New research from the Federation of Small Businesses has revealed the trade deals that smaller firms want to see in a post-Brexit world.
The latest FSB report, Keep Trade Easy: what small firms want from Brexit, shows that the top priority market for small firms is still the EU single market (63%). Nearly half (49%) of FSB members chose the US as a priority market and one in three (29%) named Australia. Other key markets include China (28%) and Canada (23%).
Researchers also polled FSB members about their views on future UK-EU tariffs. One in four (27%) exporting small firms said they would be genuinely deterred from trading with the EU should any tariff - no matter how low - be introduced.
Should the UK find itself trading with the EU under World Trade Organisation (WTO) rules alone, exporters would face the EU's most-favoured-nation tariffs. One in three SME exporters say they would be deterred from trading with the EU if a tariff rate between 2% and 4% was introduced (the range within which the EU's average applied tariff tends to have fallen over the past few years).
The findings also show that small business exporters and importers also find non-tariff barriers (such as administrative burdens in dealing with customs) as important as tariffs.
At present, 58% of smaller firms find the EU single market easier to trade with than non-EU markets; the report also reveals that 45% of current exporters and 53% of current importers find trading with the EU single market cheaper than trading with non-EU markets - compared to only 9% and 8% respectively who find it more expensive.
Mike Cherry, FSB national chairman, said: "Small firms trade with countries based on ease, cost and value and any future trade deal must deliver on these key aspects both with the EU single market and non-EU markets. The reality is that the EU single market is still a crucial market for smaller firms and cannot be undervalued."
Cherry called for a new customs arrangement with the EU that allows for "frictionless" cross-border trade. He said: "The impact of potential tariffs and non-tariff barriers to trade with the EU is shown to be a real concern for small businesses trading overseas, at the very time that the UK economy can least afford to see a slowdown in exports. FSB calls on the Government to secure the easiest and least costly access to the EU single market in the Brexit negotiations."