Memorandum submitted by Midlands World
Trade Forum
The Midlands World Trade Forum (MWTF) is the
largest international trade organisation in the West Midlands
representing the voice of more than 750 SME's. For the last
six months we have been asking our members to voice their concerns
about the issues affecting their businesses during the current
economic climate and so are well placed to submit comments to
the BERR Select Committee Enquiry on "Exporting out of the
Recession".
EXPORT PROBLEMS
Members have cited a wide range of problems
including currency fluctuation, pressure from customers to extend
payment terms/provide more favourable delivery terms, the global
economic slowdown affecting existing export markets and the lack
of credit insurance. The latter in particular occupies the concerns
of many of the companies surveyed and has prompted comments such
as those detailed below:
"The problem is escalating in so far as
the longer we go without the insurance the higher the value of
the uninsured debtors becomes. So far we have taken the view that
we will try and manage the risk on debts due from our long-standing
customers and try to get some sort of advance payment or LC cover
from new customers. The risk to us and to UK exporters in general
is that companies that are otherwise sound and profitable may
be put at risk by factors that are essentially beyond their control."
"We opted some time ago to have a tracker
account into which we would put regular deposits and keep this
to cover bad debt. We have depleted our savings to fund a shortfall
in working capital during a particularly expensive period and
we now need to build this fund back up again. We chose to do this
because of the high cost of insurance and the fact insurers are
not prepared to cover all customers. We hear from suppliers and
others in our sectors that insurance companies are being ever
more selective in the companies they will cover and premiums are
continuing to rise for a lower level of cover".
GOVERNMENT HELP
Whilst much has been written about increased
help for exporters and help in general most companies are still
unsure of what is available in terms of additional funding or
credit for investment. They are unsure whom to approach in order
to find out and the whole area is too complicated and lacking
in resource. If a source of help is identified the bureaucracy
involved in applying for funding makes any gain worthless.
Suggestions on how the government could help
include:
— Provide underwriting to established credit
insurers to enable risk to be shared.
— Re-introduction of financial help to
assist participation at overseas trade shows.
— A tax reduction on any profits generated
from overseas business in order to actively encourage companies
to export.
— Provide a linked network of fully translated,
internationalised websites for individual sectors, perhaps based
on regional Cluster Groups.
— Provide cheaper access to an online overseas
credit checking service.
HELP IN
ACCESSING NEW
MARKETS
Members feel that the focus on new and emerging
markets is to the detriment of strong and potentially safer more
lucrative markets such as Europe and the USA. Consideration should
be given to re-targeting the initiatives in this area. The structure
of OMIS, one of UKTI's key services promoted by International
Trade Teams, should be reviewed—its upfront payment without
guaranteed return makes it an unattractive commercial proposition
to many companies.
8 April 2009
| 
