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APPG for Trade & Investment Summer Reception – Tuesday 9th July

The APPG for Trade & Investment hosted its Summer Reception in Parliament on the 9th of July, to celebrate its first year of work and to show its gratitude to all of its dedicated members for their support.

APPG Summer Reception 2013
APPG Summer Reception 2013

Margot James MP, Chair of the group, thanked everyone for attending and for their support in making the APPG such a success after just one year. She highlighted a few of the success of the past year; including a visit to Tech City, the group’s first regional visit to the West Midlands, undertaking research with the IoD into the barriers to exporting, and holding the APPG’s first Trade Mission to Southeast Asia in conjunction with UKTI, the UK-ASEAN Business Council, Asia House, Prudential, and Barclays.

Guests of the reception ranged from MPs and Peers to Ambassadors, trade associations, banks, and businesses of all sizes. Well over one hundred and fifty people attended the event which was held on the House of Lords Terrace overlooking the River Thames.

Lord Green of Hurstpierpoint, Minister of Trade & Investment, thanked everyone for their enthusiasm with the group, and spoke about how it is more important than ever that British business looks abroad to aid the country’s economic recovery. He also called for a greater British presence in emerging markets across the board, not only from businesses but also from the various business support agencies that operate globally.

The reception was made possible by the kind support of Prudential.

Regional Growth through Trade and Innovation

with the Rt Hon Michael Fallon MP, Minister for Business and Enterprise

Going for Growth through Trade
David Winstanley, Operations Director; Birmingham Airport
Paul Noon, West Midlands Regional Director, UKTI
Steve Brittan, President of the Birmingham Chamber of Commerce
Phill Potter, West Midlands Export Finance Adviser, UK Export Finance
Ian Fletcher, International Trade Director, NatWest

Supporting Manufacturing Innovation
Stewart Towe, Chairman of Hadley Industries and Chair of the Black Country LEP
Andrew Churchill, MD of JJ Churchill
Michael Fallon, Minister for Business and Enterprise

David Winstanley, Operations Director of Birmingham Airport welcomed the APPG for Trade & Investment to Birmingham and thanked everyone for making the effort to attend. He began by underlining the failure of Britain’s national aviation strategy, suggesting that no SME would operate with a strategy that had a single point of failure and was susceptible to time constraints, and yet this is how UK aviation works. Birmingham Airport’s submission to the Davies Commission stated that instead of relying on an overburdened Heathrow, a network of regional hubs should be developed, with modern rail and motorway infrastructure to support them. He concluded that whilst physical connectivity is important, connectivity of ideas and ingenuity is just as important, and this synergy is starting to pervade the West Midlands; the UK’s transport strategy must reinforce this.

Paul Noon, West Midlands Regional Director for UKTI spoke on the role that the organisation plays in the West Midlands and what its aims in the region are. UKTI want to see exports from the area doubled by 2020, and whilst there has been a 6 % growth so far, this will need to double to reach the target. Paul went on to set out UKTI’s organisation in the West Midlands which include 40 international trade advisors whose role is to discuss with companies their aims and provide tailored advice on the best methods and markets for their products. There is also an Advanced Routes to Market Team based in Coventry who can assist businesses looking at alternative routes into a new market, for example, through franchises.

Steve Brittan, President of the Birmingham Chambers of Commerce and Managing Director of BSA Machine Tools Ltd presented his views on the future of manufacturing and Heathrow. His company BSA Machine Tools has customers in China, Pakistan, Central America, Canada, Mexico, USA, and various other counties, and yet conspicuously few in Europe. Since the credit crisis, confidence has still yet to return to the Continent and there are greater rewards to be won in markets further afield. As a country with advanced engineering skills, Steve doesn’t see any future for Britain producing “nuts and bolts” which can be made abroad cheaper. Instead, we must focus on moving up the technology curve and exploiting the expertise and engineering skills that Britain has been able to hold onto. He concluded by suggesting that Heathrow developed as a hub in the past because of the range of planes. Now that aerospace technology has developed, there is no reason that Birmingham or Manchester can’t service the same airports that Heathrow used to dominate.

