International Trade in the U.K.

News Related to International Trade in the United Kingdom

Business outline for the United Kingdom

Main Industry Sectors

The Agricultural sector accounts for less than 1% of the GDP, but is very productive. Main crops are potatoes, beetroot, wheat and barley. Livestock farming (especially sheep and cattle) continues to be a major agricultural activity, despite the crises of "mad cow" and "foot and mouth" diseases. The fishing sector is also well developed but is currently suffering from the depletion of fish volumes in the traditional fishing areas.

The United Kingdom has considerable mineral resources. Once the world's 10th biggest oil producer with huge natural gas reserves, its production is dropping fast. Nevertheless, groups like BP and Shell continue to be amongst the global leaders in the petroleum industry.

The secondary sector is not very competitive. The main activities are tool machinery, transport material and chemical products. The sectors with a good potential are information and communication technologies, bio-technology, aviation industry, renewable energies and defense.

The services sector, which employs three quarters of the active population and contributes three quarters of the GDP, is the driving force behind the economy. London remains Europe's largest financial market place, on par with New York.

Economic Overview

The United Kingdom is the seventh global economy. However, since April 2008, the country has been going through a deep recession, deeply hit by the international financial crisis, due to the dominance of the third (financial) sector over its economy. After contracting by almost 5% in 2009, the GDP growth recovered slowly in 2010, rising to 1.7% according to estimates. Growth should remain slow in the coming years.

The crisis has damaged the country's public finances. Aid to the financial sector and fiscal stimulus measures have deepened the deficit and increased the burden of public debt, the latter reaching record levels of 10% and 70% of GDP respectively. The government's priority is therefore to improve the budgetary situation. Other reform measures have been announced, notably regarding the educational system, social security, pension system, financial regulation, taxation, etc.

The unemployment rate, before one of the lowest in Europe, has been rising sharply since the crisis and is estimated at around 8%.

FDI in Figures

According to the World Investment Report 2010 of the United Nations Conference on Trade and Development (UNCTAD), the United Kingdom is the fifth highest recipient of direct foreign investment (FDI) in the world. In 2008-2009, FDI flow was on the decline and this trend should continue in the coming years. FDI flux decreased sharply since the international financial crisis and should remain low in the coming years.

The UK nevertheless has real strengths: London still seems to be Europe's financial capital. Furthermore, Great Britain has a strong currency and one of the most important European markets.

FDI Government Measures

Once foreign companies are established in the UK, they are treated exactly like British firms. Within the EU, the British Government is a strong defender of any British registered company's rights, irrespective of its nationality or the nationality of its owner.

Country Strong Points

One of the United Kingdoms main strong points is the speed of formalities: only thirteen days are required to set up a company in the United Kingdom, compared to the European average of 32 days, which puts the country in first place in Europe and sixth place in the world. Low taxation makes the environment investor-friendly. London is the world's leader in terms of financial services centers, on a number of key performance indicators and was once again voted best European city by the European Cities Monitor, which studies the appeal of cities .

Country Weak Points

The country's main weak points are: the financial sector's excessive influence on the GDP, poor quality infrastructures and a high level of competitiveness from foreign companies in the industrial sector.

Foreign Trade Overview

The United Kingdom is one of the biggest actors of international trade. Trade represents almost 60% of its GDP. It is the world's second biggest exporter and the third biggest importer of commercial services, and the tenth biggest exporter and sixth biggest importer of goods. The United Kingdom's main trade partners are the European Union, the United States and China. The United Kingdom shows a trade deficit: after an improvement during the global recession, following a global drop in trade, the deficit has again worsened and this trend should continue in the coming years.