Exporting is great for your business
Discover the benefits of exporting
Whatever your opinion on the results of the EU referendum, there is no doubt that the landscape of international trade is going to change over the next few years.
In deciding to leave the EU the UK has set itself on a path to becoming more global in international trade.
So, what are the opportunities SMEs will have, what do they need to consider before exporting and what are the risks they will face?
UK - Trading with the rest of the world
Made in the UK, Sold to the World
A strategy to boost UK exports to £1 trillion a year
In 2022, the UK exported £813 billion in goods and services and imported £898 billion. A deficit of £230 billion on trade in goods was offset by a £145 billion surplus on trade in services. The UK had a trade deficit with the EU of £43 billion in 2021 and a surplus with the rest of the world of £15 billion.
A 12-point export strategy
and reap the benefits of our free trade deals.
Export Support Service
Supporting exporters across all parts of the UK
Financial support for exporters
UK Export Finance
Government-to-government partnerships
UK Export Academy
Our exporting networks across the UK
Export Campaign - Made in the UK, Sold to the World
Piloting a new UK Tradeshow Programme
Making exporting easier
Our global reach
Opening markets worldwide
Barriers to exporting
Resources
Finance Risk
Fear
Building on the 2018 Export Strategy
Better Support
more joined up and more digital to reach SMEs at scale
Better access to finance
A better business environment
Better data
Free for PREMIUM Members
BizEquals Protect
• THE HEALTH & SAFETY SERVICE
• THE LEGAL SERVICE
• THE TAX SERVICE
Premium members get:
5 Advice Lines - HR, Health & Safety, Legal, Tax & VAT
3 Document Libraries - HR, Health and Safety, Legal, with nearly 800 free, downloadable templates
UK Export Academy
Key facts:
Businesses will get:
- An export action plan
- Educational events, independent learning, networking, mentoring
- Educational webinars covering key topics
- Shared experience from other SMEs and Export Champions
- Support from International Trade Advisers
- Other DIT support such as joining trade missions, grants and funding
- Referrals to specialist support
UK Export Academy
Who is it for?
The UK Export Academy is open to any business in the UK that has a product or service that can be sold in international markets, whether they want to start exporting or expand into new markets.
What will your business get from the UK Export Academy?
Foundation course: Build your knowledge and confidence if you’re relatively new to selling internationally or interested in learning about how to start. You will leave the foundation course with an export action plan tailored to your business.
Sector faculties: Sector specific webinars, masterclasses and virtual missions. More experienced exporters can join sector faculties to provide your business with specific information to allow you to operate effectively in particular foreign markets or sectors.
Market access events: Learn about the benefits of new market opportunities, including the benefits of new free trade agreements.
Key numbers of the Export Strategy
56%
expected % of global growth accounted for by the Indo-Pacific region by 2050.
80%
65%
77%
of global GDP will be in the services sector by 2030.
Digitalisation of Trade - easing the path to doing more business
The future of Digital Trade
The impact of digital technologies on the global economy has been huge. UNCTAD estimated that the value of e-commerce sales reached almost $26 trillion in 2018, of which $21 billion was in B2B trade, comprising sales over online market platforms and electronic data transactions.
As a major exporter of services, the UK is well placed to benefit from the increasing digitalisation of trade. Over $200 billion of digitally delivered services were exported in 2019 according to the ONS. It is estimated that further digitalisation of trade could see trade costs fall by 80% and could generate an extra £25 billion of SME export growth.
According to the International Chamber of Commerce (ICC), trading across borders is currently a complex process that is highly dependent on paper documents. It assesses that a typical cross-border transaction involves multiple participants, requires the exchange of 36 documents and produces 240 copies.
In order for the UK to become a world leader in digital trading systems, the world's first centre dedicated to accelerating the digitalisation of international trade has been set up in the region. Co-ordinated by the ICC, the Tees Valley Mayor, the Tees Valley Combined Authority, industry, the government and a wide range of experts, the Centre for Digital Trade and Innovation will provide a focus for efforts to develop technologies and approaches to unlock opportunities and remove unnecessary barriers.