Phil Potter, West Midlands Export Finance Adviser with UKEF gave a brief outline of his position and his organisation, leaving the discussion of trade finance to Ian Fletcher. He highlighted that UKEF faces the same marketing difficulties as UKTI, but with radically less staff.

Ian Fletcher, International Trade Director for NatWest described his role as identifying risks and finding funding solutions for businesses looking to export. NatWest recognises that first-time exporters’ main concerns are how to break into a new market and how to finance these opportunities. Whilst UKTI helps with the former, solutions to the latter can come in many forms, including the Letter of Credit Guarantee Scheme, the Bond Support Scheme, and the Export Working Capital Scheme, all of which Ian explained in detail with illustrative case studies. Collaboration between UKEF and banks like NatWest mean that the whole spectrum of export finance can be supported, even when product insurance premiums are too high for the private sector.

Stewart Towe, Chairman of Hadley Industries and Chair of the Black Country LEP started the second panel on Innovative Manufacturing by discussing the role of the LEP. The main aim of the Black Country LEP currently is to get the 10% of businesses that it has engaged with to publicise its work and strengths to the 90% who aren’t aware of it. With regard to innovative manufacture, he cited the examples of the West Midlands new unique forge simulators, 3D printers and the world’s largest friction welding machine, all showing the region’s opportunity in high technology. He concluded by discussing innovative ways that the Regional Growth Fund could be used to encourage SMEs to get more involved in the greater business community, for example, suggesting that companies receiving a grant must commit to a 5 hours/week student placement to help spark an interest in the manufacturing sector in students from a younger age.

Andrew Churchill, MD of the third generation engineering company JJ Churchill Ltd opened his talk by proclaiming himself a great advocate of UKTI having received its help with entering Mexico. He explained that whilst manufacturing has been a ‘pariah’ for the past 5 years, this has been turned around both by industrial success and a supportive Government, and that manufacturing companies should capitalise on this mood. He clarified why the Government needs to set out a clear long-term industrial strategy which looks beyond the current Parliamentary term, in the same way that companies must. Issues such as access to finance, skills, greater industry collaboration, and widening the Science Budget ring fence to foster commercialisation of our universities’ ideas were all raised as areas for future action.

The keynote speech was delivered by Michael Fallon MP, Minister for Business. He began by outlining the difficulty that manufacturers in the UK have faced in the past, including an overdependence on European markets, a lack of access to finance, and oppressive amounts of red tape from the EU. The country has overcome these difficulties by becoming a world-leader in aerospace and automotive technologies and developing a range of new and innovative ideas from its universities. The West Midlands in particular has led these efforts, last year representing 7% of the UK’s Gross Value Added. To ensure the economy remains balanced, the Minister went on to discuss how the Government is acting to ensure the recovery is sustainable; Corporation Tax has been made more competitive, supply chains across the nation will be strengthened, and SME growth will be supported. He concluded that he wanted to see more self employed individuals taking the big leap to employ their first member of staff, which he believed they will in a sustainable, rebalanced economy.

Margot James & Nick de Bois MP: Why exporting is good for Britain

Now has never been a better time for businesses to get exporting, with the economy on the up-swing and business confidence on the rise.

Politicians are unanimous on the need for businesses to be ambitious and think international for growth. Tory MP Adam Afriyie wrote for us that it can be a risky business but the potential rewards could help secure the UK’s “political and economic future”.

In keeping with the export theme, we asked two MPs to write for LondonlovesBusiness.com who are passionate about trade and exports. Both are London MPs and former businesspeople.

Read on for what they have to say.

Margot James MP
Margot James is MP for Stourbridge, aide to trade minister Lord Green and chair of the All Party Parliamentary Group (APPG) for Trade and Investment.

I set my own business up and ran it for fifteen years before selling it to WPP in 1999. After I sold it and completed the standard ‘earn out’ phase WPP offered me the opportunity to head up their network of specialist healthcare communications consultancies across Europe.

