Siddharth Shanakar argues that Brexit has brought nothing but worry and financial loss for businesses
In my opinion it’s unavoidable, at least in the short term, that exiting the EU will poise significant challenges for UK SMEs who export their goods abroad. Currently, EU exports account for a whopping 48% of British exports. But Theresa May has repeatedly asserted the UK will leave the customs union and the single market when it exits the EU next year. If this comes to fruition, it will spell the end of free trade to EU countries, leaving UK businesses grappling with complex administrative and financial barriers. This is a very worrying prospect for the many UK leaders whose companies currently rely heavily on EU exports.
The government’s reaction has been a scramble to strengthen trade ties globally and put greater incentives in place for UK businesses to export to countries outside the EU. 2018 has seen a succession of visits made by UK trade officials to countries such as China and Thailand.
Indeed, Asia in particular presents a huge value offering and a real alternative to the EU. In my opinion, to minimise the impact of Brexit, businesses need to shift their focus East. The weaker GBP should strengthen exports globally and, although trading within the EU will likely be much harder, trading globally should become easier.
Asia opens up a world of possibilities. China, for one, is a growing market with immense potential for British businesses and the UK already has a good image there for trade and education relationships.
In addition, East Asia is a large and wealthy society with high consumption. Whilst countries like Japan (the world’s third largest economy) already consider the UK an ally, based on long-standing cultural and economic ties.
It seems inevitable that leaving the EU will have a negative impact on the British economy as a whole. To me, it’s absolutely essential that the UK taps into the strong and growing Asian market in order to ensure a burst in trade that could prove very helpful post-Brexit. Britain’s current export figures are at an all-time low and an economic recovery plan will have to constitute strengthening the export market to be successful. To counter the negative impact of Brexit on trade, the UK will have to re-adopt its old policies – of an outward-looking, engaged country.