Background to the review
The Pre-Budget Report 2008 included the following commitment by the Government:
“International trade represents a significant proportion of GDP and it is crucial that domestic trade regulation is as easy to comply with as possible, in order for UK based firms to remain internationally competitive.
“The Government will take forward a Department for Business, Enterprise & Regulatory Reform and HMRC led work programme to review the cost to business of complying with international trade regulation and put forward an action plan alongside the 2009 Pre-Budget Report setting out how it will reduce costs to business.”
A cross-Government project has been established to undertake this review. The objectives are to identify significant compliance costs to business from international trade regulation that could be reduced or avoided altogether, and to set out a practical course of action to make trade with the UK easier and less costly for UK traders.
An important part of the review process involved consultation with business. This was an opportunity for businesses involved with international trade to have their concerns heard by the highest levels of Government and to influence an action plan of changes that could significantly reduce the regulatory burdens that they face in the future. SITPRO, the UK’s trade facilitation body, was asked to lead this aspect of the review.
Drivers for the review
During summer 2008 the World Bank published its annual Doing Business Report , which ranks countries according to the ease of doing business in or with around 180 countries. While overall the UK ranked 6th, it was ranked 28th in terms of ease of trading across borders. With international trade in goods being such an important contributor to the UK’s GDP (with exports totalling £221bn and imports £310bn in 2007), and with many of the UK’s competitors being ranked higher, this has concerned the Government. SITPRO had already identified a need to address the report in its own Five Year Strategy. The subsequent economic downturn has provided a further and urgent need to address unnecessary costs to business.
Consultation
SITPRO therefore undertook a consultation to learn about the real experiences of companies involved in international trade, looking for:
- Evidence of trade regulation or procedures that are creating burdens that business feels is unnecessary and which could be reduced or avoided altogether;
- Inputs from business to help cost compliance with Government requirements;
- Case study examples to illustrate the problems that arise in international trade;
- Examples of documentation and business processes used by companies to ship and clear goods for import or export (with a view to seeing whether they could be simplified and/or made less costly);
- Ideas for the Action Plan.
The findings of this consultation have been published at http://www.sitpro.org.uk/regreview-consultfindings. They have also led to a Government Action Plan and other reports on how the issues raised will be addressed.
Return to Policy Development: Cost of International Trade Regulation