The network had sales of approximately 50 million Euros and we were represented in 14 countries. This was my first consistent experience of international business and I found it very absorbing. The network allowed us to win more global business from pharmaceutical companies in the US and Japan as well as those companies headquartered in Europe.

It stands to reason that if you think of your market as extending well beyond this country, you can build a much bigger business than you can by sticking to the home market. Too many SMEs do just that in the UK. Only 20% of our SMEs export compared to an average of 25% (and more in Germany) across Europe.

The All Party Parliamentary Group on Trade & Investment, which I chair, commissioned the Institute of Directors to undertake research in to attitudes to exporting among SMEs. The research found that although 82% of exporters sell to fellow member states of the European Union, business there had declined by about 10% since the start of the crisis in the Eurozone.

Forty seven percent of respondents told the IOD that the area they expected the biggest increase in sales from this year was Asia. So the APPG organised a trade mission to Singapore and Indonesia in March of this year. We took companies from two sectors with us; firms engaged in the creative aspects of infrastructure and educational institutions.

We discovered a huge opportunity for Britain to export educational services throughout the ASEAN region. We met the Indonesian trade minister, Gita Wirjawan, who summed up his country’s need for education with the words “we don’t want our kids to be selling coal and palm oil”

More than half of Indonesia’s population is under the age of thirty. They are hungry to learn but, according to Balfour Beattie who we visited in Jakarta, are largely unskilled. There is a need for government, the private sector and foreign providers to invest heavily in new standards and vocational learning for those sectors that have been identified as having high growth potential. For example infrastructure, oil and gas, and ICT. Britain is recognised as a world leader in education and should benefit from the undoubted need for more vocational as well as higher education.

The new and booming middle class in Asia also provide a huge opportunity for luxury goods and services. Although manufactured goods will remain crucial, the market for legal, financial and property services is growing rapidly and these sectors are areas in which London has a significant comparative advantage.

Mr Wirjawan also said that “the Japanese and the South Koreans are successful in Indonesia because they come and set up shop here.” That is just what Prudential did a few decades ago and their office in Jakarta has just closed a record year of growth in the insurance premium market. The proportion of profits likely to be returned to the city of London from the Pru’s Indonesian office is valued at £120m this year.

I came away from Indonesia and Singapore thinking that if I had my time in business over again, I would make sure I had operations in those markets capable of leveraging the immense opportunity that exists there.

The main reason I would have the confidence to do that is the excellent support provided by UKTI. The passport to export programme would be my starting point, that you can do right here in London and it gives you the nuts and bolts of selling abroad. Once you have completed this stage UKTI will provide your business with one Overseas Market Introduction Service free of charge (you can purchase more of these if you wish to look at different markets). You are then ready to get the help UKTI and the British Chambers of Commerce abroad in your priority markets.

When I was in business it never occurred to me that the Government might actually be able to help. Well, things have changed, because through UKTI and the Foreign Office there is certainly a great deal of help for the first time exporter in 2013.

Nick de Bois MP
Conservative Nick de Bois is deputy chair of All Party Parliamentary Group (APPG) for Trade and Investment, and MP for Enfield North.

If you are working in or running one of London’s reported 805,085 SME companies, I want to share something with you: the future of the UK economy lies with you.

There, simple – that’s the economy’s problems solved. We can all look forward to years of sustainable growth as part of a balanced economy now that you know that!

Well, fair enough – that’s a touch flippant, but I suspect when you have found time to read or listen to the news you will have seen many commentators express a similar view: that SMEs are best placed to drive recovery in the UK via an expansion of export markets.

Those commentators are right, the opportunities for SMEs to get involved with exporting are tantalising for all entrepreneurs and rewarding for the wider UK economy. That’s why the Government’s policies are focused on helping break down the barriers to exporting and promoting opportunities.

While the potential in this field has been widely recognised, the UK still has much to do and the backdrop of weak economic growth creates a new sense of urgency.

We are well below many of our European partners in the share of SME exporting companies; and yet research continually highlights the extra potential available for SME exports to stimulate growth and how it can strengthen your business.

