As the UK economy seeks to recover from the twin disruptions of the COVID-19 pandemic and a new trading relationship with Europe – making sure that we have a robust return of UK trade flows will be a crucial element of this.
There are easy wins that the Government and Department for International Trade can secure. Ensuring that UK service providers are not ignored in trade policy is one of them.
New research from EY and the City of London Corporation, The City of London: An Ecosystem Enabling International Trade, shows that in order to help UK exporters, the Government should be looking to the UK’s financial and professional service (FPS) providers – not for the FPS exports themselves, but because of the enabling role that they play in helping companies up and down the UK and across all sectors to export their products overseas.
Our findings detail the UK’s unique and complex FPS ecosystem, including how the concentration of FPS within the Square Mile complements extensive networks and regional hubs across the UK; the increasing crossover between tech and financial services; and the benefits of this global prominence for UK trade.
Many of us find it more difficult to picture the contributions of a lawyer drafting a contract to sell a product, or a banker providing a letter of credit needed as part of the export process than to imagine the product itself crossing a border. However, without these professionals and firms providing their services then the cost, risk and feasibility of carrying out international trade would undoubtedly be higher, prohibitively so in many cases.
Trade policymaking has traditionally been approached in silos; trade agreements have heavily focused on goods with services secondary. Yet, as our findings demonstrates, that is not how firms successfully trade in practice, nor does it mirror the UK’s dominance of services exports.
As the UK sets its post-Brexit trade policy agenda, taking a holistic approach which reflects the interdependent and mutually supportive role of services and trade should enable the UK to build on its strengths, facilitate access to these enabling FPS services and maximise future opportunities.