Freeports – Liverpool City Region was an obvious location for a Freeport with its historic docks, including the deep-water container terminal at the Port of Liverpool, the UK’s largest western facing port, handling 45% of trade with the US. The Freeport status will act as a magnet for jobs, investment and trade at the specially designated sites within the region, and the government’s approval of the LCR Freeport’s business plan lights the touchpaper on increasing economic activity by as much as £850m. But the LCR is not just important to the Liverpool City Region itself, but as the only Freeport in North West England it will be a focus for increased activity across the region as the Freeport improves trade opportunities. The direct benefits of Freeport status based on the government’s objectives are to establish hubs for global trade and investment; create hotbeds for innovation; and promote regeneration with the creation of highly skilled jobs.
There are several levers that apply to enable this, including tax reliefs, customs arrangements, planning, regeneration, innovation and trade and investment support. Every Freeport has at least one customs site, with multiple potential benefits for authorised businesses within the site including:
- Access to duty suspension, duty exemption on re-exports and flexibility on duty calculations
- Streamlining of processes
- Special procedures on movements of goods
An added incentive are the tax benefits within the ‘tax site’ enterprise zones including on Business Rates, Employer’s National Insurance, Stamp Duty Land Tax, and Enhanced Capital, Structure and Building allowances. If all of this sounds too good to be true for your business, then get your skates on and explore further. The only downside I can see is that there are only a limited number of Freeports in the country and only one in the North West.
Free Trade Agreements – I have taken part in several Government briefings discussing Free Trade Agreements in recent weeks and, whilst there are still complex topics to be decided, the progress is impressive. The Australia and New Zealand agreements are currently working their way through parliament, and the Ukraine FTA has been extended with a Digital Trade Agreement. In addition, there are some major agreements making real progress.
One of the more imminent (at the time of writing) of these is the snappily named Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) whose current members are Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Whilst the UK already has bilateral Trade agreements with seven of the members, accession to the CPTTP is expected to further enhance trade. There is also strong progress with India, with 17 chapters of the negotiations closed so far and the next round of negotiations about to start. India is now believed to be the largest country in the world with a growing population exceeding 1.4 billion that has now overtaken China, whose population has declined. Given the market size and the rapidly growing Indian economy which last year was approximately the same size as the UK’s but is expected to outgrow it, the potential for businesses to benefit from a Free Trade Agreement is enormous. With a rapidly expanding middle class, parliamentary democracy and common language, if you are not already, you should be considering looking closely at trading opportunities.
Negotiations with the Gulf Co-operation Council, consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates are progressing well and there is already substantial bi-lateral trade with these countries. We are also looking to enhance current trade agreements with Canada, Mexico and Israel.
Whilst there is no immediate prospect of a FTA with the United States of America, the UK is negotiating bilateral Memoranda of Understanding with up to 20 individual States with several of these already having been signed. Finally, the UK and the EU have recently agreed the Windsor Framework which aims to resolve outstanding issues with the Northern Ireland Protocol by finding practical solutions to many of the issues. This is expected to help in improving the implementation of the Trade and Co-operation agreement between the two.
Whilst all this seems to be going at a snail’s pace, it is in fact moving surprisingly quickly by the normal standards for Trade Agreements. Secretary of State, Kemi Badenoch, has replaced the focus on speed with ensuring that we get the right deals and, reading the room in my various meetings, I sensed a real mood of optimism amongst those in the know.
The growth of UK trade has not been getting enough positive press, but with the overall 42% inflation adjusted increase in UK exports since 2016, and the substantial increase in 2022 with exports exceeding £700bn for the first time ever after the previous high of £699.7bn in 2019, which then fell to £616.8bn in 2020 with the effects of Covid and Brexit. Exports in 2022 actually rose by £159bn to £813.3bn, an increase of 24.3%, with Services growing slightly faster than Goods and now only 4.6% less than Goods, an improvement on the equivalent 2016 figure of 8.1%
My view is that the Government’s commitment to expanding International Trade, for example with the Freeports programme, together with the success already achieved, shows that is a great time for UK businesses to either start or increase their exporting. There is so much help and encouragement available and the nationwide network of Export Champions will all agree that exporting is great for business.
Tony Goodman MBE is a successful exporter and has been doing so through a variety of different businesses. He is currently Marketing Advisor at Forest and Co who specialise in offering guidance on branding, exporting and sales: www.forestandco.com