In 2012, multiple reports called on UK businesses to exploit the country’s strong brand and world class reputation to export to businesses and consumers around the globe. I have visited trade shows and joined delegations and witnessed this salesmanship myself.

Not to mention the 25 years I spent building and running my own company in the events industry before entering Parliament.

When I first entered the export market, it was in response to the first export order which had been placed with the company, not because we were looking for it, it came to us. Until then, I had made the mistake of assuming the barriers to exporting were too daunting and that my efforts were better off back in the UK in a more familiar, but ultimately saturated domestic market.

When I eventually took the plunge on the back of my first overseas order, there was little help and advice around from the government. Whilst that is certainly not the situation today, the challenges exporters face remain much the same as they did then. The barriers to export vary from region to region, including worries over how to develop contracts, difficulties in arranging local banking needs and possible customs and bureaucratic delays in addition to potential language issues.

As someone who remains deeply sceptical of Government departments’ effectiveness, I was dubious as to what the BIS (Business Innovation and Skills) department could do to help new and existing exporters. The unit responsible for this within BIS is the UKTI (United Kingdom Trade & Investment division). In my day, its equivalent body underperformed and under achieved but things have improved since 1990. And so they should have.

Because the UK Government is seeking to drive up SME exports they have increased availability of export finance and also provided additional funding for UKTI. At the same time, the Foreign and Commonwealth Office has a stated aim of improving “commercial diplomacy and economic expertise” which will expand the UK’s reach and resources in some of the fastest growing regions around the world.

So if you are one of the 50% of Londoners who work in or run an SME the multiple export opportunities are there and may suit your business; the support and advice is available if you want it.

It could be good for you, and good for Britain.

London Loves Business

 

Santander Breakthrough Reception – Monday 13th May

The APPG for Trade & Investment hosted a reception in Parliament with Santander to celebrate the achievements of their Breakthrough programme for exporters. Breakthrough is a growth-capital fund and development programme for fast-growth SMEs in the UK. It was established in December 2011 to address a funding gap in the market for SMEs that were growing quickly.

Also speaking at the event was Ana Botin, CEO of Santander, and Andy Hill from I Like Music, a SME which has received support from the Breakthrough programme

Margot said: “I was delighted to host a reception in Parliament, on behalf of the APPG for Trade & Investment, to celebrate the good work being done through the Breakthrough programme. So much of the APPG’s work is focused on reaching out to SMEs and supporting them in their efforts to export and grow, a goal that we share with the Breakthrough programme. It is great to see the extent to which Santander have been able to transform the prospects of the businesses involved with the scheme, and give them the tools to grow.”

New export report: As Europe stagnates, British companies look to emerging markets for growth

Asia has over-taken the European Union as the market in which exporters expect to see the most growth over the next five years, new research from the Institute of Directors (IoD) and the All Party Parliamentary Group on Trade and Investment reveals. The report, to be launched today (Tuesday, 18:00) in the Houses of Parliament, also shows that Asia has moved ahead of North America as a destination for UK exports.

The report presents the findings of a Policy Voice poll of 1,162 IoD members which ran from Wednesday 14th November until Friday 23rd November 2012.

Key Findings

EU is still the top destination for exports…

The European Union remains the market in which most IoD members are active. However, the percentage of IoD members trading in the EU is falling (from 84% to 82% between 2010 and 2012), whereas the percentage in Asia is on the rise (from 39% to 47%). The EU was the only market to see a decrease in activity, with strong growth in the Middle East in particular (38% in 2010 to 44% in 2012). For the first time, IoD members are more likely to trade in emerging Asian markets than with the mature markets of North America (47% to 46%).

…but businesses expect faster growth elsewhere

Asked which markets they expected to deliver export growth over the next five years, Asia came out top, with 50% of IoD exporters optimistic about their prospects there. Compared with two years ago, members are far more pessimistic about future trade with Europe. Only 43% anticipate their export activity to grow in the EU over the next five years, a fall from 58% in 2010.

