Select Committee on Foreign Affairs Appendices to the Minutes of Evidence


Memorandum from British Trade International


  British Trade International, established in May 1999, brings together the work of the DTI and FCO on trade development and the promotion of inward investment. It delivers services through its two operating arms, Trade Partners UK (TPUK) which is responsible for trade development and promotion, and Invest UK (INUK), formerly the Invest in Britain Bureau, which aims to attract, retain and add value to overseas investment in the UK. As part of its enquiry, the Committee has indicated that it wishes to consider "the adequacy and effectiveness of the representation of the UK's commercial interests in the US". As British Trade International is responsible for the commercial and inward investment work of embassies and other diplomatic posts, the Committee may find it helpful to have a separate memorandum on this issue.

  Trade policy issues relevant to the USA are the responsibility of the Trade Policy Directorate in the DTI and are not addressed in this document.


  The USA is the largest export market for British goods and services, and has consistently been the largest single investor in the UK. It is home to approximately four per cent of the World's population, 275 million people and comprises 50 states and one federal district covering six time zones.

  The US/UK trade statistics can be separated into two different sets of figures, goods and services.

  The UK exported goods worth £29.1 billion in 2000 (20.1 per cent up on 1999), giving us a 3.8 per cent share of the total US import market worth in excess of $1,314 billion.

  The US imports of services from the UK in 2000 totalled $26.8 billion, giving the UK just over 12 per cent of the US services import market or about 25 per cent of the UK's total earnings on services overseas.

  In return, the UK imported £28.5 billion worth of goods (2000) and £10.9 billion worth of services (1999) from the US. [2000 figures for services not yet available]

  This means that the UK is placed sixth in the US import table behind Canada, Japan, Mexico, China and Germany. Conversely the UK is the fourth largest export market for the US.

  The balance of visible trade has narrowed and now stands at £1 billion yearly in the US's favour (UK figures as at May 2001).

  Foreign direct investment by UK companies in the US continues to grow significantly and totalled $229.8 billion in 2000 (historic cost). This is twenty times larger that UK investment in Germany, our second largest export market.

  There has been a real slow down in GDP growth in the US over the last year with the annual growth rate for Q2 2001 dropping to 0.2 per cent (showing a further drop from Q1 2001 when it was running at 1.3 per cent). These figures compare with growth rates of 2.3 per cent in Q1 2000 and 5.7 per cent in Q2 2000. Whilst this has major implications for both export and inward investment performance, the mood remains cautious but optimistic. Consumer spending remains solid but there are signs of weakness around the edges.

  The USA is the leading source of inward investment for the UK. As in previous years, Invest UK results for 2000/2001 showed that nearly 50 per cent of all foreign investment projects recorded were from the USA (421 out of a total of 869), ahead of Germany (71 projects), Canada (56 projects) and Japan (51 projects). Latest ONS data shows that the stock of US investment in the UK continues to grow and was at £90.1bn in 1999—40 per cent of all UK stock inward investment. The US Department of Commerce's latest statistics show that the UK has 41 per cent of all US investment in Europe—double that of its nearest rival, The Netherlands.

  Invest.UK's market priorities reflect the emphasis in the last two Government Competitiveness White Papers on developing high value, knowledge driven business. Inward investment resources are targeted at the software, IT, telecoms, electronics, e-business, automotive, lifesciences and financial service sectors which are the source of most projects handled.


  The size and importance of the USA as an export market and as a source of inward investment are reflected in the resources attached to our teams there. These are managed from New York by the Director-General, Trade & Investment with a Director, Trade USA and a Director, Investment USA reporting directly to him. The different objectives of TPUK and Invest.UK mean that we operate through two discrete networks to deliver our objectives and work with our different target audiences; however, the two teams work together on major areas of mutual interest.

 (a)   Trade Partners UK

  The 117 staff working full or part time for TPUK in 14 offices in the USA represent the organisation's largest overseas commercial team. These offices are located in New York, Washington, Atlanta, Boston, Chicago, Dallas, Houston, Los Angeles, Miami, San Juan, San Francisco and Seattle and (most recently opened) Denver and Phoenix. The commercial teams in most posts are led by a UK commercial manager. Locally engaged officers, predominately US nationals and known as Trade Officers, are recruited for their industry and local knowledge on three-year contracts. There are 34 full time trade officers including sector specialists. Since the 1999 inspection, US Posts have significantly increased salaries for local staff to help the Consulates compete in the very competitive recruitment market and to motivate existing staff.

