Issue of the week: Dr Fox’s export crusade

Are the Government’s new targets for a surge in post-brexit exports just wishful thinking?

British companies have “nothing to fear and everything to gain” from overseas trade after Brexit. That is the verdict of Liam Fox, who has floated plans to transform Britain into a “21st century exporting superpower”, said The Daily Telegraph. The International Trade Secretary aims to increase Britain’s exports from 30% to 35% of GDP by persuading companies to take the plunge. He reckons “there are 400,000 businesses in the UK that could export but don’t”. New measures include putting more information online, giving companies the chance to “piggyback” on ministers’ trips abroad and offering new types of export loans, said Henry Mance in the FT. But he “did not specify a time frame” for meeting its new target “or commit new funds”.

This is hardly “the first attempt to broaden the horizons of UK plc”, said Larry Elliott in The Guardian. Back in 2015, the aim was to double exports to £1trn a year by 2020 – a target that always looked “a stretch” and was quietly dropped last year. “There is nothing wrong with this motherhood and apple pie stuff” about encouraging small business to think big. “But there is not the remotest possibility that this initiative will raise British exports by five percentage points of GDP.” Ministers would “dearly love Britain to be up there with Germany as a European exporting powerhouse”, but have so far failed to learn the right lessons. Put simply, Germany has top-quality products that the rest of the world wants to buy. “There are opportunities out there, even with the shadow of protectionism hanging over the global economy.” But seizing them is not a matter of setting “Gosplan-like targets”, Soviet-style. “It is a matter of getting the basics right.”

It’s frustrating to hear Fox rabbit on about the potential of selling more luxury goods to the Chinese, “when the pre-eminent trade challenge over the coming years for the UK is simply standing still”, said Ben Chu in The Independent. But he does, of course, have a chance of hitting his target, “even if export sales don’t actually budge”. Over the past eight years, Greece’s exports as a share of its (collapsing) GDP have leapt from 20% to 32%. “A big UK recession and consequent collapse in GDP” might do the same for us. “The jumbo in the room is Brexit,” said David Smith in The Times. No amount of “pie-in-the-sky nonsense about a smooth transition to WTO terms” will persuade companies to start investing until they have greater clarity on a deal, which may not emerge for months. Surveys show businesses “have that sinking feeling”: confidence is down and uncertainty is rising. Many companies will be hoping “this is as bad as it gets”. Let’s hope so.