Unlocking SME potential through Free Trade Agreements
An Op-Ed by Richard Currie, UPS
Director of Public Affairs & Trade Policy
Earlier this week, I was really pleased to take part in a UK-U.S. free trade agreement (FTA) roundtable hosted by the Department for International Trade (DIT) and British American Business (BAB) for small and medium size businesses (SMEs) in the Midlands. The SMEs that participated were able to talk with Minister of State for Trade Policy Greg Hands MP and senior officials from the DIT about the benefits of a UK-U.S. FTA. I was also delighted that many of the participants are UPS customers clearly interested in that FTA and the opportunities it will bring to them.
I started to get actively involved with BAB and its trade policy programme in around 2013/14 when the U.S. and EU kicked off their Transatlantic Trade and Investment Partnership (TTIP) negotiations. At that time, UPS partnered with BAB in support of BAB’s nationwide city tour from Glasgow and Edinburgh, to Manchester, Liverpool, Newcastle and Leeds to Birmingham, Bristol and beyond. We travelled the length and breadth of the country working with local partners to arrange and host meetings with SME participants to highlight the importance of FTAs and the benefits they can bring to SMEs.
FTAs are a key way of removing barriers to trade for SMEs; SMEs do not have the same resources as multinationals and so cannot so easily call on the support of multiple lawyers and consultancies to help them enter a new market compliantly. For SMEs, there is often a locked door to new markets that can only easily be unlocked and opened with an FTA. FTAs can, on a reciprocal basis, make market access simpler for SMEs through a specific SME chapter, streamlined ecommerce access and improved customs procedures (such as a high duty de minimis excluding lower value items from duty).
UPS serves a very large number of businesses of varying sizes. Many of our customers are SMEs. A number of these SMEs will grow from small to medium size to large over the years and will grow by taking advantage of our global network to sell outside the UK. But they need market access for their specific products first and an FTA can provide them with that market access – it opens that metaphorical locked door.
With a UK-U.S. FTA, there will be better access for SMEs to the world’s largest marketplace. The UK and U.S. are both English speaking markets with many shared values and economic similarities – true, the U.S. is a larger economy but both place importance on the contribution financial services, services in general and ecommerce make to their individual GDPs. The transatlantic trade lane is already large and significant but there is plenty of room for growth facilitated by a FTA with improved customs and trade facilitation processes, lower or no tariffs and with new opportunities in a major ecommerce market for ecommerce exporters. It will lead to more UK exports to the U.S. and more U.S. imports to the UK and, as a result, greater consumer choice at a lower cost.
At UPS, we will continue to work with the DIT, BAB and our customers to make sure that we have a comprehensive UK-U.S. FTA as soon as possible and that we all work together to continue to grow that transatlantic trade lane.