  The US team works in close co-operation with the North America Unit in Trade Partners UK in London (17 staff with US responsibilities working on a sectoral basis plus three Export Promoters (businessmen on secondment). Further support for the network in the US comes from the activities of Business Group in Trade Partners UK which leads on global sectoral strategies.

 (b)   Invest.UK

  Invest.UK also has its largest overseas presence in the USA with seven Regional Inward Investment Teams (RIITs) based in Consulates around the US, headed by a UK Consul Investment. There are 36 staff with full-time inward investment responsibility in the USA. The Consuls-General play an important role in pursuing TPUK and Invest.UK objectives with the major companies and key figures in the US. Invest.UK teams in the US comprise FCO, DTI and locally engaged staff together with secondees from the private sector who over recent years have had specialist knowledge in banking, law, accountancy, audit and telecoms technology.

  The Americas Team, of Invest.UK in London has 17 staff and two telecoms technology consultants. It works closely with DTI sector directorates, development agencies in England, Wales, Scotland and Northern Ireland, Departments of Health, Treasury and specialists in human resources, telecommunications, tax and property to ensure that specific requirements of overseas clients are properly understood and met.

 (c)   Joint Activities

  The London staff of TPUK and Invest.UK work with the North America Department of the FCO to support the Minister for International Trade and Investment who also has specific responsibility for North America.

  Since Invest UK became part of British Trade International there has been increasing co-operation between the Trade Partners UK and Invest.UK teams with joint visits and activities where appropriate.

  The UK and Overseas Teams liaise closely with DTI, FCO and other Government Departments, to identify and exploit opportunities for the UK. They also have close links with the UK's Regional Development Agencies and Devolved Administrations and seek to work closely with them to deliver the objectives in their regional international trade and economic development strategies, all of which identify the UK as a key market for their organisations and companies. In many cases the Agencies and Administrations have their own offices in the US, offering opportunities for collaboration in the market with the British Trade International teams.


 (a)   TPUK

  Emphasis in TPUK is increasingly on developing companies' skills to tackle the US market so that they can compete effectively on a long-term basis. The full range of traditional TPUK services are available including tailored market reports, production of New Products from Britain stores and assistance with finding agents and distributors. Exporters are encouraged to segment the target to tackle eg the East Coast or the Pacific North West in distinct chunks, not to try to cover the whole market in one go.

  In 2000, the UK network provided 253 reports for UK companies. 1,360 companies attended 74 trade fairs in the USA with SESA[125] and Trade Officer support, and 320 firms went to the US under the Outward Missions scheme. Over 30 per cent of those companies were visiting or exhibiting in the US for the first time. Additionally, New York, where all publicity material for US purposes is written, has been the flagship for TPUK overseas by going fully electronic from the start of 2001. There is a dedicated web-site for the US media and business customers at where all forms of promotion/publicity are available.

  A number of services and activities have been developed specifically for the US market, including:

    —  Export USA—an innovative approach to government export help which provides a package of assistance for a flat fee of £1,000 based around the key role of a mentor (trade officer at Post) providing ongoing assistance over six to twelve months. Training in marketing skills needed in the North American market is a key feature. Over 160 companies have been involved in the programme so far.

    —  Tailored seminars and events to promote particular sectors or skills needed in the market. A course on Internet Marketing in North America stressing the importance of a good and current web-site for the North American market has been run over 50 times around the UK. Seminars on exhibiting effectively at US trade shows have been equally well received.

    —  In conjunction with a generous private sector sponsor, the North America Unit of TPUK working with the British Consulate-General in Chicago has organised marketing scholarships at the prestigious Kellogg Business School at North Western University in Illinois. An Alumni Association of past scholars has recently been established.

    —  Pilot trade development packages are being developed by the North America Unit involving DTI sector directorates, the regions, Posts and our Export Promoters. The packages concentrate on developing exporters' skills to tackle the US and include a managed group visit to the market, to learn and make key contacts. High performance engineering, IT, beer and bridal wear are examples of sectors where this work is being developed.

 (b)   Invest UK

  Invest UK's main activity in the US is to identify potential inward investment projects. Invest UK teams then provide the UK options for those projects with the aim of winning for them for the UK.

  With around 6,000 US firms located in the UK, there is a very large task to be undertaken of developing relationships with them to develop their businesses to exploit opportunities for expansion and counter threats of rationalisation and contraction. Invest.UK co-ordinates an International Investor Development Programme with partners in the UK and US, but because of resource limitations this effort is modest in relation to its target audience.

  One of the objectives of the Opportunity For All White Paper[126] was to pilot a scheme to attract global entrepreneurs in high-tech sectors to invest in the UK. Invest.UK is taking this forward in the US and Canada. If successful, the three-year pilot will be extended to other markets.