Exporting remains difficult for small businesses

In order to reduce our trade deficit, more businesses must be encouraged to export. The survey reveals that 57% of IoD members export, considerably higher than the national figure of 31%, indicating that there is scope for more UK companies to begin exporting. Half of members gain less than a third of their turnover from exports, showing that there is also significant potential for expansion by existing exporters.

However, the risks associated with exporting still put off small companies. 35% of businesses said their organisation was just too small to export. Worryingly, 72% of companies which had never exported said they had no plans to do so.

Commenting on the research, Alexander Ehmann, Head of Enterprise Policy at the IoD and author of the report, said:
“Given the on-going troubles in Europe, it is perhaps not surprising that exporters are looking to emerging markets for growth. Expansion into new markets is critical if the UK is to address its truly alarming trade deficit. Policy-making should focus first on encouraging those firms for which export activity is only a small part of their business to expand to greater levels.”

Margot James MP, Chair of the APPG on Trade and Investment, said:
“I’m delighted that the APPG and the IoD are able to contribute to the debate around Britain’s international trade activity and pleased by the positive conclusions in this report. Growing exports is fundamental to the success of the government strategy of re-balancing the economy, and it is our job to help remove the barriers facing exporters whilst also working to encourage more of our world class British businesses to take their products and services abroad.”

Click here to download a copy of the report.

Links:
| Association of International Accountants (AIA) Chief Executive Blog

APPG Trade Mission finds British Firms set to capture growth opportunities in Southeast Asia

APPG mission in front of the Ambassador’s Residence in Singapore, joined by the Ambassador’s youngest son, and ace footballer, Hamish Phillipson

The All Party Parliamentary Group (APPG) on Trade & Investment returned today from a four day trade mission to Singapore and Indonesia.

Six Members of Parliament, Alok Sharma MP, Iain Wright MP, Chris Kelly MP, John Spellar MP and Brian Donohoe MP were led by committee chair Margot James MP, and accompanied by twelve representatives of the infrastructure, architecture and educational sectors.

One educational body closed a deal with Singaporean investors during the visit. Two other representatives of the business and educational elements of the mission stayed on an extra day to attend meetings with potential customers for infrastructure improvements, bridge building and vocational training in Indonesia.

Singapore is the UK’s largest trading partner in Southeast Asia. The UK is the 4th largest foreign investor in Singapore and the 7th largest in Indonesia. The UK represents almost three-quarters of all Singaporean investments into the European Union. But the UK is down at 20th place in the global league table of exporters to Indonesia.

Britain is well placed in Southeast Asia but could do considerably better than she has to date. Margot James said:
“Over the last half century Britain has been too inclined to depend on a growing domestic and European market and to fall back on Commonwealth links and other natural advantages we enjoy; without pushing hard enough for new business in new markets. A tendency to complacency and a misplaced assumption of superiority was too common for too long after the end of the colonial era. Meanwhile countries like Germany, Japan, France and the US were very organised and focussed on building markets; putting in the time it takes to build relationships in growing markets that can take years to pay off. But there are some outstanding exceptions to this phenomenon and the APPG visited five great British success stories on the visit: GSK and Rolls Royce in Singapore and Prudential, Balfour Beattie and Jardine owned businesses in Indonesia; there is no doubt the tide is turning”.

Members of the mission were amazed by the impact of British architecture in the region. Hundreds of thousands of tourists visit the award winning ‘Gardens by the Bay’ in Singapore and the World Trade Center ll sets a new standard for green skyscrapers in Jakarta.

Members of the trade mission were extremely well received by all the representatives of government, business, public bodies and education who took time to host meetings and visits. There is no doubt that more companies are taking advantage of the excellent service provided to new and would be British exporters by UKTI, Embassy staff and the Singaporean and Indonesian British Chambers of Commerce.

