The deal, which took place in December 2013, is the first since the organisations foundation in 1995, will have an important effect on trade facilitation. It includes a simplification of customs procedures that will remove the barriers to cross-border movement and David Cameron has stated that it could benefit UK businesses by as much as 606m.
With new binding commitments announced, customs procedures will be significantly streamlined, which will see increases in efficiency. British exporters, of all sizes, will be able to move their products more quickly around the world allowing them to capitalise on new markets. OECD research supports this, stating that the measures announced will dramatically reduce trading costs, creating a substantial boost to the global economy.
Successful implementation of all measures included in the deal would also reduce total trade costs by ten per cent in advanced economies and 13-15.5 per cent in developing countries. Furthermore, if 100,000 small businesses start exporting over the next five years, it would generate an extra 30bn for the UK economy and create 100,000 new jobs. These figures are welcome news to both the wider British economy and British businesses alike.
Despite this, not all UK businesses are taking advantage of the opportunities of exporting overseas. Challenges preventing them include cultural differences, routes to market and language barriers. However; these can be managed with detailed preparation and planning. Firstly, companies should fully research the market they are hoping to trade with, to ensure there is sufficient appetite for their products. Once this has been determined, the operational logistics need to be considered.
Geographically, many growing new export markets should not be considered as one region; different time zones and several languages often exist. The Department of Business, Innovation and Skills (BIS) revealed that deficit language skills are costing the UK economy around 48bn a year, or 3.5 per cent of GDP and many SMEs in particular can find it difficult when English is not readily spoken.
However, businesses can prepare for this by partnering with an international logistics expert, such as DHL, who can work with them to maximise their potential for success. DHL has a presence in over 220 countries worldwide and with operatives based in country, they understand the local culture and can advise on the local markets business climate.
An understanding of the necessary customs, finance and import/export regulations will go a long way to facilitating distribution abroad, and help is at hand in the form of advisory bodies. UK Trade & Investment (UKTI) offers a range of services for UK exporters, including a flexible business tool called the Overseas Market Introduction Service (OMIS), and the British Chambers of Commerce (BCC) also offers export-training services.
Neil Kuschel is Head of Sales at DHL Express.