Business Report Navigates Around Trade Agreements

With a new era of global trade negotiations looming for the first time in living memory, the importance of minimising friction in trade and having zero tariffs and quotas is more critical than ever to small businesses across the UK.

A recent report from the Federation of Small Businesses and the UK Trade Policy Observatory at the University of Sussex Business School has highlighted what small businesses need to capitalise upon from Free Trade Agreements (FTAs):

• The US (46%), Germany (38%) and France (36%) identified as top individual country markets for small exporters and importers over next three years.
• The EU Single Market and Customs Union is the most important trading bloc for current small exporters (62%) and importers (55%), compared to the USMCA (48% and 33%) and CPTPP (45% and 25%)
• All future Free Trade Agreements must include a SME chapter and a dedicated SME committee to be set up including private sector representation and must endeavour to reduce non-tariff barriers

The research involved a comprehensive review of recent major trade agreements and identifies best practice for provisions in Free Trade Agreements that will help SMEs achieve their trade ambitions.

These range from supporting e-commerce, protecting intellectual property rights through robust enforcement, and supporting trade facilitation – particularly with regard to customs procedures. Trade facilitation is critical to SMEs because it reduces paperwork and transport costs and delays.

Federation of Small Businesses (FSB) National Chair, Mike Cherry, said: “Small businesses are already the backbone of the UK’s domestic economy. For our country’s future prosperity, we now need to see their share of global start to catch up, by putting SMEs front and centre of all new trade agreements, especially as we depart the EU.
“It is essential that the needs of smaller firms are at the heart of future FTAs through a dedicated small business chapter in each agreement, and that the Government has the necessary architecture in place, to ensure the small business voice is heard loud and clear.

L. Alan Winters, Professor of Economics at the University of Sussex Business School and Director of the UK Trade Policy Observatory, said: “If the UK economy is to take advantage of the opportunities that are opening up, SMEs will be a central part of the picture. Making sure that trade agreements cater to their needs should be a top priority for Government.”

For details on the report visit www.sussex.ac.uk