The Government has announced its trade strategy today, which includes increasing finance and insurance services and lobbying to cut EU red tape.
The Trade and Investment White Paper places particular emphasis on helping small and medium sized enterprises to expand and export.
The Government pledged to improve and expand the trade finance and insurance products it offers, bringing them into line with the services provided in other countries, and to lobby European partners to radically enhance regulations in the Single Market for SMEs – including exempting them from unnecessary EU regulation.
It will also increase the focus on emerging markets and launch new online services offering access to sales leads worldwide and facilitating communication between companies.
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 and pursuing a programme of EU Free Trade Agreements with key trading partners, such as India and Mercosur countries.
Business Secretary Vince Cable said: “Trade and inward investment are key drivers of growth – they are fundamental to rebuilding and rebalancing our economy. 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.”
The Paper sets four new schemes:
• 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.
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.”
Manufacturers’ organisation EEF welcomed the announcement.
EEF director of policy, Steve Radley, commented: “An export-driven recovery will need improved access to finance, particularly for those companies looking to make greater inroads to faster growing, and ultimately riskier, markets. If the private sector is going to generate the right type of growth through exporting, companies going after new contracts must have confidence that the finance and support to meet those orders is available.”
Andrew Kuyk, director of sustainability at the Food and Drink Federation, said: “We believe that food and drink manufacturing has the potential to make an even greater contribution to the economic recovery, particularly through our export performance which we expect to pass the £10 billion export mark early this year. In particular we welcome the fact that Government recognises that international trade has a key role to play in global food security and that open trade is essential to ensure that the world’s food supplies can reach the right markets.”
The CBI also responded to the Government’s Trade White Paper.
John Cridland, CBI director-general, said: “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.”
The Bond Support Scheme will be available from banks and the extended Export Insurance Policy direct from ECGD in March. The other three measures are expected to launch in April.
