The reference to the UK as a “nation of shopkeepers” dates back to 1776, when Adam Smith used it in his book “The Wealth of Nations”. Smith was just stating a fact, rather than being insulting. A story of dubious origin has Napoleon Bonaparte using the same phrase, but also in a straightforward, factual manner. Over a century and a half after Napoleon’s death, Prime Minister Margaret Thatcher, by all accounts, was happy to be known as a grocer’s daughter. She very much understood the value of trade to the UK. Throughout most of its history, the UK has been known as a country, which sailed around the world looking for the best trading opportunities. During the industrial revolution, it began to be a producer of goods as well as a buyer and seller of them. Although many traditional industries declined during the latter half of the 20th century, some have adapted to the modern, digital, world, while others have been replaced by modern industries. The UK is now home to some of the most famous brands in the world (literally), as well as to numerous exciting and innovative young companies, in all kinds of industry sectors.
When it comes to Brexit and trade, people seem to fall into one of two broad camps. The first camp points out that Europe is our main trading partner. The second camp points out that Europe is a very small part of a very big world and that there is literally a whole globe full of opportunities out there. Both camps have a fair point. Europe is a major trading partner for the UK, but the UK is also a major trading partner for Europe. At current time, it is far too early to say what will happen regarding access to the single market, but it does seem reasonable to assume that EU countries which currently export goods to the UK will wish to continue to do so and that therefore there is a very good chance of some sort of trade deal being agreed. At the same time, however, the world extends far beyond Europe’s borders and it makes sense to look at all the opportunities this offers. Successive German governments have long had a policy of supporting the German SME sector in its efforts to tap into overseas markets. In recent years, the UK government has shown signs of recognizing the importance of encouraging smaller, often local, UK companies to “think global”.
There are essentially two ways in which governments can assist companies, large and small (but particularly small, or at least smaller) to start thinking and acting like global players. One is to smooth the path with trade negotiations. Brexit is the obvious example of this, but as we’ve already mentioned, trade should be seen as being a global matter, rather than simply an intra-European one. The UK government appears to have realized this and has made efforts to negotiate beneficial trade deals. Up until relatively recently, it has concentrated on Asia, with some success. For example the 2011 trade deal with (South) Korea led to an immediate upturn in imports of goods and services from British companies. More recently, the government has turned its attention to the Middle East and in particular the Gulf States, hosting the first ever UK-Gulf Cooperation Council Public Private Partnership (PPP) conference. Our own trade with Asia has grown quicker than we had imagined and so we’re writing this from our own experience as well as financial reports.
The second is to provide support by means of UKEF, the export-credits agency, specifically to offer finance, preferably in local currencies, to make it easier for international buyers to buy UK products and to be secured against currency fluctuations.
One thing is certain, we will continue to trade and there is a strong demand for UK products. There will no doubt be a period of negotiation to battle through but once resolved UK exports will be as strong as ever.