Key learnings from the mission included:

  • A huge opportunity for Britain to export educational services throughout ASEAN. Singapore is particularly keen on having a British University set up a school of business and management.
  • “We don’t want our kids to be selling coal and palm oil” the Indonesian Trade Minister, H.E. Bapak Gita Wirjawan told members of the mission. The constitution of Indonesia mandates that 20% of public expenditure must go on education and the country will need millions more bachelors and hundreds of thousands more PHDs and Masters during the next decade.
  • More than 50% of Indonesia’s population is under the age of thirty. They are hungry to learn but, according to Balfour Beattie, largely unskilled. There is a need for government, the private sector and foreign providers to invest heavily in new standards and vocational learning for those sectors that have been identified as having high growth potential. For example infrastructure, oil and gas, and ICT. Britain is recognised as a world leader in education and should benefit from the undoubted need for more vocational as well as higher education.
  • The new and booming middle class in Indonesia, and throughout ASEAN, provide a huge opportunity for luxury goods and services. Although manufactured goods will remain crucial the market for legal, financial and property services is growing rapidly and these sectors are areas in which Britain has a significant comparative advantage. Prudential in Jakarta has just closed a record year of growth in the insurance premium market; the proportion of profits likely to be returned to the UK is valued at £120m.

The trade minister also said that “the Japanese and the South Koreans are successful in Indonesia because they come and set up shop here.” Members of the mission were left in no doubt, as they networked at Embassy and Chamber of Commerce events in both markets, that more resource and better organisation is now becoming available to British companies wanting to participate in the huge growth opportunities in ASEAN.

Singapore and Indonesia are two out of twenty pilot markets for the new business organisation and UKTI joint venture. The majority of the participating business organisations will be overseas British Chambers of Commerce. New money is being invested in joint UKTI and Chamber ventures in the twenty pilot markets identified for this new approach that will arm new exporters with the contacts, relationships and market knowledge they need to invest and profit from the huge opportunities to be found in Singapore, Indonesia and many other parts of ASEAN.

LINKS:
| Singapore’s ChannelNewsAsia Singapore Business News
| Financial Director, Indonesia: An Asian showcase for UK business

| More photos on Flickr

| Margot James MP: Why the Next Eleven group of countries offer exporting wins for Britain, ConservativeHome

APPG Trade Mission finds British Firms set to capture growth opportunities in Southeast Asia

The All Party Parliamentary Group (APPG) on Trade & Investment returned today from a four day trade mission to Singapore and Indonesia.

Six Members of Parliament, Alok Sharma MP, Iain Wright MP, Chris Kelly MP, John Spellar MP and Brian Donohoe MP were led by committee chair Margot James MP, and accompanied by twelve representatives of the infrastructure, architecture and educational sectors.

One educational body closed a deal with Singaporean investors during the visit. Two other representatives of the business and educational elements of the mission stayed on an extra day to attend meetings with potential customers for infrastructure improvements, bridge building and vocational training in Indonesia.

Singapore is the UK’s largest trading partner in Southeast Asia. The UK is the 4th largest foreign investor in Singapore and the 7th largest in Indonesia. The UK represents almost three-quarters of all Singaporean investments into the European Union. But the UK is down at 20th place in the global league table of exporters to Indonesia.

Britain is well placed in Southeast Asia but could do considerably better than she has to date. Margot James said:
“Over the last half century Britain has been too inclined to depend on a growing domestic and European market and to fall back on Commonwealth links and other natural advantages we enjoy; without pushing hard enough for new business in new markets. A tendency to complacency and a misplaced assumption of superiority was too common for too long after the end of the colonial era. Meanwhile countries like Germany, Japan, France and the US were very organised and focussed on building markets; putting in the time it takes to build relationships in growing markets that can take years to pay off. But there are some outstanding exceptions to this phenomenon and the APPG visited five great British success stories on the visit: GSK and Rolls Royce in Singapore and Prudential, Balfour Beattie and Jardine owned businesses in Indonesia; there is no doubt the tide is turning”.

Members of the mission were amazed by the impact of British architecture in the region. Hundreds of thousands of tourists visit the award winning ‘Gardens by the Bay’ in Singapore and the World Trade Center ll sets a new standard for green skyscrapers in Jakarta.

Members of the trade mission were extremely well received by all the representatives of government, business, public bodies and education who took time to host meetings and visits. There is no doubt that more companies are taking advantage of the excellent service provided to new and would be British exporters by UKTI, Embassy staff and the Singaporean and Indonesian British Chambers of Commerce.

