Will Brexit Hinder Exporting?


The Channel Group is in favour of a reformed European Union removing the red tape on SME’s.

This week will see the resolution of David Cameron’s proposal to remain in the European Union, Trusk has cleared his diary and the battle lines are being drawn. The Channel Group will not comment on the merit of these changes but highlight the trade argument to remain in the evolved European Economic Area.

On the one hand 55% of British exports are traded outside the EU however Europe is cumulatively Britain’s largest trading partner accounting for 45%of exports in 2014 according to the ONS. Its trade has largely been that of goods but it has always run a trade surplus with services and British growth in Europe has been on the whole consistent at an increase of 2.5% per annum. This being said British exports have taken a knock recently dropping to and are the only G7 country to have exports fall by 1.5% between 2013 and 2014.

British exporters, according to the British Chamber of commerce in a recent survey, said that Britons were struggling to trade outside the Anglosphere and that much of the red tape in Europe is not helping SME’s to export their goods and services.

Arguably a Brexit would unlikely halt British trade with the EU but should this occur what would happen to British trade? One case study is Turkey. Dogged by the immigration crisis overstretching its resources Turkey has itself battled with onerous regulations that hamper small business growth.

Since the economic crash Turkey’s economy has dipped and been slow to recover. High tech goods have been stuck at 2% since the early 2000’s but it has remained the world’s 8th leading food producer. The economy has been more volatile in this decade compared to the last with expansion nearly halving since 2007, but around 60% of Turkish trade is with Europe accounting for nearly three quarters of its foreign investment.

Whilst Turkeys calls in the past have been aimed at joining the EU the recent turmoils on its borders have arguably stiffened the opposition to this. But from a trade perspective Turkey still maintains a strong link with Europe and in the Construction Industry in particular Turkey’s regions have seen marked development.

The cabinet meeting scheduled for the end of this week will present the British public with the choice over whether to remain apart of this supranational power. It’s not a question of sway over Europe that’s hampering British trade it’s the red tape issues that are constantly being battled against. The core of European unity has always been trade and this should be considered a priority when assessing the impact of Britain leaving the EU.

The Channel Group believes the focus of this debate should be to consider the impact upon small businesses and if the proposed reforms can help alleviate the red tape issues then Britain and the European Union can continue to be profitable partners.

The Channel Group

The Channel Group is an independent think tank established to champion free trade.

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