Digital Trade: Board of Trade
World's first Digital Trade Centre
A blueprint for UK Digital Trade
The increasing importance of Digital Trade
The UK's Digital Trade
While the UK excels in the potential for digital delivery of services, it lags behind in the actual digital trade related to charges for intellectual property use not included elsewhere or telecommunications, computer, and information services. This is below the OECD average and significantly lower than in the best-performing countries, indicating that there is room for improvement in this area.
Experimental data from the Office for National Statistics (ONS) provides complementary information on the actual digital delivery of services. The data shows that remote supply, or mode 1, accounted for 65% of services exported via modes 1, 2, and 4, and 22% of services supplied through all modes. Additionally, approximately 55% of trade in services was estimated to be imported (excluding mode 3) by remote means. The top three services that had the highest proportion of imports supplied remotely were intellectual property (95%), telecommunications (83%), and transportation (80%).
The United Kingdom has a significant potential for digital delivery of services exports, particularly in the financial services sector. However, there is room for improvement in the actual digital trade related to certain services. The ONS experimental data shows that remote supply is a key driver of digital trade, indicating the importance of digital infrastructure and technological capabilities in facilitating the digital delivery of services.
Source:
SERVICES TRADE IN THE UNITED KINGDOM AND THE GLOBAL ECONOMY
OECD TRADE POLICY PAPER
November 2021
Modes of supply for Services
Mode 1 involves cross-border supply, where a service is produced in one country but consumed in another.
Mode 2 refers to the consumption of services abroad, where the consumer or their property are abroad when the service is supplied.
Mode 3 involves commercial presence, where a service supplier establishes a presence abroad to provide services.
Mode 4 is the presence of natural persons, where an individual is present abroad to provide a commercial service.
Steps your business should take to trade abroad under the new rules
Import, export and customs for businesses
"... trade is no longer limited to just big firms, or medium-sized firms. You can be a small firm, three to five people, based here, and you can sell around the world. And that is increasingly going to be the case."
World Economic Forum/swiss-image.ch
Mark Carney
Former Governor of the Bank of England
Potential Export Growth
A recent report Opportunity and challenges for SME exporters, January 2021, has been commissioned by Sage and prepared and published by Capital Economics. Their research suggested that there were 375,000 SMEs who have exportable goods or services but were not currently exporting. Using average turnover per employee in each sector, they estimated that export revenues had the potential to rise by £290bn a year.
As this represents a doubling of the current level of exports, it is unlikely to be achieved in the short term. However, if sufficient barriers can be removed to achieve a 10% rise in exports, this additional £29bn in revenue would support 210,000 jobs and would be equivalent to the turnover of around 50,000 SMEs.
SME Exporters under pressure
Only 26% of SME exporters saw increased export sales. The picture for future orders is even weaker, with 28% reporting a decrease against 24% an increase. Energy, labour, and raw materials are the three biggest cost pressures for SME exporters.
£290 billion
Our Export Marketplace can help get you exporting
It can be daunting to contemplate exporting to another country. You may be convinced about the worth to your business but are unsure of what steps to take or what is required.
Our Export marketplace is the perfect place to find the expertise you need to make the path to export success smoother and easier.
Encouraging more businesses to export more is recognised as vital to the UK's future growth and prosperity. Just over 10% of businesses currently export but goods-exporting businesses are, on average, 21% more productive.
Why not explore our Export pages?
UK Export Finance: Guide for exporters seeking trade finance
Considering Export Finance
When you are considering exporting, one thing you need to work out is how to plan the financial side of things. Not only do you take on the extra risk of shipping goods to customers with whom you may not have had a previous relationship, you also have to incur a delayed payment to take account of the longer time to delivery. Local payment terms may typically be longer than in the UK as well. There is also the currency risk to consider.
Export finance providers help businesses overcome the financial challenges of exporting in a variety of ways. They can help release capital tied up in your overseas orders and provide risk protection with insurance against non-payment by your overseas buyers.
There are many providers who provide finance options and to ensure that companies can access sufficient funds, the government also provides partial guarantees (typically 80% of the risk) to third-party lenders to provide export working capital facilities.
