FSB Article – International Trade 2025

The UK’s aspiration to become an export-led economy can’t turn into a reality without small businesses, which account for the majority of UK exporters. While larger businesses have the resources and bandwidth to overcome trade barriers, small firms often don’t have a dedicated team they can lean on to navigate international markets. That’s why government resources, such as signposting, guidance and helplines, are so important to them.  

There are a number of government export support programmes on offer. While it’s disheartening to see the level of SME knowledge and engagement with these resources isn’t as high as we would like it to be, this also highlights the tremendous opportunities these support services could bring to small exporters, if awareness building and delivery of support are done correctly.

SME Export Taskforce 

Against the backdrop of rising costs, new customs and product safety requirements and potential changes deriving from the US election, small businesses still show an undeniable zeal for international trade. 

In autumn 2023, the Labour Party invited the Federation of Small Businesses (FSB) to lead and run an SME Export Taskforce, convening key businesses and organisations to put forward a set of fresh policy recommendations for the next UK Government that would secure a measurable increase in the number of UK SMEs exporting. The recommendations are actions the UK Government has the power to undertake on its own – and so are in addition to its negotiating positions on the review of the Trade and Co-operation Agreement with the EU, due in early 2026, and any prospective trade deal with other nations.

In roundtable sessions held between January and March 2024, the SME Export Taskforce brought together SMEs, finance providers, large corporates and business associations across the UK economy. Participants shared their experiences of international trade and ideas on improving the exporting journey for SMEs, proposals that were then tested and finessed into a set of key asks. The resulting recommendations fall into five priority areas that reflect the challenges, opportunities and suggestions raised throughout these sessions. 

The challenge

The growth opportunities for the UK economy from SME exports are huge. SMEs that export are more likely to grow – and more quickly – and be more resilient in times of economic difficulty than those that do not. There is also a clear benefit to the UK for our SMEs to tap into economies that are rapidly growing, when the domestic economy is facing greater challenges. But with just over 10 per cent of SMEs across the UK putting their products and services to market overseas, according to the Department for Business and Trade, the UK is not yet reaching its full potential.

The challenges and barriers identified by the taskforce indicated a tendency towards a non-strategic approach to international trade among many of the UK’s SMEs and within historic government policy, leading to:

• A regulatory and policy environment that should do more to remove burdens on SMEs.
• A government export support offering that can be difficult to navigate and may not always meet SMEs’ needs.
• Low numbers of SMEs with export potential participating in international trade, and an ad hoc rather than strategic approach to exports among those that do. 

The taskforce is positive that, with the right approach to policy and support, many more SMEs can be empowered to start or increase their trade activity. A holistic approach that creates the right environment for international trade is needed, including recognition of how the government and a diverse private sector can complement each other to deliver the best possible conditions.

Five export priorities

To supercharge SME exporting, the taskforce recommends:

1. A cross-Whitehall approach to policy: embedding trade across all relevant government departments, from a ‘quality-not-quantity’ approach to free trade agreements, to an international competitiveness ‘filter’ applied to policy design.
2. An open relationship with business: an open, honest and two-way approach to shaping legislation and trade deals and delivering government guidance effectively.
3. Global leadership on digital trade: leading the way on delivering the benefits of paperless trading across the whole supply chain.
4. Open to export from day one: delivering a robust export support offering that meets SME needs and tackling attitudinal barriers to trade.
5. Addressing the finance gap: improving SME access to trade finance and reducing the financial barriers to trade.

New FSB research shows that more than a third of small exporters seek international opportunities. Our research found:

• Nine in 10 small firms believe exporting is important to the overall economy and growth in the UK over the next 12 months.
• Information on customs issues are among the most beneficial tools for market entry.
• The trade strategy and small business command paper must align with small firms’ strong zeal for exporting.

Our research also found that small firms have a strong appetite for international trade despite rising costs, new customs and product safety requirements and potential changes from the US election. In addition: 

• Most small exporters (61 per cent) are considered as ‘passive’ exporters, meaning they trade internationally by reacting to enquiries from overseas customers. In contrast, more than a third (35 per cent) of small exporters actively pursue international opportunities.
• Current small exporters ranked information on specific issues (for example, customs) (37 per cent), visiting target market (35 per cent), and financial support for specific activities (for example, trade fair, translations) (31 per cent) as the three most beneficial sources when entering or exploring entry to a new market.
• Almost half of current and would-be exporters (49 per cent) see knowledge of local regulations as key to increase their competitiveness on market entry, while four in 10 (42 per cent) view low delivery costs as key.
• More than a third (36 per cent) say they want support to answer specific queries – for example, how to issue an invoice to an overseas client or apply local VAT.
• Despite a suite of readily available government support on export, not all of them are known by small firms.
• Eight in 10 current and former exporters say they are not aware of support provided by the Export Academy, a free online training programme for exporters, while a similar proportion say they don’t know about the government’s platform, GREAT.gov.uk, guidance or events (76 per cent). 
• Seven in 10 (72 per cent) are unaware of the Export Support Service, a helpline and online service where businesses can get answers to practical questions about exporting. More than half respectively have not heard of services provided by overseas offices under the Department for Business and Trade (53 per cent) and international trade advisers (58 per cent).  

The FSB has put forward a package of recommendations to enhance existing government support for ambitious and aspiring small exporters, including:

The Secretary of State for Business and Trade should:

• Ensure the voice of SMEs is strongly represented in the development of policy to give more long-term strategic planning to SME exporting.

• Take a ‘think small first’ approach to export support and set new export targets that focus on SME growth, moving away from an overall value target, including growing the number of SME exporters to 20 per cent by 2030.
• Publish a clear timeline for business consultation when developing the trade strategy, including evidence sessions with SMEs.
• Integrate GREAT.gov.uk content under the Help to Grow umbrella to create a single business growth support hub.
• Convene a cross-departmental working group with HM Revenue and Customs (HMRC) and UK Export Finance (UKEF), plus external partners, to deliver greater cross-referencing and signposting between government resources.
• Expand the number of in-country attachés for high-growth sectors in priority markets and facilitate business contact with in-market resources.
• Require international trade advisers to hold a qualification from an accredited customs training provider, or equivalent professional experience, and explore restructuring the network to allow SMEs greater choice in working with sector or market specialists.

More information and resources on this issue can be found on the FSB’s International Trade Hub.