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OPPORTUNITY TO INCREASE UK EXPORTS TO EMERGING MARKETS

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OPPORTUNITY TO INCREASE UK EXPORTS TO EMERGING MARKETS

Standard Chartered Launches G7 to E7 Trade Performance IndexUK to E7: US$65 billion Future Trade Opportunity

Standard Chartered launches its G7 to E7 Trade Performance Index (Index), which examines the trading partnerships of the G7 with E7  (Emerging Seven) economies – Bangladesh, China, India, Indonesia, Nigeria, Pakistan and Vietnam. The UK, US and France stand to realise the greatest gains if they can fulfil their E7 trade potential. Germany tops the performance table as the only country to currently exceed its total E7 trade potential.

The Index reveals that G7 nations and companies are underperforming in their export trade to the E7. Of the 49 trade routes between individual G7 and E7 countries, only nine currently exceed or meet expectations. The remaining 40 trade routes underperform by a total of US$162 billion against their export potential. This constitutes a 30% annual growth opportunity for the G7. The E7 represent a critical highway to future growth for the G7 in 2018 and beyond.

UK Opportunities

The UK stands to realise some of the greatest gains among the G7 if it can fulfil its E7 trade potential. If the UK’s E7 exports were to meet current expectations, the country’s overall trade to the E7 would increase by 43%.

UK businesses underperformed in their export trade compared to their potential by $4.6 billion with China and $3.6 billion with India. These are two of the top ten biggest G7 to E7 opportunities by value.

Total predicted exports to the E7 could increase by US$16.9 billion to US$64.9 billion when the UK leaves the EU, reflecting the potential for increasing trade with developing countries when outside of the EU. The additional US$16.9 billion opportunity excludes assumptions on potential Brexit outcomes and does not reflect the presumed loss in UK exports to the EU.

Michael Vrontamitis, Head of Trade for Europe and Americas, Standard Chartered: “With the UK settling into a slower pace of growth and Brexit on the horizon, UK businesses need to look more widely for growth. The Standard Chartered G7 to E7 Trade Performance Index reveals that the UK has much to gain from accelerating its export performance in the seven economies we have identified as the Emerging Seven (E7). Our Index shows that after the UK leaves the EU if it reorients its trade strategy towards the E7, the size of the prize is at least an annual US$65 billion. It is clear that the E7 countries represent multi-billion dollar trading opportunities for the UK and British businesses searching for export diversification and growth. Companies should develop sector specific strategies and corridors, then identify how they can increase their opportunities there.”

G7 to E7: The Standard Chartered Trade Performance Index

Country by Ranking* Total Actual Exports (US$bn) Total Predicted Exports (US$bn)
Germany 109.2 55.7
Canada 23.1 29.3
Japan 154.6 218.7
Italy 21.0 32.3
France 30.7 42.0
US 162.9 209.0
UK 33.6 48.0
Total 535.1 635.0

 

* The Index ranks the G7 countries by their actual export trade performance relative to their predicted exports to E7 countries. Countries are ranked higher on the Index if their actual export for each E7 trade route exceeds export potential, while they rank lower if their actual export for each trade route does not meet the predicted export.

Key Findings for the Remaining G7:

USA

  • The US is currently the largest exporter to the E7 overall, but it is falling below potential by over a quarter (28.3%).

France

  • France is exporting a quarter less to the E7 than its potential and could grow overall exports by 2.4% by meeting predicted exports to the E7.

Italy

  • Italy could experience a 2.5% uplift in exports, or US$11 billion annually, if it were to make the most of the opportunities in the E7.

Japan

  • Japan has significant opportunities in the E7. Japanese businesses could increase exports to the E7 by US$69 billion, which would give the entire economy a 10.7% boost.

Canada

  • Canada falls below its potential trade expectations with the E7 by over a quarter (28.6%). Its annual total global exports could grow by 1.7% by maximising on E7 trade.

Germany

  • Germany exceeded total predicted value of trade with the E7 – exporting US$109 billion – double what is predicted. Yet it could be at risk of over-reliance to one market – China.

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Sunak to use budget to expand apprenticeships in England

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Sunak to use budget to expand apprenticeships in England 1

LONDON (Reuters) – British finance minister Rishi Sunak will announce more funding for apprenticeships in England when he unveils his budget next week, the government said on Friday.

Employers taking part in the Apprenticeship Initiative Scheme will from April 1 receive 3,000 pounds ($4,179) for each apprentice hired, regardless of age – an increase on current grants of between 1,500 and 2,000 pounds depending on age.