UK Export Finance
UK Export Finance is the UK's export credit agency, designed to ensure that no viable UK export fails for lack of finance or insurance.
We work with over 100 private credit insurers and lenders to help UK companies access export finance (the particular class of loans, insurance policies or bank guarantees that enable international trade to take place as easily and securely as possible). We exist to complement, not compete with, the private sector.
We help UK companies to:
- win export contracts by providing attractive financing terms to their buyers
- fulfil contracts by supporting working capital loans
- get paid by insuring against buyer default
We can support exports for any size of company and across all sectors, from capital goods to services and intangibles such as intellectual property.
UK Export Finance (UKEF) provided £12.3 billion in support for UK exports from 2020-2021, almost treble the amount provided in the previous financial year, and is estimated to have supported up to 107,000 UK jobs and helped to keep UK businesses and key industries afloat.
Through the Temporary Covid Risk Framework UKEF provided £7.3 billion in support to exporters who were severely disrupted by the pandemic, securing up to 71,000 UK jobs at major firms like Nissan, easyJet and British Airways that may otherwise have been lost.
61
81%
72,000
How much do you know about the
World Trade Organisation?
.
WTO: the operator of a global system of trade rules
Following the ending of the Second World War, the General Agreement on Tariffs and Trade (GATT) was set up in 1948. It was designed to ensure that global trade was conducted in a more orderly fashion following the collapse of trade in the 1930's. It was also meant to ensure that trade disputes and (lack of) market access were no longer seen as a reason to go to war.
Since it was set up, global export volumes have increased dramatically, rising from less than 5% of global output in 1948 to more than 30% today. As the global economy developed and more complex, the fact that GATT mainly dealt in goods became a hindrance. In 1995, the WTO was set up to cover trade in services and intellectual property, as well as trade in goods. Importantly, it also created new procedures to allow the resolution of trade disputes.
Is your business in the business of helping small businesses
Complexity made simple
Currently, the WTO has 164 members, of which 117 are developing markets or separate customs territories. Together, these countries are responsible for around 95% of world trade. It is located in Geneva, Switzerland. Perhaps somewhat unusually, decisions are taken by consensus of the entire membership. The essential purpose of WTO is to provide a forum for negotiating agreements that reduce barriers to trade and that also provide a level playing field for all. It provides the legal framework for implementation and monitoring as well as the mechanisms to settle any disputes that arise from these agreements.
The agreements are generally pretty lengthy and, because they are legal documents covering a large number of areas, they can be highly complex. Underpinning all the agreements, however, are six basic principles:
WTO - six basic principles
- 1. Non-discrimination
- 2. More Open Trade
- 3. Transparency
- 4. Competition
- 5. Developing Countries
- 6. Environmental protection
With a few exceptions, no country should discriminate between one trading partner and another, nor between its own products, services and citizens and those of other countries.
Making trade more open by reducing obstacles such as customs duties (tariffs), import bans, quotas or other restrictive measures.
A key ingredient of investment and trade is stability, along with predictability. Reducing the arbitrary raising of trade barriers helps job creation and consumer confidence.
Countries can be tempted to try to protect their own markets and producers through measures such as export subsidies and dumping products on to international markets at below cost to boost or maintain market share. WTO rules try to establish whether something is fair or not and how best governments can respond.
As more than 75% of WTO members are classified as developing, it is important to allow those economies time to adjust to market economies. WTO can permit them greater flexibility and even special privileges to aid transition.
As long as countries apply measures equally to domestic and foreign companies, members are permitted to introduce measures to protect the environment, along with public health and animal and plant health.
The UK's WTO schedules
The UK has been a member of WTO in its own right since 1 January 1995 and was a co-founder of GATT, along with 22 other countries, in January 1948.
Having left the EU, the UK has submitted its own set of 'schedules' at WTO. These are a series of commitments that set the terms of tariffs, quotas and any limits on subsidies. For Goods the schedule includes commitments under the General Agreement on Tariffs and Trade (GATT) and its schedule of commitments under the General Agreement on Trade in Services (GATS) to the World Trade Organization (WTO).
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