Posted: 11/03/10 by Northamptonshire Chamber
If the Government is serious about encouraging British exports as a major source of job creation and economic growth, it must resolve problems around export trade finance, according to a new report by the British Chambers of Commerce (BCC).
The business group says that some form of trade finance underpins 90% of all global exports, easing the flow of international trade by moderating its risks. However, the BCC argues that UK firms are still experiencing severe difficulties securing essential export trade finance, even though the worst of the downturn has passed.
In a joint survey with the Greater Manchester Chamber, the BCC surveyed over 250 exporting businesses. The survey found that:
- One in eight businesses that used export trade finance had experienced problems securing it over the last year.
- Worryingly, nearly half of firms who had faced problems said they had lost business to exporters from countries with state-backed export finance schemes
Unlike comparable trading nations, such as Germany and Holland, the UK has refused to intervene over the past two years to ensure viable firms secure the export credit they need to fulfill orders. This failure to intervene, the BCC claims, is putting British exporters at an obvious disadvantage.
The report recommends that the Government acts quickly to help those firms still struggling with export trade finance, and that it prepares for future market shocks by ensuring a state-backed solution is available whenever needed to protect Britain’s exporters.
Commenting, David Frost, Director General of the British Chambers of Commerce (BCC), said: “If the Government is serious about encouraging British exports as a driver of employment, economic growth and prosperity, it must resolve blockages in the finance that underpins UK global trade.
"Our exporters need to be able to compete more effectively with rivals on the Continent and further afield, who are currently better supported during difficult economic environments or in riskier foreign markets. Chambers of Commerce across the country are well placed to help businesses grow by offering practical exporting advice and support. The Government also needs to play a role - by ensuring that export finance is not a barrier to the UK’s trading potential.”
To view a copy of the Chamber network’s report on export trade finance, click here