Credit Management magazine October 2017

INTERNATIONAL
TRADE
Monthly round-up of the latest stories
in global trade by Andrea Kirkby.
EUROPE
STRIKES BACK
IT'S ironic that just as the UK
decides to leave an economically
stagnant EU, the Eurozone
economy starts to wake up.
Greece even managed to get
a debt upgrade from Fitch
(admittedly it's still rated B but it's a start).
Unemployment is at its lowest since 2009,
production is running 3.2 percent up on
last year, and the economy is growing
faster than the US.
Of course, not everything in the garden
is rosy. Increasing inequality is a concern,
Italian banks still look dodgy and France is
still not growing fast enough to create jobs,
but there are grounds for optimism. I know
the prevailing political soundbite is that
we're going to be ‘global’ and trade with
everybody else except Europe – but if the
Eurozone is about to see a period of growth,
you’d be mad to give up those markets.
There is however a nasty sting in the
tail of a resurgent Europe. The EU is really
batting for its exporters, with ongoing
trade talks not just with Japan, but also
Australia and New Zealand. I suspect that
like Canada, the two other Commonwealth
markets on which the Department for
Exiting the European Union puts such
store will end up giving the EU a good deal
– and unless they have a number of spare,
experienced trade negotiators, that's going
to put Britain behind in the queue.
BRINKMANSHIP over North Korea isn’t helping
Asian stock markets, but I think there’s a more
intriguing conclusion to be drawn from events.
Donald Trump clearly still believes (to borrow a
phrase from 1066 and all that) that the US is still
‘Top Nation’ – but in fact it looks to be China that
has the most influence over the situation. At the
same time China has quietly moved to reassert
the Communist Party's control of the economy,
sending out an edict to restrict investment in
real estate and tourism and focus it more on the
OBOR (One Belt One Road) strategy.
China is growing in confidence and
influence. That could make life complicated
for companies exporting to China, if the
Government starts trying to micromanage
the economy. But it also shows how great the
opportunities for exporters are – if you're both
brave enough and clever enough to ride on the
back of the dragon.
DESPITE media concern about whether
an absence of low-paid EU pickers will
destroy the UK strawberry market, some
areas of agriculture are doing well – meat
exports in particular. The first half of 2017
saw year-on-year growth of 18 percent in
UK meat exports, with offal up 21 percent.
ASIA AND THE NORTH KOREA CRISIS
PLENTY OF MEAT ON THE BONES
Asia in particular is a huge opportunity
with its growing middle class – China is
a huge market for British pork – and
though two thirds of our meat exports
currently go to the EU, emerging markets
will take a bigger slice of the pie going
forward.
And there are some cheering success
stories in processed meats too. For
instance, the Burger Manufacturing
Company in Wales exports to Europe,
mainly Spain and France – and has been
so successful it's now paid £4 million for a
new factory to support its growth.
The Recognised Standard / www.cicm.com / November 2017 / PAGE 30