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Two thirds of businesses report non-EU trade gains, despite Brexit

New survey suggests that businesses’ global trade footprint may be key factor in ability to adapt
  • The majority of businesses trading in the EU see a reduction in trade with the continent following Brexit; however two thirds (66%) of those businesses who also traded around the world make gains outside of the EU;
  • Tariffs and recruitment reported as the biggest areas of change businesses have had to manage since leaving EU bloc;
  • Firms trading overseas are broadly supportive of UK trade negotiations and optimistic about boost to economic growth.

Although UK businesses are divided on the impact of Brexit on their international trade, they appear to be cautiously optimistic for the future, according to a new report by Deloitte.

Almost three quarters (74%) of participants whose businesses traded in Europe saw a negative impact to EU trade as a result of Brexit; however, two thirds (66%) of businesses trading in the EU and the rest of the world experienced gains in non-EU markets. Over one third (35%) of those businesses recouped their EU losses entirely and a further 31% reported regaining some of their EU trade. A similar proportion (32%) reported making no compensating gains outside of the EU, rising to 46% for small businesses specifically.

The Attitudes to Trade Survey explores UK businesses’ experiences of trading internationally since the shift from EU membership to the current FTA relationship. Conducted in association with polling group Opinium between 3 and 8 February 2023, the survey is based on responses of 750 senior decision-makers representing a range of large, medium and small-sized businesses trading in both goods and services.*

Amanda Tickel, Head of Tax and Trade Policy at Deloitte UK, said:

“Brexit remains a dividing issue for both politicians and businesses. Businesses unsurprisingly reported differing experiences since leaving the EU. For the large majority this resulted in a loss of EU trade, but many are optimistic about a bounce-back into new non-EU markets and the future of buying and selling abroad. Businesses’ global trade footprint has already been, and will continue to be, an important factor in their ability to thrive.”

Optimism for the future of trade

The results suggest that businesses are generally optimistic about the UK’s trade prospects over the next decade. Over half of businesses (51%) expect the UK’s free trade agreements (FTAs) to have a positive impact on economic growth over the next 10 years, with 21% expecting a negative impact.

All of the UK’s new FTAs secured or under negotiation were generally considered to be beneficial, with at least half of respondents anticipating agreements with Australia (52%), New Zealand (51%) and India (50%) to be positive for their business.

Businesses that only trade in services were generally less optimistic than those trading in goods, with only 35% thinking that the FTA programme will be positive for them. This is 13% lower than for businesses that trade in goods.

James Caldecourt, Head of International Trade at Deloitte UK, added:

“The survey suggests that many businesses are proving resilient in a changing trade landscape post-Brexit and are increasingly identifying value in markets outside of the EU. While they await the outcome of ongoing negotiations, businesses broadly consider the UK’s FTA programme to be beneficial not just for their own business but for the wider economy.”

Greatest areas of change and priorities for trade negotiations

When asked what the greatest areas of change have been for their businesses since leaving the EU, almost half (43%) of respondents cited tariffs and duties. Meanwhile, 22% cited the recruitment of staff.

The survey also suggested that businesses generally think the government’s priorities in trade negotiations match their own, with a gap of less than five percent in almost all cases. However there were notable exceptions. The greatest discrepancy was in the movement and recruitment of staff, which emerged as a higher priority for businesses (23% business priority vs. 14% perceived as a government priority).**

Awareness of FTAs and dialogue with government

Businesses generally showed a high level of awareness of the UK’s existing FTAs and what they contain. 74% of respondents were aware of the UK’s FTAs with Canada, 62% with Singapore, and 61% with both Japan and Mexico.

Yet the research indicates that some businesses would like to see even greater clarity in how government communicates the benefits of FTAs and gives advice on exporting. When asked how well the government has communicated the benefits of FTAs, 37% rated them as good, 33% said they were poor and 24% said they were neither good nor poor.

There does however appear to be substantive wider dialogue taking place between government and businesses. Six in ten businesses (60%) said they have engaged with government regularly on trade negotiations and a similar number (57%) have engaged with government support programmes or received advice on exporting. However, the survey found that 11% of businesses have never engaged with the government about trade negotiations.

Amanda Tickel added: “It’s positive that businesses think the UK has the right priorities in trade negotiations and are engaging with government regularly. However, there is the opportunity to do even more when communicating to smaller businesses in order to ensure all UK firms have the chance to benefit from trading overseas in the years ahead. UK businesses should also continue to actively search out opportunities to engage with policymakers and deepen their trade in global markets.”



Notes to editors

*About the research

Deloitte commissioned professional polling partner Opinium to conduct field research to gauge sentiment towards international trade policy and to identify key challenges facing UK businesses. The survey exclusively targeted senior decision-makers representing 750 businesses trading internationally in goods and services from the UK. Of these respondents, 100 were C-suite representatives of small businesses (10-49 employees); 150 respondents were board level representatives of medium-sized businesses (50-249 employees); 250 respondents were at least senior directors or decision makers at large businesses (250-999 employees); and 250 respondents were at least senior directors or decision makers at large corporates (1000+ employees).

** Businesses were asked for their top three priorities in trade negotiations. They were also asked what they perceive the government’s top three priorities to be. In almost all cases the gap between the percentage of businesses identifying a priority issue and their perception of the government’s priority issues was less than 5%.