouraged by these new trade finance products designed to help them break into foreign markets and grow their businesses.
“The Government now needs to focus on getting the marketing of these products right. This needs to be straight-forward and carefully targeted so that it reaches the companies with export potential. Banks also need to be ready to roll out these facilities quickly.
“We welcome the Government’s renewed commitment to conclude the important World Trade Organisation negotiations.”