Key learnings from the mission included:

  • A huge opportunity for Britain to export educational services throughout ASEAN. Singapore is particularly keen on having a British University set up a school of business and management.
  • “We don’t want our kids to be selling coal and palm oil” the Indonesian Trade Minister, H.E. Bapak Gita Wirjawan told members of the mission. The constitution of Indonesia mandates that 20% of public expenditure must go on education and the country will need millions more bachelors and hundreds of thousands more PHDs and Masters during the next decade.
  • More than 50% of Indonesia’s population is under the age of thirty. They are hungry to learn but, according to Balfour Beattie, largely unskilled. There is a need for government, the private sector and foreign providers to invest heavily in new standards and vocational learning for those sectors that have been identified as having high growth potential. For example infrastructure, oil and gas, and ICT. Britain is recognised as a world leader in education and should benefit from the undoubted need for more vocational as well as higher education.
  • The new and booming middle class in Indonesia, and throughout ASEAN, provide a huge opportunity for luxury goods and services. Although manufactured goods will remain crucial the market for legal, financial and property services is growing rapidly and these sectors are areas in which Britain has a significant comparative advantage. Prudential in Jakarta has just closed a record year of growth in the insurance premium market; the proportion of profits likely to be returned to the UK is valued at £120m.

The trade minister also said that “the Japanese and the South Koreans are successful in Indonesia because they come and set up shop here.” Members of the mission were left in no doubt, as they networked at Embassy and Chamber of Commerce events in both markets, that more resource and better organisation is now becoming available to British companies wanting to participate in the huge growth opportunities in ASEAN.

Singapore and Indonesia are two out of twenty pilot markets for the new business organisation and UKTI joint venture. The majority of the participating business organisations will be overseas British Chambers of Commerce. New money is being invested in joint UKTI and Chamber ventures in the twenty pilot markets identified for this new approach that will arm new exporters with the contacts, relationships and market knowledge they need to invest and profit from the huge opportunities to be found in Singapore, Indonesia and many other parts of ASEAN.

LINKS:
| Singapore’s ChannelNewsAsia Singapore Business News
| Financial Director, Indonesia: An Asian showcase for UK business

| More photos on Flickr

| Margot James MP: Why the Next Eleven group of countries offer exporting wins for Britain, ConservativeHome

The UK and the Single Market

Speakers

Lord Green, Minister of State for Trade and Investment
Juergen Maier, Siemens UK

Chaired by Margot James MP

margot_james
Margot James MP
lord_green
Lord Green

Lord Green spoke firstly of the need for a wider appreciation of the importance of trade and investment to the UK economy. Suggesting that the old growth model – fuelled by consumer debt and consumption – is bust, the Minister pointed to the need to address the increasingly large trade deficit that the UK has been running, excepting a few years, since the 1960s. More widely, Lord Green stated that not only is trade good for UK Plc in general terms but noted that it has been demonstrably proven that those firms engaged in international trade are more efficient and productive than those that are not. Bringing more British companies into the export environment is therefore not only a way of balancing the trade deficit but serves to strengthen the backbone of the British economy in more general terms.

UKTI’s priority is, and remains, accessing more effectively the emerging markets – the BRICS and the N-11 being the most obvious, but Lord Green drew attention to the predominance of African countries on any list of the world’s fastest growing economies. The fact remains, however, that approximately half of the UK’s trade is with the EU Single Market, a market which remains affluent despite stagnant current growth and represents the world’s largest trading bloc.

There are two particular issues that arise as a result of the UK’s membership of the European Union when it comes to trade.

1)     The EU has exclusive competence to negotiate trade deals on behalf of the UK and other members of the EU. Generally, Lord Green feels that the EU’s Trade Commissioner and the EC more widely on this front are doing a good job representing Britain’s interests. Recent agreements with Korea, and free trade agreements in the pipeline with Japan and the US, are testament to this.

