Exporters look beyond Europe

Exporters look beyond Europe

New figures show a major shift in British export trends with Europe no longer the dominant force.

For the first time since the Union Jack was raised in Brussels in 1973 to mark the UK’s entry onto the Common Market, Europe is no longer the dominant exports destination for British firms.

New figures show that more than half (51%) of exports from the UK in the three months to May were delivered to non-EU territories – representing a 13.2% year-on-year increase.

The Office of National Statistics figures show a 7.2% decrease in exports to the EU, with exports to both Germany and the Netherlands falling by £0.8bn on the previous quarter.

Year-on-year comparisons reveal a starker fall in Europe-bound goods, with Italy registering close to a 20% plunge in UK imports. Exports to Portugal, meanwhile, fell by 14.5%. The total volume of exports rose by 6.6% in the period and the UK is now, says the ONS, well on track to a balance of payment surplus by 2015.

Think tank, the Centre for Economic and Business Research, said the figures were in line with long term predictions of surging export levels to non-EU countries.

“Over a 5 year period export growth of 30% to Asia, over 40% to Latin America and over 60% to Africa are predicted,” said the organisation’s Scott Corfe.

He added: “The good news for the UK is that the increasing exposure of our exports to the fast growing economies is likely over time to transform the UK balance of payments.

"Also imports are likely to be restrained by the ongoing squeeze on disposable incomes. Our next forecasts, out later this week are likely to predict a balance of payments current account surplus in 2015 – the first since 1997.

“Of course, this does not in itself make a case for getting out of the EU. The cases for and against are much the same with the EU receiving 49% of UK exports of goods as they were when it received 51%.

“Whether the UK should leave the EU or not will be determined in my view by the extent to which the EU in the face of the readjustments caused by globalisation and the euro crisis decides to turn inwards. That battle has yet to be fought, though there are worrying signs that the EU will turn inwards in a way that makes it impossible for the UK to remain in membership.”

David Kern, chief economist at the British Chambers of Commerce, responded to the figures saying: “This shows that exporters are adjusting to global reality, as growth in the eurozone will continue to stagnate, and the main opportunities for our exporters will remain outside Europe.”

His comments come as the lobbyist group releases the results of a poll of nearly 2,000 businesses, which suggest that most businesses (85%) do not want further EU integration.

The survey found that only 12% of firms want to leave the EU altogether. Almost half of businesses (47%) want to negotiate a looser relationship but with the UK remaining a member of the European Union. Only 9% of businesses want further integration.

Of those businesses that want to see a different relationship with Europe, over half (55%) see a referendum on EU membership as a medium-term issue, to be dealt with in the next one to five years. Another 40% of those firms would like to see a referendum within the next 12 months.

“These results clearly show that British businesses do not want further integration with the EU," John Longworth, Director General of the British Chambers of Commerce (BCC), said.

The survey found that only 12% of firms want to leave the EU altogether. Almost half of businesses (47%) want to negotiate a looser relationship but with the UK remaining a member of the European Union. Only 9% of businesses want further integration.

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