By Douglas Chapman
IT seems that as far as Scottish exports are concerned, behind every silver lining is a Brexit cloud. But beyond the current gloom lie far brighter possibilities for Scotland’s trading future.
Recent statistics revealed a 2.9 per cent increase in the value of Scottish exports (excluding oil and gas) for 2018, rising to a total of £85 billion, with exports to the EU increasing by £695 million, internationally by £1.1bn and to the rest of the UK by £1.2bn.
These impressive figures indicate that Scotland’s unique exports are in demand. They also demonstrate the growing significance of the EU to Scotland’s exporters and the benefits of new international markets.
However, the fact remains that for Scotland, one of the greatest challenges of Brexit is being taken out of the world’s biggest single market, which is around eight times larger than the UK market. It is therefore essential for continued growth in our economy to explore new opportunities for trade internationally.
Last year, the Scottish Government published its export growth plan, A Trading Nation, with an ambitious target of international exports increasing from 20 per cent to 25 per cent of GDP by 2029. The plan focuses on how best to expand Scotland’s exports, using data driven analysis to pinpoint key priority sectors, markets and businesses where export growth could flourish.
It’s no secret that the Scottish Government believes our export potential would be far better served through independence in an equal partnership with Brussels, where we could shift the balance of percentages in favour of wider trade with Europe and world markets.
A case in point is our global whisky exports, worth £4.7bn in 2018, accounting for 21 per cent of the UK’s food and drink exports. No wonder Westminster is not too happy about letting Scotland go. Regardless of these figures, the nature of our trading relationship with rUK has been misrepresented by certain Unionists in terms of who needs who more, with threats of economic collapse should we lose their trade through independence. In truth, as Britain’s economy has shrunk, Scotland has found new export markets, while still exporting vital utilities such as electricity to the rUK.
If Brexit has taught us anything, it’s that relationships between nations can evolve, with new alliances forged and dependencies severed. One particular nation illustrates this point and shows how an independent country’s fortunes can change over time and through sustained efforts to advance new trading relationships. This country is Ireland.
In 2002 when the Republic of Ireland completed its currency transition to the euro, 23.9 per cent of its exports went to the UK, according to Ireland’s Central Statistics Office. In 2019 that figure stood at nine per cent, the first time on record that the UK, traditionally its largest EU trader, accounted for less than 10 per cent of exports. Changed days indeed, although we cannot dismiss the danger of Brexit uncertainty to their food and drinks economy.
However, the message here is loud and clear. As EU integration in Ireland has deepened, so too has its dependence on the UK lessened. Firms have loosened their reliance on the UK, with the fall in the number of goods sold into Britain substantially offset by increases to almost all of Ireland’s other major trade partners.
Scotland would do well to follow Ireland’s lead in terms of this market diversification to tackle Brexit challenges. Its trading evolution shows there is life beyond the current dynamic and Brexit stasis. Scotland remains open for business.
Douglas Chapman is SNP MP for Dunfermline and West Fife and SME and Innovation Spokesperson for the SNP at Westminster.