Untapped trade potential of £41bn can offset any loss of EU exports after Brexit

William Turvill
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The UK voted to leave the European Union on 23 June 2016 (Source: Getty)

The UK has enough “untapped… trade potential” to offset possible EU export losses as a result of Brexit, a new report has found.

The UK currently under-exports to countries led by India, Canada, Israel and China, the Open Europe research found.

The think tank identified the top 10 under-performing markets for goods, and the top 10 for services, and found that they represent untapped UK export potential of more than £41bn, based on projections for 2030.

Read more: Export boom for British manufacturers as foreign orders reach six-year high

The report recommends that the UK government, after the General Election, “pursues a careful strategy of intensive engagement with under-performing countries”.

The government is also advised to not focus solely on free trade agreements (FTAs) and consider other possible arrangements, such as “bilateral investment treaties and targeted agreements to address particular trade issues”.

Open Europe also recommends that the UK should take advantage of “soft power assets”, i.e. its “deep, historic connections with many countries”.

In addition, the report suggested that the government should focus on service exports over goods.

Read more: Yet another blow for global trade policy

The UK is already a strong trading nation, but while we run a trade deficit on goods, it’s a surplus for services.

Services trade has been poorly supported by the EU, not least because of the limitations of the Single Market, and because of linguistic and legal differences.

Some services companies, for example in the insurance industry, have said that EU membership provides them with little advantage, and even that Brexit will be a positive advantage.

The Open Europe report, run in conjunction with the Prosperity UK Conference, added: “The task of the government is to seize the opportunity of Brexit to draw fully on our comparative advantages, the English language, the common law system, the status of the UK judiciary and legal system, the UK’s security, development and defence reach, our world-class universities, our innovation and science.”

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