Trade Horizons’ Market Entry Blog

The UK has signed a free trade deal with Australia since leaving the European Union. It was the first free trade deal to be signed. It is expected to increase trade with Australia by 53% boosting the economy by £2.3 billion. Australian exports already support more than 100,000 UK jobs and demand is expected to grow by 30% over the next decade. UK food and drink exports to Australia will be tariff free. Biscuits, whisky, gin and cheese are expected to grow in demand due to high quality UK produce. Australia is already the 8th largest market for UK whisky exports.

The UK’s National Security and Investment (NSI) Act came into force in January of this year and has since blocked FDI not only to do with transactions but licensing, as in the case of a robotics technology developed by Manchester University and attempted licensing by Beijing Infinite Vision Technology. Business minister Kwasi Karteng issued a final order on the attempt by the Chinese company to license the sensing technology called SCAMP 5 and SCAMP 7 citing security risks. This was the first case of a blocking and did not apply to a transaction but licensing so the legislation has further reaching scope than one might think at first sight. It blocked the licensing stating that the technology could be used in defence applications although the Beijing company said it was to be used for children’s toys.

Investment Monitor says that FDI in the chemical sector is slow to recover after the pandemic with other sectors gaining pace back to pre-pandemic levels faster. The number of chemical projects in Asia Pacific dropped by 27% in 2020 compared to 2019 but regained in 2021, still slightly down on 2019 pre-pandemic levels. Western Europe and Asia-Pacific account for half of global chemical FDI. China overtook US as the leading country to attract inbound investment into chemical projects but UAE is the fastest growing region. Manufacturing sector accounts for two thirds of operations for chemical use.

Supply chain issues caused by the pandemic touched every area of business and personal lives. GlobalData created the supply chain vulnerability index map showing US as most vulnerable and Germany as least vulnerable. GlobalData is headquartered in the United Kingdom so that should clear up any doubts about independence. The UK is apparently somewhere towards the lower end of vulnerability. Since the pandemic we have seen nations wholesale decoupling their supply chain from China to avoid overreliance on it and a repeat of the troubles during COVID.

A new study has shown that projects that mention Environment, Social & Governance are driving FDI at an increasing rate across the globe. Sustainable investing can bring about sustainable development especially in emerging economies. Usually, the result of FDI is a degradation of natural resources or ecosystems. The race to net zero brought about by climate change research resulting in organisations and countries committing to reduce their damage to the atmosphere and environment has accelerated DI as it gives the world a new topic to develop and invest in. GlobalData’s Company Filings Analytics Trends & Signals Q1 2022 report measures mentions of the UN’s Sustainable Development Goals (SDGs) in FDI projects which was 23% higher in 22Q1 that 21Q4.