New research highlights knowledge and skills gaps in key trade areas for business
To mitigate the impact of Britain’s exit from the European Union (Brexit) and boost future economic performance and investment growth, the UK government is moving quickly to strike trade deals with a number of countries.
The Australia-UK Free Trade Agreement signed last month was the first major bilateral trade agreement negotiated by the UK since Brexit, and is being hailed as a “gateway” for Britain’s broader trade ambitions, which include plans for trade deals with the United States of America, Japan, India, New Zealand, Algeria, Bosnia Herzegovina and Montenegro. The UK has also turned its eye to regional market opportunities, signalling Britain’s interest in joining the Comprehensive and Progressive Trans-Pacific Partnership (the CPTPP) last month.
There are virtually no businesses trading between the UK, Europe and Australasia which won’t need to make changes as a result of the seismic market shifts resulting from this dramatically changing trade landscape. But what do these changes mean for business at a strategic and day-to-day operational level? And are today’s businesses equipped with the skills and knowledge required to overcome new barriers and take advantage of emerging trade opportunities?
With the UK focusing further afield, to the Pacific and Australasia, businesses face new trading opportunities, as well as new challenges: changing trade formalities and regulatory controls, shifts in legal frameworks, as well as revised trade and competition standards. Industry leaders and trade bodies are in the press daily calling for measures to address a host of new challenges, including:
- regulatory equivalence for access to financial markets
- uncertainties surrounding the supply of services between the UK and Europe
- pharmaceutical regulation and supply
- digital trade and data sharing, including for judicial and security purposes
- managing risks in global supply chains
- complex cross-border movements of parts in automotive, aerospace and other industrial supply chains
- dispute settlement across more fragmented legal frameworks and alternative dispute resolution options for cross-border transactions
- more efficient solutions for new food hygiene checks that have disrupted cross-border business built around a ‘just in time’ delivery model
- the ability to utilise human capital more flexibly, as businesses struggle to find the skilled employees they need to ‘build back better’ post-Covid.
A recent global study conducted by EY involving 400 businesses found that many of today’s businesses lack the trade skills and knowledge required to advance their business and growth objectives. While most businesses recognised that it is more important than ever for them to take a more strategic approach to international trade (as many as 81%), the majority still focus their efforts on the more operational aspects of trade, such as compliance.
Many businesses felt they lacked the skills and confidence to engage in more strategic or value-building areas, such as identifying and assessing new markets and engaging in government policy making. They identified knowledge gaps in key trade areas, including intellectual property, digital regulation, and dispute resolution and reported difficulties finding individuals with the trade expertise necessary to expand their businesses.
In short – the study found that today’s businesses are missing out on opportunities that a deeper understanding of international trade policies and government decision making processes could provide.
Reflecting on the need for business focussed trade training programs to address this gap, Dr Naoise McDonagh, Lecturer in Political Economy at The University of Adelaide’s Institute for International Trade (IIT) commented:
“Whether you are leading a business or developing trade policies for government, you are required to navigate an increasingly fragmented and complex global trading environment: new bi-lateral and regional trade agreements are being negotiated; new legal and regulatory barriers are impacting business operations in unexpected ways; the opening of new markets is creating expanded trade opportunities for businesses. And new development programs are needed to support businesses as they chart a course for success in an increasingly complex business environment, and to equip them with the skills and confidence to engage with governments to help create regulatory environments that support their success.”
Reflecting on the impact in the United Kingdom’s banking sector Professor John Taylor, Professor of International Finance and Trade Law at QMUL’s Centre for Commercial Law Studies, noted:
“Legal and regulatory changes are driving shifts in key areas: from where enormous volumes of daily digital trades take place, to where banks should continue to operate. At the same time, the UK government is grappling with very difficult decisions: How closely should it follow former EU regulation to maintain access to markets there? Or is the sector better served by creating alternative, innovative opportunities and escaping what it sees as EU regulatory limitations?”
The University of Adelaide’s Institute for International Trade (IIT) and the Queen Mary University of London’s (QMUL) School of Law have embarked on an exciting new partnership to provide businesses with a deeper understanding of the impact of these shifts in global trade patterns on their business and markets, and to provide practical tools to enable them to create strategies to succeed in a reshaped marketplace and engage in government decision making on issues that impact global businesses.
To learn more about this exciting new development programme, and how you can navigate effectively through the post-Brexit storm, visit us at Global Business Strategy in a Post-Brexit World.
- Lisa Hunt, Business Manager, Institute for International Trade, The University of Adelaide.
- Mary Mitsi, Lecturer in Commercial Law, the Centre for Commercial Law Studies at Queen Mary University of London.
- Nigel Spencer, Professor of Professional Practice, Queen Mary University of London.
- John Taylor, Professor of International Finance and Trade Law, the Centre for Commercial Law Studies at Queen Mary University of London.
The views expressed here are the authors, and do not represent the views of the Institute for International Trade.
This work is licensed under Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
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