2)     The Single Market has, in the 20 years since implementation, been of benefit to the UK. Substantial progress has been made towards a free market – particularly in the area of goods. Lord Green cited the example of the car industry, which allows UK companies to export cars to anywhere in the EU without a single modification. However, in services (particularly digital services) the glass remains less than half-full, which is of considerable importance when the majority of EU GDP (70%) and UK GDP (80%) is derived from services activity. Estimates of the economic benefit of completing the single market in services, which Lord Green feels to probably underestimate the benefits, range from 2 – 4% of GDP.

Bill Cash MP, Chair of the House of Commons EU Scrutiny Committee and co-author of a recent report on the single market, argued from the floor that there were four main faults with the single market as it currently stands.

1)     The £47bn trade deficit the UK has with the EU;

2)     Qualified majority voting, which can allow the UK to be isolated on trade agreements;

3)     “Exclusive competence” for negotiations towards trade agreements with external partners; and

4)     Over-regulation as a result of harmonisation – which Peter Mandelson in 2004 suggested costs the economy to the tune of 4% of GDP.

Lord Green noted the important work of the EU Scrutiny Committee in both Houses, but said he was not of the school that suggests Britain would have a better position negotiating free trade agreements and the like as an individual nation, rather than within the collective bloc of the EU, and reiterated his support for the efforts of the Trade Commission.

He did however suggest that David Cameron’s EU speech and the potential 2017 referendum will encourage some useful discussions about the shape of the EU. Speaking as a Europhile, Lord Green believes the EU has become dysfunctional and now is a good time to take a look at the governance structures and the regulatory burden, and to ensure that the EU looks outward to external partners as well as ensuring the continuing health of the interior. On the subject of services, it would be a good first step for the EU to look towards mutual recognition of professional qualifications.

Lord Green: UK Single Market Centre handout

juergen_maier
Juergen Maier

Juergen Maier spoke from the perspective of a foreign direct investor in the UK, employing 13,500 people, in the manufacturing and technology sector. Siemens are here for three main reasons:

1)     Confidence in the long-term strategies of the UK Government;

2)     The skills base in the UK; and

3)     Strengths of innovation and research & development.

Mr Maier suggested that in particular there are certain gambles Siemens are making – especially on wind farms, in which they are still not convinced that the UK will push ahead as expected. He would like an industrial policy that focuses the Government support on the current and potential growth sectors.

On the subject of the single market, Mr Maier suggested that a withdrawal from the EU would be damaging to the prospect of future investment from Siemens and similar firms. The UK’s leads in the areas mentioned by Juergen Maier are not necessarily strong enough to compensate for the loss of access to the single market – Siemens are an exporter from the UK, as well as an investor. Mr Maier believes that the belief the UK could negotiate free trade agreements and so forth with the EU and others as quickly as necessary after withdrawal, as a small island off the coast of Europe, is naïve.

Mr Maier also agreed with Lord Green that more needs to be done to ensure that the banking sector is open to competition and more in tune, at the high street level, with the needs and ambitions of small and medium enterprises.

On the subject of employment law, which Andrea Leadsom MP believed to be a significant negative consideration with regards the UK’s relationship with Europe, Mr Maier believes that it is better to attempt to change employment law regulation from the inside, rather than throwing rocks from the outside.

Mr Maier responded to a question about the single currency’s troubles by suggesting he believed that the European Union would make the Euro work. The timing isn’t right for the UK, but he also stated that the UK shouldn’t completely write off the possibility of joining in the future.

To extend the UK’s lead in innovation and research, Mr Maier suggested to some agreement that investment was needed to bring together universities, large multinational corporations and SMEs into technology hubs, allowing for the development and commercialisation of the products of R&D. In order to do this, of course, Britain needs engineers; whilst not a problem for Siemens, who as a large firm can pick up graduates and apprentices due to their corporate cachet, the lack of engineers and innovators coming through the skills system has to be concerning for smaller engineering firms, which feeds through the supply chain and a smaller customer base to the larger employers as well.

The Chair wished to thank Members of Parliament who attended and asked questions of the speakers, and the speakers themselves, for what was a very interesting and useful discussion.

APPG for Trade and Investment, 13th February 2013 – Minutes