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The UK needs both friends and friends of friends

22 May 2017 #Clarkslegal #Environment


The UK Government aims to rebuild and make the most of the many long relationships the UK has around the world represented by the Commonwealth of 52 nations.

The world is a complex jungle of competing interests and issues. Winning advantage is, for now at least, an economic battleground more than the exercise of military might which helped build the British Empire. The game is now all about trade and investment alliances and here the Commonwealth undoubtedly offers much. Shared language, similar legal systems, long established ties of families and businesses. It all makes even the far flung Commonwealth seem oddly like home.

However, the world has got very complicated. A view just of the immense landscape of Asia, which includes valuable Commonwealth friends, shows a constant tension between the US, China and Russia as each seeks to protect its interests or extend its reach. 

A specific development highlighting how the future of Asia may unfold is the new Silk Road, the " One belt, one road" strategy of China. The economic battleground is being shaped by the capacity of China to fund and build the infrastructure badly needed across much of Central and South East Asia in particular. Perhaps this embodies a modern interpretation of the ancient and wise Chinese military strategy that it is supreme excellence to break the enemy's resistance without fighting (Sun Zi's Art of War).

The transport links, by rail, road and sea that China is developing should improve the growth prospects of many countries touched by the Chinese engine of economic success based on infrastructure development and the resultant resource and trade advantages.

While the EU fights its own internal battles and addresses Brexit, and the US appears largely preoccupied with the issues with its own President, China pushes hard for strategic business linkage with the Asian resource rich nations which need infrastructure for economic growth. In Central Asia even Russia finds it hard to compete with the Chinese, who have an extraordinary pace of investment for development and economic collaboration.

As the UK faces a future outside the EU focused more on its historic role in world trade, the UK also has to face up to the fast reshaping of international relations, which is changing the opportunities in the years ahead. Gunboat diplomacy is not today an option for the UK, but that does not rule out global trading success. 

The capacity of the UK for successful international trade is undoubted, though the challenge is far greater for small and medium sized businesses (SMEs) seeking new markets than for the multinationals who are already well positioned for international business. A vital step for the Government is to create the ecosystem which will help British SMEs enter markets new to them most effectively. SMEs are across the world the main future source of innovation, growth and job creation.

It is a time when the message from Britain can rightly be "Britain needs you!". Aimed at the UK multinationals with global trading know how, and at the many experienced and perhaps retired British corporate executives and public servants who have worked across the world in their careers, gaining valuable insights which could now help UK SMEs build their businesses across the world and achieve growth which will help give the UK a more prosperous future. Can the UK mobilise all this expertise to help its SMEs?

Decades of looking so much to the EU as the easiest and nearest market may have stunted the UK's development in trade with many of the fastest growing economies on the planet, but the old Commonwealth ties still hold good across many countries who may be very important to the UK's future.

Identifying one region in particular where the UK has huge potential, the ASEAN countries of South East Asia, the opportunity is there for the UK and other Commonwealth countries in that region, Malaysia, Brunei and Singapore, to collaborate for trade across the whole ASEAN region, with its 650 million people, for mutual benefit. Britain needs its friends in the region to show it the way and help open doors. Britain also needs to be humble to learn from them. It is now not empire building but is all about goodwill and mutual interest in creating prosperity. The good news is that British SMEs can in the 21st Century still find many friends in the Commonwealth who welcome UK trade with and through them. Singapore is famously a place it is easy to establish a business, advocates strong principles of the rule of law and business integrity, and is a sophisticated city-state serving ASEAN while also well connected with the Commonwealth. The future success of the UK in global trade depends on business collaboration with friends like Singapore, Malaysia and Brunei.

Therefore the UK opportunity is not just business within the Commonwealth itself, as massive a market as it is with 2.4 billion people 60% of whom are under 30, but also the extensive wider networks of Commonwealth nations with whom the UK has immense scope to do business through the gateways of its Commonwealth friendships. It is a win win scenario for Commonwealth member nations who can increase their own economic firepower with UK involvement, know how, innovative technologies and finance.

The Commonwealth is both a market and a window on a wider world that awaits the UK. The 93% of world population not in the EU. 

Nonetheless, it is a world of challenging and competitive markets which will require all the accumulated expertise the UK can throw at them. This is no longer empire building or anything like it, it is planned and purposeful collaboration for mutual benefit for which the UK must get its house in order very swiftly to maximise the opportunities for its many ambitious SME businesses.

For further information about this or any other general enquiries, please contact Clarkslegal by email at contact@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.

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Michael Sippitt

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