How to use government services to make the most of trading with countries outside the EU.
Trading with countries outside the EU can offer challenges to businesses because of the long distances and the differences in language and business culture. However, it can also offer a wide range of good business opportunities.
The UK has a strong network of trade relations with non-EU countries with an interest in open markets which are in compliance with World Trade Organisation (WTO) rules. Where barriers prevent access to overseas markets, the UK government seeks to address these, both through its own efforts and through the EU. Where markets are open, it seeks to support the EU in negotiating legally binding commitments through the WTO or by means of bilateral trade agreements.
Practical support is available to help you find business opportunities, market information, trade missions and events, financial support, as well as advice on tax, customs duties and international trade paperwork.
This guide gives an overview of the opportunities and support your business can find when trading with the Commonwealth, the Americas, and the Asian and Pacific regions.
UK trade relations with the Commonwealth
The Commonwealth forms a diverse group of 53 countries including developed, developing and the least developed countries (LDCs). It is also a mixture of large countries - such as India - and small island nations.
These markets offer a wealth of opportunities to UK businesses in all sectors - from agriculture to Information Technology. You can bid for contracts funded by aid agencies for developing and LDCs. You can also subcontract to larger businesses trading with Commonwealth countries.
The UK has close relations with the Commonwealth, and the Commonwealth secretariat is in London. The EU also has close ties with Commonwealth countries.
The UK and the Commonwealth agree on the general benefits of reducing barriers to trade, but the Commonwealth works to ensure that developing countries - especially least developed and small countries - are not unfairly exposed to trade competition from larger, richer countries.
The Commonwealth gives preferential trade access to its member countries, including the UK.
Commonwealth countries are also part of several regional trade groups, including:
- the North American Free Trade Agreement
- Africa, Caribbean and Pacific countries, which have a trade and aid agreement with the EU
- the African Union
- the Association of South East Asian Nations
- the Asia Pacific Economic Co-operation
- the Free Trade Agreement of the Americas
The EU and the UK have trade agreements with most of these organisations.
You can get information on developments in trade policy from the Department for Business, Innovation and Skills (BIS).
UK Trade & Investment (UKTI) provides country profiles, lists business opportunities, organises trade missions and exhibitions, and provides assistance for small businesses.
HMRC also provides practical advice on importing and exporting.
UK trade relations with the US
The US is the main overseas investment market and the main single country export market for UK businesses. The US market is vast - differing by state and region - and forms part of a free trade area with Mexico and Canada.
The business culture and most other practical aspects of living and working in the US are significantly different. It could be easier and more cost-effective to work with - or for - UK businesses already trading with the US, those with a presence there, or US businesses established in the UK.
There has been a recent development in US national and local policy to prioritise climate change, which has led to new business opportunities in environmental products and systems.
If you need to travel to the US and you are a member of BritishAmerican Business - the former American and British chambers of commerce - you can get air fare discounts with British Airways through a scheme launched in spring 2009 to help small businesses.
The UK has its own bilateral trade relations with the US. It also works through the EU. In 2007, the EU and US set up the TransAtlantic Economic Council (TEC), with forums for business, consumers and legislators to promote open trade.
You can also get information on developments in trade policy from BIS.
HMRC provides practical advice on importing and exporting.
UK trade relations with Canada
The UK is Canada’s second biggest world trading partner after the US. Government contacts take place bilaterally, but also through the Commonwealth and the EU.
There are many advantages to trading with Canada - there are no language differences, and the business culture is similar. There are also many UK businesses already established in Canada.
If you are exporting to Canada, UK products benefit from preferential tariffs under Commonwealth agreements. This market access is beneficial to UK businesses and gives them an advantage over other EU countries. Canada and the EU are also currently negotiating a comprehensive economic partnership agreement.
Science, technology and clinical research are particularly strong areas of UK-Canada trade. Other opportunities exist in a wide range of sectors - from oil and chemicals to engineering and media services.
