With the business world continuing to adapt and flex operations against the enduring COVID-19 pandemic, Jack Simpson, North East England Chamber of Commerce global network training and network adviser, looks at how the virus has changed international trade and calls on the Government to use lessons learned from the disease to help shape future Brexit policy
It’s surreal writing this now – considering how, in the last issue of CONTACT we explored the future of trade through sustainability – just how dramatically the trading environment has changed.
But it’s good to be back, and I hope you are well reading this.
I will not dwell on the myriad of issues through COVID-19 but will instead look at the dynamic changes in international trade, and some lessons learnt to take forward.
It’s strange, the closer we have gotten to our bedrooms, the stronger our global connections have become.
The advent of Zoom has meant we can get global connections at the press of a button, with a flexible diary from the comfort of our own homes.
At the start of lockdown, the Chamber held a trio of webinars on how business can adapt to, and future hurdles of, the COVID-19 crisis, with global Chambers based in countries such as China, Hong Kong and South Korea that were weeks ahead of the UK curve.
A month later, we held another trio on COVID-19 and the future UK-EU relationship, with the Spanish Chamber, German Chamber and vice-president of BMW, as well as ex-MEP and chair of Brussels Chamber Dan Dalton.
We are currently in discussions with America, Japan, Ireland and Norway on future webinars.
A few months ago this would not have been possible, not because we didn’t have the connections, but because the logistics to get poor Steve from China to fly 18 hours or so for a morning event – more than likely in the summer rain – in the North East would be a tough sell.
But this move to digitalisation has, and will have, a continued impact.
It is a cursed romance that international trade is steeped in traditional practices; files of unending paperwork, physical stamps needed at the border, travelling long haul in the early hours for business meetings.
For better or worse, this has been dramatically turned on its head.
One thing that cannot be digitally replaced (well, not yet anyway) is the movement of goods, which has seen a dramatic decline of up to 30 per cent across the UK, this coming at a time when we are about to embark on the greatest trading change of our life, potentially in UK history.
We, or at least I, eagerly await the upcoming Export Strategy from the Government, to see the plan for a future recovery and to get more businesses trading overseas.
I have found the most resilient businesses through this pandemic have been those with various streams of income, making them less exposed to single market shocks.
The Government recently released its ‘objectives’ for the US, Australia, New Zealand and Japan trade talks, and it was
positive to see the emphasis on small and medium-sized businesses and engaging them with the opportunities of these deals.
Now, I am not sitting here, starry eyed, thinking these deals are going to create the Horn of Plenty – lockdown hasn’t sent me that crazy!
In reality, they will provide little overall benefit.
In the US objectives, they estimate 0.16 per cent growth for the UK economy.
However, freer trade is a good thing, and if we’re able to knock down a few market barriers that enable North East business to get a leg up, then all power to them.
Just make sure that change, and any opportunity, is properly communicated and promoted to the business community. This, for me, has been the key lesson for policymakers.
2020 isn’t going to get any easier to navigate, as attention turns to Brexit preparations for departure on January 1, 2021.
It sounds simple, but the Government must be honest when it comes to these changes, to give business the best chance of making a success, or just surviving, the new trading relationship with Europe.
No Deal, in any scenario, is bad.
Figures show 60 per cent of regional trade is reliant on Europe – we have received upwards of £500 million and have skills from across Europe flowing over the border, which demonstrates why the UK Treasury estimates the North East will be the hardest impacted region, with a GDP growth decline of between ten and 15 per cent.
However, it would be even worse if No Deal were announced at minutes to midnight.
Caught unprepared, UK trade would be slapped with harsh trading barriers, restricted movement of people, data and services, without any supporting apparatus to smooth this over.
Cue more emergency measures from Chancellor Rishi Sunak.
Speaking of Rishi, the Treasury played an interesting and integral role at the start of lockdown, quickly implementing new support measures and, crucially, being responsive and reactive to the business community.
The Chamber acted, and continues to act, as a voice for the regional community on COVID-19 to gain some key wins.
As we inch ever closer to the Brexit cliff-edge, communication and meaningful engagement are two valuable lessons from the ‘coronacrisis’ we must take forward as business starts to make sense of Brexit, and a new Global Britain.