As one of the largest economies in the world, the UK can set the tempo for economic relations globally when there is perceived value in what is being offered.
Part of this ability to forge new connections comes from the entrepreneurial spirit of UK businesses looking to make the most of international trade.
With new trade agreements signed between the UK and more than 70 countries, now is the time to determine how a Free Trade Agreement (FTA) can benefit your business.
What is a Free Trade Agreement (FTA)?
An FTA is designed to reduce or remove barriers to trade, such as tariffs or restrictive regulations.
They are typically forged between two countries but can include multiple nations.
The main types of FTAs are:
How do FTAs benefit your business?
Knowing which international markets to target with your expanding business can often be the biggest challenge for international businesses.
FTAs provide better economic conditions that can allay some fears you may have about branching out into new markets.
Some of the most notable FTAs include:
FTAs also often feature protections for intellectual properties, services and investments, which should provide a level of reassurance in your international operations.
Greater market access with fewer barriers to trade can also see businesses experience better profit margins as import and export costs do not weigh as heavily on the books.
In turn, your customers will likely be happier if they do not have to pay extra for your goods or services, while you can work to diversify your supply chains to weather any economic challenges that may lie in store.
Can businesses rely on FTAs?
If the last year revealed anything, it is that economic foreign policy is tumultuous.
FTAs can serve as good guidance for where you can consider expanding your business, but they should not be viewed as an ironclad assurance of permanent trade relations.
Additionally, there are other factors to consider when targeting new countries and you need to determine whether it is the correct market for you.
Any potential revenue needs to be balanced with planning for data protection requirements, visas, local licensing and technology infrastructure when dealing with overseas markets.
How can I make the most of FTAs?
Not all FTAs apply to all businesses, so you need to understand more about an FTA before you let it inform your decision.
Seeking professional advice is a good way to begin your financial preparations before expanding into new markets.
We can help you manage any administrative tasks needed to let your business make the most of FTAs.
Speak to our team today to learn more about how FTAs can benefit your business.
