Nearly two thirds of small firms value EU business over any other - FSB

The poll found that almost two thirds (63 per cent) of the FSB’s UK members regard the EU as a priority market and almost half (49 per cent) of firms asked cited the USA as a key trade destination, with about one in three highlighting Australia (29 per cent) and similar proportions naming China (28 per cent) and Canada (23 per cent).

About a sixth of Scottish FSB members currently export, a slightly smaller proportion of firms than for the UK as a whole.

The study warns that one in four (27 per cent) exporting small firms would be deterred from trading with the EU should any tariff – no matter how low – be introduced.

The new research also discovered more than half (58 per cent) of smaller firms find the EU single market easier to trade with than non-EU markets, with only six per cent saying the opposite.

45 per cent of current exporters and over half (53 per cent) of current importers find trading with the EU single market cheaper than trading with non-EU markets.

Around one in five small exporters trade exclusively with the EU. The study also identifies that non-tariff barriers – such as packaging or transportation requirements – can also pose problems for smaller firms.

Andy Willox, the FSB’s Scottish policy convenor, said: “The UK and Scottish economies cannot afford to see a slowdown in exports.

“FSB is calling on the UK Government to secure the easiest, and least costly, access to the EU single market in the Brexit negotiations. Lots of first-time exporters regard EU markets as a training ground and a lower-risk first step to realising their global ambitions.

“In addition, we cannot underestimate the importance of an arrangement which works for firms which import. Speciality shops and manufacturers need access to global suppliers so they can in turn service their customers. Many of these firms often in turn service UK firms which export.

“Ultimately, this research shows if we want Scottish export volumes to increase then we need frictionless cross-border trade. We’re also calling for greater support for small businesses to reach out to non-EU markets.”

FSB is writing to the Scottish Government and the Scotland Office with details of their findings. The small business campaign has made the case for co-ordinated action from both governments and their agencies to mitigate the impact of any upcoming changes in trading conditions.

Stuart McMillan MSP, member of Holyrood’s Europe committee, said: “These findings demonstrate just how important open trading with the EU is for our small businesses and our economy, and the huge risk the Tories are taking by tearing us out of the world’s biggest single market, which is around eight times bigger than the UK’s alone.

“This research shows that it’s both easier and cheaper for most small UK firms to trade with the EU than other markets, and if any tariffs at all were imposed on small exporters in Scotland then huge numbers would be discouraged from trading with Europe. That would be disastrous for our businesses and our economy.

“Our European neighbours are logically the first port of call for most exporters and importers in Scotland, and yet the Tories have chosen the least sensible option of a chaotic and senseless hard Brexit that will put barriers in the way of vital EU trade and impose prohibitive WTO tariffs on trade.”