At the forefront of Trade and Working Capital At the forefront of Trade and Working Capital

Economic and political landscape beyond. Slowing growth is likely to affect the US, Trade political and as well as other large trading economies including Overall, 2018 marked an eventful year for the economic landscape 2019 China, France, Germany and the UK. trade landscape. It was defined by a shift towards Opportunities protectionist policies in some markets, the Opportunities amid uncertainty outbreak of a trade war between China and the Trade wars Changing global supply chains The combination of trade wars and protectionist US, and the UK’s preparations for its anticipated Disruptive trade relationships Countries set to benefit from import policies are set to change the nature of the may lead to changing tariffs substitution as a result of trade wars departure from the European Union (EU). and trade agreements global supply chain landscape going forward. At the start of 2019, the economic and political Some countries, especially fast-growing Asian climate remains uncertain for trade, although economies such as India, Malaysia, the Philippines NAFTA Emerging Markets it also presents some exciting opportunities for and Vietnam, will benefit more from the US MCA trade deal Opportunities for fast growing Asian economies and further exporters. The World Trade Organization has disruption than others. Intra-Asia trade is likely growth intra-Asia trade forecast that trade growth will slow to 3.7% in to grow during 2019 and more domestic supply 2019, down from 3.9% in 20181. This is largely chains may also emerge. down to the on-going trade tensions, as well as In 2016, the EU bought 43% of all UK exports, the US Federal Reserve’s tighter monetary policy, making it the UK’s largest trading partner2. In Brexit AEO which sparked volatility in the financial markets theory, Brexit could create some significant new Change in the UK’s Organisations that have AEO during the last quarter of 2018. role as a trading status have a substantial trading opportunities for the UK, however, since partner to the rest of advantage in recognition when the world looking to diversify or expand their So far, the China-US trade war has had a fairly there is high demand for British goods and international trade. limited effect on exporters. This is mostly because services overseas. Research by Barclays has found pre-emptive purchases were made ahead of the that international consumers are prepared to UK export agenda INCOTERMS Studies conducted, Brand Changes to INCOTERMS, implementation of tariffs, however. As a result, pay up to 22% more for British goods because Britain report 2018, and due to come into force on the Superstar exporters, 2018, 1st January 2020 3 businesses are likely to start feeling the real shock they believe them to be of superior quality . This indicate opportunities for UK exporters through this of protectionism in the first quarter of 2019 and was especially true for consumers in Asia and uncertain time.

2 of 5 the Middle East – 64% of Indian consumers Innovations in were prepared to pay more for British goods, for Trade Finance example, with 57% of Chinese consumers and The key three themes that will 48% of consumers in the United Arab Emirates The key drivers for sustainable trade: 4 be a focal point for 2019: saying the same . Regulation Reputation Commercial In its Brexit strategy, the government has Policy amendments Stakeholder Key differentiator emphasised that the UK needs to build closer The regulatory guidelines engagement Are your products and services trading relationships with non-EU countries. are evolving. Businesses who Your sustainability story is an futureproofed? It could help Sustainable trade understand and prepare for you to set yourself apart from important part of our business Barclays is partnering with UK Export Finance these changes will be in a reputation – customers, the competition. stronger position to benefit. colleagues, suppliers and (UKEF) to support thousands of businesses regulators are all interested in it. Are you clear what it is? each year to export their goods and services.

000000100100 Additionally, it is working with the Policy Institute, 1010000101110 King’s Business School and the Entrepreneurship 1000101110101 Digital Digital trade Docusign 0101110000101 Robotics Institute to look at how the UK can improve 0101110101110 platforms 0111001110111 its export performance. It has published three working papers – Towards a culture of exporting: Replacing passwords with more sophisticated identity check Aggregating and analysing news, social media and regulatory data, How to help UK exporters do more and do better5, system that uses data points such as swiping and typing behaviour, and applying machine learning to exact relevant information to face recognition, device and location. Algorithms can monitor inform decision-making Developing ‘superstar’ exporters in the UK: A deviations from normal patterns to distinguish between genuine Artificial intelligence user fraudsters. review of the evidence6, and Delivering economic Using historical customer service transcripts to give fast, accurate Automating banks’ fraud prevention process, quantifying risks, growth through exports7, which looks at how and out-of-hours responses, improving customer satisfaction, extracting insights from markets and tailoring financial products to including the use of chatbots to save money on contact centres by customer needs. barriers to exports can be reduced or removed. reducing call volumes. To thrive post Brexit, UK exporters should look to acquire Authorised Economic Operator (AEO) status. An AEO accreditation is an internationally recognised mark of quality that demonstrates that an exporter has a secure role within the international supply chain, as well as compliant