You could benefit from the additional opportunities offered by the 2010 Olympic and Paralympic Winter Games in Vancouver and the 2012 Olympic Games in London.
HMRC provides practical advice on importing and exporting.
UK trade relations with the North America Free Trade Agreement area
There are many opportunities for UK businesses in each of the markets of the North America Free Trade Agreement (NAFTA) - US, Canada and Mexico. The UK has bilateral trade relations with all three countries individually, as well as through the EU.
There is already significant UK investment and trade with the NAFTA countries. You may find that a simple and cost-effective way to start trading is through these businesses. Also, as the NAFTA countries are aiming to increase measures to combat climate change, there are new opportunities in environmental business.
If you want to invest in the NAFTA countries and trade within the region, you need to know NAFTA rules. Find information on NAFTA trade rules on the US Customs and Border Protection (CBP) website.
NAFTA is a complex and highly integrated regional market, and much manufacturing has relocated to Mexico since NAFTA was launched in 1994. This has resulted in rising prosperity in Mexico and the development of the consumer market.
One third of NAFTA trade is concentrated in the automotive, energy and agriculture sectors, which are badly affected by the present economic crisis. The benefits of NAFTA have been unevenly spread, and all three countries involved want to revise parts of the agreement.
The three countries also have individual bilateral free trade agreements with other countries. Mexico has a free trade agreement with the EU, and Canada is also negotiating for this. The US and EU have a free trade dialogue.
UK trade relations with the Free Trade Area of the Americas
There are 34 member countries of the Free Trade Area of the Americas (FTAA) - with a wide range of economies - and these present a wealth of opportunities for UK businesses.
There is also a wide range of industries in these countries and a large number of national laws. The FTAA provides a single point of access for details on these markets.
The FTAA member countries - which include all of the Americas and some Caribbean islands - are working towards the creation of a free trade area, including the North American Free Trade Agreement. The FTAA currently has working groups on nine trade issues:
- market access
- government procurement
- intellectual property
- subsidies, anti-dumping and countervailing duties
- competition policy
- dispute settlement
There are also special committees on:
- smaller economies
- participation of civil society
- institutional issues
The FTAA regularly updates its Hemispheric Customs and Tariff Database for market access. It provides country information and links to national governments and works closely with regional development banks - such as the Inter-American Development Bank. Find the Hemispheric Customs and Tariff Database on the FTAA website.
The UK has bilateral relations with individual FTAA countries. It also takes part in the EU’s bilateral relations with individual countries and in its region-to-region negotiations to establish a trade co-operation agreement with the FTAA.
UK trade relations with Asia and Pacific
The UK government has bilateral trade relations with individual Asian and Pacific countries, and this relationship offers UK businesses a huge range of opportunities in this region - from basic to high-tech industry and services. Some trade is also aid-funded.
These countries range from small Pacific islands and least developed countries, such as Bangladesh, to major economies, such as China, India and Japan. The region also includes smaller but sophisticated economies, such as Australia, South Korea, Malaysia and Taiwan.
There have been recent bilateral government discussions between the UK and Australia, New Zealand, China, Taiwan, Malaysia, and Korea.
The UK also takes part in regular trade contacts with Asian and Pacific countries through the Commonwealth and the EU.
There are EU bilateral and region-to-region agreements with several Asian and Pacific countries. The most established of these is with the Pacific island members of the Cotonou Agreement on trade and aid, but there are also dialogues with China and Japan. Free Trade Agreements are currently being negotiated with India, the Association of South East Nations (ASEAN), and Korea, and there are trade and aid agreements with the Central Asian countries of the Caucasus.
The UK also participates in region-to-region trade co-operation and regular contacts through the EU, with:
- the Asia-Europe Meeting
- the Asia Pacific Economic Co-operation (APEC)
The European Commission provides details of EU trade relations with individual Asian and Pacific countries.
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