  Invest.UK has its own usa-site at and more general information is available on

 (c)   Other Joint Activities

  Nine ministerial trade visits have taken place in the last 12 months with strong input from Posts to support the UK's trade and investment opportunities with the US.

  A recent introduction to the US network has been a group of four Sector Specialists with the specific remit of working to develop the national knowledge base and contacts within one particular sector and to use that information to support the work of both Invest.UK and Trade Partners UK. The specialists also work with and support the network of six International Technology Promoters (ITPs) for the US. The Sector Specialists have been in existence for over a year and cover the following four sectors: Lifesciences, IT, Film and Automotive. Oil and Gas is also covered by a special arrangement. The specialists use their expertise to help others develop and enhance their work. The Lifesciences Sector Specialist has worked particularly well with the ITP for Lifesciences, the relevant trade officer, the North America Unit in London, Invest.UK and the DTI Sector Directorate on a major event in San Diego last June, BIO 2001. Chemicals Directorate, in liaison with Invest.UK, have also part funded a Chemicals Specialist based in the Midwest who is using his experience to attract high value chemicals projects to the UK.

  The ITPs are managed by the Innovation Service in DTI. Their specific remit is to promote inward technology transfer into the UK, but in the course of their work they make contacts which are of considerable value to both parts of British Trade International. We work in partnership with them for mutual benefit. The network of ITPs for North America has recently increased from two to six and work is already in hand to brief new recruits and identify ways to work together even more. The network of ITPs for North America has recently increased from three to six covering life sciences (two), optoelectronics, digital content, energy and sustainable technologies, and manufacturing industries.

  BTI also works with the FCO's US S&T network, which is charged inter alia with ensuring that UK industry has access to the best of US innovation and technology. The S&T network does this by: acting as the US portal for International Technology promoters and for technology missions (8-10 a year); promoting links between US science and technology provides and uses; and promoting research collaboration to benefit the UK science base.

  The FCO has recently made a major commitment to strengthen the network's technology transfer work by adding eight new posts in Boston, San Francisco, Houston and Los Angeles, in addition to the existing S&T unit (five staff) in the British Embassy in Washington.

  Invest.UK and TPUK participate in a large number of business events and trade shows in the US, working closely on major events in targeted sectors to win business for the UK.


  The Committee may wish to note just a few examples of successful BTI activity in support of trade development or inward investment. Further examples can be provided if the Committee wishes.

  (a)  Premier Hydraulics enrolled on the inaugural round of the Export USA programme in December 1998, which provides a package of assistance based on mentoring by US Posts and marketing training. Since then, it has been building on its initial success in the market. The company produces state of the art products for the aerospace and related industries and is responsible for the design and manufacture of a revolutionary type of vacuum hose for autoclaves known as "Vortex", which now boasts Millennium Products status. The USA is undoubtedly a key market for Premier, and the company provides an excellent illustration of how Export USA helped them to break into the US market.

  (b)  The Halcrow Group Ltd has recently won the contract for the £2.8 million Comprehensive Port Improvement Plan (CPIP) for New York and New Jersey. This came about because of contact with Trade Partners UK in the UK and more particularly with the British Trade Office in New York, building on a tailored market report which was commissioned in September 1999 and was followed up by the trade officer concerned with Halcrow and US contacts.

  Jointly funded by state, federal and city agencies, the project aims to develop an economically viable and environmentally sustainable plan for the development of the Port of New York and New Jersey and associated inland transport infrastructure over the next few decades. Halcrow staff in the UK and a joint Halcrow led UK/US team in New York will carry out the work over the next three years.

  (c)  Invest.UK

  Invest.UK's Annual Review of 2000-01 records and analyses the total of successful investment decisions made in favour of the UK, highlighting some of the key projects won. Invest UK's teams in the US and London were involved in approximately 35 per cent of the 421 decisions made by US companies. One example, the largest in job terms, was the Arizona-based PC distributor and software group, Insight Enterprises, which approached Invest.UK to discuss the UK as a possible location for the company's European Headquarters. After receiving detailed information, numerous visits and meetings, Insight's management elected to locate their £83.5 million investment to Sheffield. The project, upon completion, will employ 1,757 people, 735 of which will be highly skilled software developers and programmers.

British Trade International

September 2001

125   Sponsored Exhibitions and Seminars Abroad scheme, which provides support to UK companies to exhibit at overseas trade fairs seminars and exhibitions. Back

126   Opportunity for All in a World of Change, Cm 5052. Back

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