Scotland ‘lags behind most other countries’ in international trade

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Scotland lags behind most other countries in terms of international exports, a new report has stated, adding that raising overseas sales to the same level of the UK would bring a £12 billion boost.

Exports were worth £76 billion to Scotland in 2016 - a drop of £3.9 billion on the previous year.

Whisky is one of Scotland's biggest exports. Picture: PA

Whisky is one of Scotland's biggest exports. Picture: PA

Almost £46 billion of Scottish exports went to other parts of the UK while international sales netted nearly £30 billion.

Research by the Scottish Policy Foundation (SPF) and the Fraser of Allander Institute indicated that “in terms of international trade, Scotland lags behind most other countries”.

While the Scottish Government set a target of increasing international exports by 50 per cent between 2011 and 2017, it reported these had risen by about 24 per cent between 2010 and 2016 - the latest year for which figures were available.

When looking at exports as a percentage of GDP, it said “Scotland currently exports a lower share of its overall output abroad than the UK as a whole”.

The report added: “If Scotland was to export the same amount as the UK internationally, this would be equivalent to an extra £12 billion in Scottish international exports.”

It described Scotland’s current performance in terms of exports as being “mixed”, saying while a “significant proportion” of output is sold to other nations, “this tends of to be concentrated in just one market - the rest of the UK”.

It stated: “In terms of international sales, Scotland does less well.”

Increasing exports to the rest of the world by 5 per cent could grow GDP by 1 per cent and employment by 0.9 per cent in the long run, it indicated.

The increases were calculated using a new multi-sector macroeconomic computer model of the Scottish economy, which was commissioned by the SPF to help think tanks evaluate the impact of policy ideas.

A 5 per cent increase in exports could “reflect a situation whereby a new trade deal was struck with a country, which reduced trade barriers on Scottish exports”.

If such an increase was achieved, it would also stimulate migration to Scotland and investment, with the research finding “all sectors in the economy benefit over the long run”.

However, it added that one “barrier to increasing Scottish exports is the relatively small number of companies that export” - with the Scottish Government having estimated more than half of the country’s exports come from just 70 firms.

SPF director Alison Moore said: “It is clear from the research that the Fraser of Allander Institute has carried out for us on Scotland’s export market that more analysis is needed on how Scotland can expand its export base.

“We are hoping that today’s release of this new research will act as a catalyst for think tanks in Scotland to develop policy ideas and test their effectiveness on the economy as a whole using SPF’s macro-economic model.”

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