The City of London: An ecosystem enabling international trade

As the UK is in the process of reshaping its economic relationships with key global markets, and the UK Government seeks to position international trade as a central pillar of the post-COVID-19 recovery, there is an opportunity to not only preserve the UK’s trading strengths but also look anew at how best UK-based Financial and Professional Services (FPS) can support firms across all sectors of the UK economy to trade internationally.

The UK has huge strengths in international trade. The UK stands fifth in the world in total exports and second in the world in total services exports. The UK’s world-class FPS offer is a key underlying factor.

The UK’s FPS ecosystem is recognised for its openness, global connections and culture of collaboration. This ecosystem underpins the UK’s strengths as a services exporter as firms
from around the world turn to the UK for its expertise, talent, supportive regulatory environment and access to capital. The UK FPS sector also plays a vital role in supporting and enabling firms.

Against this challenging backdrop, there is an imperative to maximise the value of UK-based FPS for non-FPS firms. Success will see firms up and down the country, and across all sectors of the economy, deriving greater value from the UK’s leading services sector and increasing their capacity to export internationally as a consequence. The resulting benefits will include greater export volumes, underpinning jobs and growth across the whole of the UK.

This is a report for UK policymakers. Too often trade policymaking approaches trade in services and trade in goods in silos and as separate policy areas. Yet, as this report demonstrates, that is not how firms trade in practice.

Now the UK has the ability to set its own trade policy agenda, for the first time in some forty years, it should adopt a more holistic approach to policymaking and treat services trade and goods trade as interdependent and mutually supportive in order to maximise future opportunities.

The analysis shines a light on how the UK FPS ecosystem supports internationally exporting firms through a focus on three specific sub-sectors: legal services, trade finance and maritime services. This report offers a window into a small sub-section of much wider ecosystem and represents the beginning of a conversation where further analysis into the roles played by additional FPS sub-sectors would contribute greater understanding still. It is hoped that this report will contribute to plugging some of the knowledge gaps within the wider policy making community.

To view the original report, please click here