How to improve the post-Brexit exporting environment

The Institute of Directors has today published a policy paper, ‘Exporting in a post-Brexit world: an agenda for the UK government’, which explores how different types of exporters are navigating the post-Brexit trading environment and makes a series of recommendations to government to ease the impact on UK businesses.

IoD research shows exporters are feeling constrained by the current trading environment. A combination of Brexit related friction, wider macro-economic pressures and a heightened sense of geopolitical risk has weakened confidence in their exporting initiatives.

Of those who have seen a dip in export levels, Brexit is the primary reason. Firms, especially SMEs, have found they are now at a competitive disadvantage to their EU counterparts, and border administration adds to business costs. Looking to markets beyond the EU presents a whole new challenge.

Larger businesses have found they have been able to overcome some of the cost pressures, however they are most affected by staff shortages, which in turn impacts the resource they can expend on exports.

Complex border processes are the biggest disincentive for those who have never exported before and, as a result, there is little that can be done to encourage them to expand into overseas markets.

The IoD’s policy recommendations to government include:

1. Creating a central, easily searchable database of international trade advisors by region and sector, with their expertise listed.
2. Offering clear and concise advice to smaller businesses on how to engage with the SME chapters in FTAs to realise the benefits they offer and build connections with local contacts.
3. Establishing an SME special committee to monitor the implementation of SME chapters following ratification of FTAs.

Emma Rowland, Trade Policy Advisor at the Institute of Directors, said:

“Since coming out of the pandemic, UK exports have been sluggish in comparison to other top economies. A perfect storm of macro-economic challenges has made the post-pandemic trading environment more difficult for business, particularly smaller firms, and those who do not have significant export experience.

“However, it is clear that Brexit has had the largest influence over businesses’ exporting strategies, having created barriers to trade and also increased competition from EU-based firms. Some firms are trying to reorientate to new markets, but it is not straightforward and feels like second best.

“Whilst Free Trade Agreements are important for the UK’s post-Brexit standing, they are not a panacea. At this time of economic turmoil, it is crucial the government takes the necessary steps to remove barriers to trade and encourages UK businesses to export with the EU and beyond.”

You can download the full paper, ‘Exporting in a post-Brexit world: an agenda for the UK government’, here.