The UK-EU trade matters a lot and is still a very important contributor to the economy in all parts of the UK. Today, the EU accounts for the largest single proportion of UK trade. The UK imports from and exports to the EU is about £550bn!, (44% of UK exports go to the EU) with over 200,000 UK businesses trading in goods with the EU countries. Close trading relationships exist across a range of sectors, which employ millions of people around Europe. Producers in other EU Member States also rely on UK firms in their supply chains knowing that they sell more to the UK than the UK sell to them. The top trade partner for imports in UK is Germany. After the Brexit UK SME’s will have to maximise their trade opportunities globally, both by boosting their trading relationships with old friends and new allies, while at the same time having the best possible tariff-and-barrier-free trade with the EU. The business organization CBI (Confederation of British Industry) recently said that a comprehensive customs union, after a transition period, is a ‘practical, real-world answer’ that could help resolve some of the complex issues raised by the Brexit. But in the same time the official British position on future trade talks is that the UK will be leaving both the customs union and the single market in order to create free trade deals with the rest of the world. It is still very difficult to know how the future of the EU-UK relationship will be even the UK Government is committed to secure a special partnership with the EU, including the freest trade possible. Will it be a CETA-Plus, a EEA-Minus or something in between? Macron recently said a future arrangement could fall somewhere between a Canada-style free trade agreement and a Norway-style deal with access to the single market.
There is still the question whether Britain leaves without a deal. Failure to get the right trade deals in place could probably mean higher prices, lost jobs, and companies going out of business.
It is then prudent to be prepared for every possible outcome. There are plenty of ways SMEs can be prepared until it becomes clearer what Brexit will mean for business. In general, planning ahead and effective management of finances (financial contingency plans) is always key to the success of any business. But exploring international trading options might be also beneficial for SMEs who want to expand their business. Lot of businesses should look in to expanding overseas to help their continued growth.
A clear view of the expected costs and revenues, particularly in case of looking to deal with another country will definitively help you to determine the best decision. Doing business abroad can be indeed a long way from doing business in your hometown.
Are you looking for guidance to expand your business? Just reach LYS TRADE Ltd (firstname.lastname@example.org) to set up an appointment with our representatives in Luxembourg or in London. As a Lys Trade client, you will beneficiate from the joint expertise of sales specialists and international consultants. Together we will be able to advise you about the requirements for your business start-up in Europe, in/ from Luxembourg or in UK and prevent you from making costly mistakes.
Why working with LYS TRADE Ltd?
Lys Trade is a private owned company offering independent advices. Acting skillfully between the United Kingdom and Luxembourg ideally situated in the heart of the EU is our major asset. We are a team of International Business Developers and Trade Representatives based in Luxembourg and in London having the expertise of providing valuable help the first few times you are trying to evaluate your business abroad.
Our purpose – helping SME’s create more prosperous businesses.
Philippe Johan Castelain
Managing Director@Lys Trade