The coronavirus pandemic has, and continues to affect businesses in all sectors from hospitality to entertainment.
While Brexit undoubtedly poses new challenges to UK businesses used to importing and exporting large volumes of products to and from the EU, are there are also opportunities to be found?
UK trade with EU plunges almost 25% and China replaces Germany as UK’s top import marketLet's first look at how the UK is adjusting to a post-Brexit world.
Official figures from the Office for National Statistics (ONS) have shown that trade between the UK and EU has plummeted almost a quarter since the start of 2021.
These same figures reveal that Germany, for the first time since 2001, is no longer the UK’s largest import market, with imports having steadily declined since April 2019, coinciding with the UK’s initial divorce date with the EU.
Replacing Germany as the UK’s single largest import market is China with goods imported from the country increasing by 66% over the past three years to £16.9bn at the start of 2021.
This underscores just how colossal an impact Brexit has had on the UK’s trade relationships and the challenges facing UK businesses, as traditional trade lines are redrawn.
New markets open up new opportunitiesBrexit may have complicated trade with the EU, but the UK is hard at work, forming new trade agreements and strengthening economic ties with other markets as Boris Johnson seeks to make up the plunge in exports to the EU.
The UK has already signed trade deals with Canada and Japan and recently offered trade deal terms to Australia, while also making formal preparation for a free-trade agreement with India.
Other than this we can expect the UK government to push hard to secure free trade deals with the US and New Zealand as soon as possible.
While some of these deals may be some way off yet, UK businesses should use the time to evaluate the feasibility of importing and exporting products with these countries under a free-trade agreement.
While they are not all guaranteed to become profitable endeavours, by preparing ahead of time businesses will be best positioned to hit the ground running and take advantage of any opportunities that maybe presented by a new trade relationship with the UK.
Going green to seize new opportunitiesWith climate change and its negative impact on the planet now being widely accepted and world leaders setting increasingly ambitious targets to reduce emissions, demand for green solutions and low-carbon products are set to soar over the next decade.
A new report from the Confederation of British Industry (CBI), titled ‘Seize the Moment’ views the transition to a decarbonised economy as providing a major opportunity for UK businesses to become global leaders in the export of green technology and services.
The report reads:
‘As one of the first major economies to announce a net-zero target, […] the UK has a genuine chance of being a world leader in areas like carbon capture and offshore wind, as well as a significant player in electric vehicles. We have a real opportunity to become a significant exporter of new green products and services.’
Businesses involved in the production of green products which can help countries to meet their decarbonisation goals, or have invested in technology to ultimately lower the carbon footprint of their products are likely to become the UK’s export champions over the next decade.
Ultimately it’s clear that the initial opportunities presented by Brexit are few and far between, particularly at a time when a global pandemic has upended the economy, however we can look towards a brighter future.
Businesses with the ability to plan ahead, adapt to new trade solutions and flex to meet new, greener market demands will have the best vantage point to capitalise on the opportunities that may arise from Brexit and the recovering global economy.
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