Business groups have stressed the importance of continued frictionless trade with the EU after Dominic Raab used his first overseas trip as foreign secretary to urge UK firms to “raise their game” and focus more on exporting to other regions.
Organisations including the CBI and Make UK, which represents the manufacturing sector, said that while British companies had already expanded to countries across the globe, exports to the EU accounted for almost half of the total.
Raab is due to join a meeting of the Association of Southeast Asian Nations (Asean) in Bangkok on Wednesday to push for closer trade links with the 10-member bloc.
In comments released in advance, he said UK companies were not being sufficiently ambitious in targeting non-European markets: “For too long, our trade focus has been on Europe. We need to expand our horizons, and raise our game.
“That means grasping the enormous global opportunities for the UK – and my first trip as foreign secretary will look to strengthen our friendships across Asia.”
While Asean – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam – has a combined population of 650 million, its bilateral trade with the EU is worth £36bn a year, just over 5% of the value of UK-EU commerce.
A CBI spokesman said post-Brexit it was vital that the UK seized “the many opportunities in rapidly growing markets across the globe”.
He continued: “We cannot forget, however, that the European Union is our closest trading partner, with 45% of UK exports heading to the continent. The absolute top priority for firms is to secure a good trade deal with the EU, with frictionless trade for goods and ambitious access for our world-beating services sector.”
Ben Fletcher, head of policy for Make UK, said: “From a manufacturing perspective, about half our exports go to the EU, but that’s in keeping with pretty much every major economy – you trade in majority terms with your nearest neighbours.”
Fletcher said about 20% of UK exports went to the US, with almost as much again going to other major economies with free-trade agreements with EU such as Japan and South Korea.
“If you add those together, you’re already talking about 35% or 36% of all your exports, which isn’t so far from the 45% or 46% with the EU. We trade globally already, and there isn’t a country in the world where British manufacturing isn’t exporting to.
“We get help from the government on expanding exports, but in some cases even more intelligence from the Foreign Office about big projects or new markets would be incredibly useful.”
Martin McTague, head of policy for the Federation of Small Businesses, said it was necessary to increase exports to south-east Asia.
“However, it’s crucial we have an orderly exit from the European Union which is the number one priority market for our members as well as replicating the 30 overseas trade agreements that are currently in place,” he said.
“At the moment, 92% of small business exporters do so with the EU, compared to just 25% in south-east Asia. It’s important not to fall into binary thinking.”
