More middle market businesses want the UK government to secure a trade deal with the Commonwealth over any other leading group of countries or trading blocs according to a YouGov survey, commissioned by leading audit, tax and consulting firm RSM.
As world leaders assemble in London this week for the Commonwealth bi-annual heads of government meeting, 30 per cent of respondents to the quarterly survey of more than 300 UK middle market business leaders had the Commonwealth of Nations (formerly the British Commonwealth) down as the group of countries they’d want the UK to sign a trade deal with upon leaving the EU.
This represented over double that selecting the Trans-Pacific Partnership (TPP) (14%) and bilateral deals (14%) as preferred future partners, and treble those preferring to secure a deal with the Gulf Cooperation Council (GCC) (10%)and the Association of South East Nations (ASEAN) (9%).
The North American Free Trade Agreement (NAFTA) attracted 17 per cent of respondents as their most preferred trading group.
The Commonwealth’s business chief has said it would be a ‘dereliction of duty’ were Britain to fail boosting exports to member states and persuade them to formally commit to free trade. Formulating an agreement that encourages trade without tariffs or barriers ‘wouldn’t be difficult’ said Lord Marland, chairman of the Commonwealth Enterprise and Investment Council.
The majority of every sector surveyed, including manufacturing (30 per cent), financial services (39 per cent), TMT (31 per cent), construction (34 per cent) and consumer (23 per cent) preferred the Commonwealth.
Every region, including London (26 per cent), South (32 per cent), Midlands (36 per cent), North West (31 per cent), North East (26 per cent) and Scotland (26 per cent) also preferred the Commonwealth.
52 per cent of companies in Scotland see the US exiting NAFTA as major or minor risk to their business. 44 per cent of manufacturing businesses also perceived it as a risk.
Simon Hart, RSM’s Brexit lead partner said: ‘The Commonwealth charter commits itself to an effective, equitable, rules-based multilateral trading system. However the bloc has never actually established a binding position on free trade. There is no doubt that this group of countries presents a clear, and potentially huge opportunity post Brexit. Our findings appear to suggest that the majority of middle market firms agree. The question remains over appetite at Government level and how effective a deal they are able to secure.’
The Commonwealth Business Forum will run alongside the main summit this week. Senior politicians and executives from 74 countries, including 30 heads of state are expected to attend.
The modern Commonwealth, which was formally created in 1949 and predominantly consists of former territories of the British Empire, and now covers a population of 2.4 billion people, around half of whom live in India.
Middle market companies would like to see the UK form strong partnerships with the US (31 per cent), France (28 per cent) and Germany (27 per cent), with China (19%) and Spain (11%) also featuring in the top five preferred partners.
Over half would open a subsidiary or branch in either Germany (53 per cent) or France (48 per cent) if they were to open in Europe, with Spain (29%), Italy (23%) and The Netherlands (20%) also featuring prominently.