BExA welcomes new UKEF inquiry as outlined in ITC report on trade policy response to Covid-19
The International Trade Committee (ITC) has published a report titled ‘The Covid-19 pandemic and international trade’ in which it examines the impact of Covid-19 on global trade; how the UK government and international organisations have responded; and ways to ensure future supply chain resilience.
BExA welcomes the findings of the report, specifically the recommendations made by the Committee to UK government, including the Department for International Trade (DIT) and UK Export Finance (UKEF), to support UK businesses trading overseas.
In the section of the report on ‘UK government response: Trade finance and insurance’, the ITC references BExA’s written submission to the inquiry, in particular BExA’s feedback that the government’s response to the impact of the pandemic on business “has been positive in message but has been lacking in delivery”. The ITC also references that BExA has welcomed UKEF’s ability to support transactions in wealthy countries but has expressed concern that “the demand may overwhelm UKEF’s current resources”.
BExA has noted with interest that, as stated in the report, the ITC plans to launch a separate inquiry to examine the work of UKEF in greater detail. BExA stands ready once again to contribute to this evidence base. The BExA Annual ECA Benchmarking Paper, which measures UKEF against other export credit agencies around the world, and has become the go-to guide to determine how the UKEF product range compares, will no doubt be of assistance to the inquiry. The 2020 edition of the benchmarking paper is due out in October.
In its report, the ITC acknowledges the efforts made by UKEF to support UK exports during the pandemic, welcomes the rolling out of ‘bounce-back’ schemes for key sectors, and commends the steps taken by the government to ensure continued access to trade credit insurance for businesses. Nevertheless, it recommends that “UKEF be flexible in its response, to ensure that the widest possible range of sectors can avail themselves of its support. Further, we recommend that UKEF consult quickly and widely with businesses on the development and rollout of its new products, to ensure any feedback can be considered in the design phase.”
This recommendation echoes BExA’s view – as outlined in a response to the recent National Audit Office’s report on UK government support for exports – that UKEF seek the opinions of exporters, individually and through trade associations like BExA, before implementing any recommendations to ensure that any such improvements will deliver the expected benefits to exporters.
BExA’s submission to the ITC addressed all eight of the points raised by the inquiry:
- What impact will the global Covid-19 pandemic have on UK businesses trading internationally, in the short-, medium- and long-term?
- How effectively has the Government responded, both in the UK and in overseas posts, to the short-term negative impact of the pandemic on UK businesses trading internationally? What further steps could be taken to mitigate this impact?
- What medium- and long-term negative impacts could arise from the pandemic for UK businesses trading internationally? What steps could the Government take to mitigate these impacts?
- What steps can UK businesses take to mitigate the negative impacts of the pandemic on international trade?
- How best can the UK Government facilitate trade in essential goods during the pandemic?
- How should the Department for International Trade work with the rest of central government, as well as devolved, local and regional government, to deliver a coordinated response to the pandemic?
- How can the UK Government engage with countries at the World Trade Organization and bilateral trading partners – including those with which the UK has a significant trading relationship or one facilitating trade in priority goods – to promote international cooperation and a coordinated global response to the pandemic?
- How might the pandemic impact global trade patterns and international supply chains in the long-term?
Posted 29 July 2020