3 of 5 and efficient customs controls and procedures. Trade transactions typically consist of a number of component parts, which slows down the Another significant development in the trade innovation process. Nevertheless, the digital landscape is the new set of Incoterms that will landscape for trade will increasingly be shaped come into force on 1 January 2020. Incoterms, by new initiatives. An example is the TradeLens which are a set of rules published by the Blockchain Shipping Solution8, developed by IBM International Chamber of Commerce, define and Maersk. This solution promotes more efficient the responsibilities of buyers and sellers for the and secure global trade by bringing together delivery of goods under sales contracts. The new all the parties involved in the trade process to rules will be simplified, making them easier for support information sharing and transparency new entrants to understand. and to spur industry-wide innovation. Innovation in trade Barclays is heavily involved with innovation in the Innovation within trade mainly relates to the area of sustainable trade and launched its first digitalisation of the trade process itself and a Green Trade Loans9 in 2018. These loans can be focus on green and sustainable trade. used to fund working capital for green activities such as making energy efficiencies, investment Today technology is disrupting every business in renewable energy resources and sustainable activity function, reducing friction and cutting waste management. Barclays is also working with costs. The digitalisation of trade is being driven UKEF to support green trade loans for exporters. by technologies including blockchain and other digital platforms; software that enables electronic To find out more about how you can support signing of documentation; artificial intelligence; your business to trade internationally in an era of optical character recognition; and robotics. Banks economic and political uncertainty, and to learn and corporates are using these technologies to about the latest innovations in trade, speak to automate processes and increase speed to market. your Barclays Relationship Director.

4 of 5 To find out more about how you can support your business to trade internationally in an era of economic and political uncertainty, and to learn about the latest innovations in trade, speak to your Barclays Relationship Director.

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1. https://www.wto.org/english/news_e/pres18_e/pr822_e.htm 2. https://www.ons.gov.uk/businessindustryandtrade/internationaltrade/articles/whodoestheuktradewith/2017-02-21 3. https://newsroom.barclays.com/r/3568/international_consumers_prepared_to_pay_up_to_22__more_for 4. https://www.barclayscorporate.com/content/dam/corppublic/corporate/Documents/Trading-and-Exporting/Made-in-Britain-Report-2018.pdf 5. https://www.kcl.ac.uk/sspp/policy-institute/publications/towards-a-culture-of-exporting-working-paper.pdf 6. https://www.kcl.ac.uk/sspp/policy-institute/publications/superstar-exporters.pdf 7. https://www.kcl.ac.uk/sspp/policy-institute/publications/delivering-economic-growth-through-exports.pdf 8. https://newsroom.ibm.com/2018-08-09-Maersk-and-IBM-Introduce-TradeLens-Blockchain-Shipping-Solution 9. https://www.barclayscorporate.com/products-and-solutions/trade-solutions/green-trade-loans.html

Every attempt has been made to ensure that the information provided is accurate. However, neither Barclays Bank PLC (“Barclays”) nor any of its employees makes any representation or warranty (express or implied) in relation to the accuracy, reliability or completeness of any information or assumptions on which this document may be based and cannot be held responsible for any errors. No liability is accepted by Barclays (or any of its affiliates) for any loss (whether direct or indirect) arising from the use of the information provided. Barclays Bank PLC is registered in England (Company No. 1026167) with its registered office at 1 Churchill Place, London E14 5HP. Barclays Bank PLC is authorised by the Prudential Regulation Authority, and regulated by the Financial Conduct Authority (Financial Services Register No. 122702) and the Prudential Regulation Authority. Barclays is a trading name and trademark of Barclays PLC and its subsidiaries. Item-Ref: BM414275. January 2019.

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