The scheme will extended by six months until the end of September, the finance ministry said.

Sunak will also announce an extra 126 million pounds for traineeships for up to 43,000 placements.

Sunak’s March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown, but he will also probably signal tax rises ahead to plug the huge hole in the public finances.

Sunak is also expected to announce a “flexi-job” apprenticeship scheme, whereby apprentices can join an agency and work for multiple employers in one sector, the finance ministry said.

“We know there’s more to do and it’s vital this continues throughout the next stage of our recovery, which is why I’m boosting support for these programmes, helping jobseekers and employers alike,” Sunak said in a statement.

(Reporting by Andy Bruce, editing by David Milliken)

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UK seeks G7 consensus on digital competition after Facebook blackout

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UK seeks G7 consensus on digital competition after Facebook blackout 2

LONDON (Reuters) – Britain is seeking to build a consensus among G7 nations on how to stop large technology companies exploiting their dominance, warning that there can be no repeat of Facebook’s one-week media blackout in Australia.

Facebook’s row with the Australian government over payment for local news, although now resolved, has increased international focus on the power wielded by tech corporations.

“We will hold these companies to account and bridge the gap between what they say they do and what happens in practice,” Britain’s digital minister Oliver Dowden said on Friday.

“We will prevent these firms from exploiting their dominance to the detriment of people and the businesses that rely on them.”

Dowden said recent events had strengthened his view that digital markets did not currently function properly.

He spoke after a meeting with Facebook’s Vice-President for Global Affairs, Nick Clegg, a former British deputy prime minister.

“I put these concerns to Facebook and set out our interest in levelling the playing field to enable proper commercial relationships to be formed. We must avoid such nuclear options being taken again,” Dowden said in a statement.

Facebook said in a statement that the call had been constructive, and that it had already struck commercial deals with most major publishers in Britain.

“Nick strongly agreed with the Secretary of State’s (Dowden’s) assertion that the government’s general preference is for companies to enter freely into proper commercial relationships with each other,” a Facebook spokesman said.

Britain will host a meeting of G7 leaders in June.

It is seeking to build consensus there for coordinated action toward “promoting competitive, innovative digital markets while protecting the free speech and journalism that underpin our democracy and precious liberties,” Dowden said.

The G7 comprises the United States, Japan, Britain, Germany, France, Italy and Canada, but Australia has also been invited.

Britain is working on a new competition regime aimed at giving consumers more control over their data, and introducing legislation that could regulate social media platforms to prevent the spread of illegal or extremist content and bullying.

(Reporting by William James; Editing by Gareth Jones and John Stonestreet)

 

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Britain to offer fast-track visas to bolster fintechs after Brexit

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Britain to offer fast-track visas to bolster fintechs after Brexit 3

By Huw Jones

LONDON (Reuters) – Britain said on Friday it would offer a fast-track visa scheme for jobs at high-growth companies after a government-backed review warned that financial technology firms will struggle with Brexit and tougher competition for global talent.

Finance minister Rishi Sunak said that now Britain has left the European Union, it wants to make sure its immigration system helps businesses attract the best hires.

“This new fast-track scale-up stream will make it easier for fintech firms to recruit innovators and job creators, who will help them grow,” Sunak said in a statement.

Over 40% of fintech staff in Britain come from overseas, and the new visa scheme, open to migrants with job offers at high-growth firms that are scaling up, will start in March 2022.

Brexit cut fintechs’ access to the EU single market and made it far harder to employ staff from the bloc, leaving Britain less attractive for the industry.

The review published on Friday and headed by Ron Kalifa, former CEO of payments fintech Worldpay, set out a “strategy and delivery model” that also includes a new 1 billion pound ($1.39 billion) start-up fund.

“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.

Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.

The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance, all mean the sector’s future in Britain is not assured.

It also recommends more flexible listing rules for fintechs to catch up with New York.

“We recognise the need to make the UK attractive a more attractive location for IPOs,” said Britain’s financial services minister John Glen, adding that a separate review on listings rules would be published shortly.

“Those findings, along with Ron’s report today, should provide an excellent evidence base for further reform.”

SCALING UP

Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.

“It’s a question of knowing who to call when there’s a problem,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.

A UK fintech wanting to serve EU clients would have to open a hub in the bloc, an expensive undertaking for a start-up.

“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” Swinburne said.

The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).

“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.

($1 = 0.7064 pounds)

(Reporting by Huw Jones; editing by Jane Merriman and John Stonestreet)

 

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