With domestic demand stymied by the continuing slow
recovery in the services sector and the public sector locked
firmly into austerity mode, it is clear that the main driver for
growth in manufacturing has to come from overseas.Paul
O’Donnell, head of external affairs at the Manufacturing
Technologies Association (MTA) comments

While much of the West continues
to be beset by the fallout of the
recession right across the world
there are many economies experiencing
strong growth. The most spectacular is China
with India not too far behind, but countries
like Indonesia and Turkey are growing too.

Even in the more developed world there are
places, like Germany, which are going full
steam ahead – often on the back of strong
exports to the emerging markets.

It is therefore no surprise that British
companies should want to take a piece of the
action for themselves. The good news is that
many of them are doing so; the bad – or
maybe that should be ‘could be better’ –
news is that they are not always able to
compete on a level playing field. The
Government has put export promotion
centre stage in its bid to rebalance the
economy and David Cameron has led high
profile trade missions to China, India and
the Middle East. The Government has also
published a White Paper on Trade which
looks at what can be done to improve
Britain’s performance in this area.

There are two areas of the White Paper
that the Manufacturing Technologies
Association particularly welcomes. The issue
of trade finance is a vexed one with British
companies often at a disadvantage in relation
to their competitors who frequently have
more supportive banks. Problems like Banks’
practice of setting the value of deposits
against existing facilities, while probably not
peculiar to Britain are more widespread here.

The White Paper had some good signs of
progress in terms of the
Banks’ attitudes,
progress that we at the MTA have seen
mirrored in our discussions with Lloyds
Banking Group, an MTA member. The new
products that the sector, led by Lloyds, is
working on, if – and it is a big if – properly
implemented, may make a real difference to
smaller firms who struggle with trade
finance.

The other area where progress seems to be
being made is in relation to the Export
Credit Guarantee Department – the
Government agency that should step in
when commercial sources of finance prove
hard to find to back deals. Industry has long
complained that ECGD has not been
performing this function and has had far too
narrow a focus on a single sector – aerospace,
writing over 90% of its business there. It was
a theme that the MTA’s director general,
Graham Dewhurst, struck when he appeared
before the House of Commons Business
Select Committee in late January and we
were pleased that his criticisms and those of
others seem to have been taken on board
with a strong looking set of reforms
proposed to widen ECGD’s remit and
encourage more businesses to use them.

It’s not just in Westminster that the MTA
has been making its views known on trade
policy. Through our offices in China and
Russia, as well as through our partner
associations in Brussels, we have been active
in promoting British business.We are
leading a mission to China in April centred
around a UK pavilion at the China
International Machine Tool show and will
take another group of companies to
Germany later in the year. The fact that we
engage in active trade promotion for our
member companies gives our policy
messages greater weight. It is a real example
of where the mix of a trade association’s
activities helps to magnify the message.