Can International trade continue as we know it? Are we really living in an age of uncertainty? What will change, what will remain the same, and where are the opportunities?
Recently I was asked to review the legal framework surrounding international trade. Reminiscent of many years spent studying UK, European, International and Spanish law there was a comfort to the familiar phrases, jurisdictions and structures. True there have been a few changes – mainly in common law, in a few statutes like the Bribery Act, in the development of our relationship with the EU but, in truth, the framework of international law is familiar, soothing and constant.
It allows us to send goods & services to far flung corners of our world. Trade relationships have developed meaning that our exports attract tariffs or incur VAT when we sell to Europe. We hold a most favoured nation status with the World Trade Organisation meaning that we both provide and receive preferential tariff rates. In short we are a respected nation with a reputation for quality, innovation and fair play.
Knowing that we can sell our products or services to another country by depending on the various regulations and laws to ensure products/services reach its ultimate destination is fundamental to successful and sustained exporting. Certainty is key in getting goods/services to market, uncertainty is an anathema to growth and prosperity.
I remember some years ago sending something to Nigeria. I overlooked the fact that everything sent to that country needs to be signed for under a guaranteed delivery. It cost me dear. Heaven knows where the solenoids I sent ended up, certainly not with the intended customer that is for sure.
Certainty in this case was compromised by me – not the system. If I had listened to a colleague at the time, I would of course have followed the right procedure and process. Lesson learned!
Trade terms too have developed over the years since Marco Polo first visited and traded with China. Incoterms have a vital part to play in the certainty of costs and risks related to fulfilment of orders, whereas ATA Carnets fulfil another fundamental aspect of international trade promotion. Developed as international trade has developed, they and other transport documents work within and side by side the legal framework to provide for international trading.
Currently there is a hiatus in the UK caused by the referendum decision to leave the EU. The certainty has been compromised. What will it mean, is there any evidence of it affecting trade yet, will anyone lose/make money from this, what will the new DIT (Department for International Trade) actually do, who will sign Article 50???????????
The truth is that no one can actually forecast what will actually happen when Article 50 is triggered.
So what do we know? We know that we have good relationships with our customers in Europe (mostly), we also know that we have the goods equal to or better than many. We know that we have for many years been extending our markets in China, in America, in the Middle East. We know we know how to trade with those countries, how to engage those new customers and remain competitive in those new markets. We know we have the international legal to allow us to approach new markets like Iran, to re-engage with older relationships like the Commonwealth with new and improved products, services and aftercare. World priorities are changing, thanks to our reputation and place in the world we are able to assess, adapt and meet new global challenges. Moving from selling to Europe to exporting to Europe should be a piece of cake!