Fresh Horizons After Brexit
It’s been a sobering few weeks, with business leaders blaming Brexit uncertainty for the slowest pace of output growth in the services sector for almost a year, while farmers are being warned that their profits could halve after the UK leaves the EU. It can sometimes seem that businesses are facing a cliff edge as they struggle to find markets in the wake of Brexit – but UK exporters have more options than they realise.
Brexit has been something of a wake-up call for UK exporters, some of whom tended to sit on their laurels in spite of being endowed with unrestricted access to a free trade zone of 500 million consumers. No matter how vertiginous our departure from the EU, Brexit will not mean the end of trade with Europe. Trade across the borders is likely to continue, albeit with some incumbrance, which is most likely to come in the form of non-tariff barriers such as additional documentation and standards.
We believe there will still be significant opportunities in key European markets such as Germany, France, Italy and Spain which have not been fully explored by UK companies, perhaps due to language barriers or a lack of strong export support in those markets. The German market in particular has been a key prize – friendly, accessible and well-disposed to quality and strong service support.
When it comes to the other regions experiencing a post-Brexit bounce, the US and Canada probably lead the table, and in the last 12 months we have supported more than 100 companies looking at opportunities in these markets and how to access them.
OCO is the exclusive partner for the UK’s Department of International Trade scheme that supports UK companies as they explore opportunities in North America and is currently adding capacity in the US and Canada to deal with demand. Further afield, we are also seeing excellent participation levels in trade missions to the Gulf and the gateway hub of Dubai in particular. Dubai is a particularly interesting avenue to explore as its hosts a number of significant international trade shows such as Arab Health and the Airshow.
Last year OCO launched an incubator in Dubai to help British companies explore the region and build out their business case in a low-cost, low-risk way, a preliminary to setting up a joint venture or free-zone establishment. Asian economies are currently going through a period of correction after a number of years of tiger growth and, with the exception of Japan and possibly Indonesia, we remain lukewarm about SE Asia and China for the time-being. These markets take a long-term commitment and deep pockets and are not for the very early stage exporter. If anything, UK companies are attractive to larger players from this region who want to rapidly establish an international base.
Latin America is also an exciting but challenging market. Brazil is the largest but also the most challenging in terms of regulation and doing business. For that reason we have chosen Bogota in Colombia as our base in Latin America – it offers a significant market of 40 million consumers in its own right and is committed to a pro-business and democratic government, while opening a gateway to the wider Andean and Caribbean markets.