Being born in Bruges, the relevance of bilateral trade has always seemed normal to me as its beauty and the signs of its middle ages’ wealth are still very much apparent today. Bruges has many streets and quarters called after its original residents – English Street and Spanish Street e.g. where the merchants from all parts of Europe used to live and trade with each other, long before the emergence of the nation states. My parental home was owned at some point and lived in by several ‘foreign’ merchants – and probably less relevant in this case, even an English Reverend. Wool was shipped from Beverley in Yorkshire where I live now to Bruges and Flemish bricks were sent back on the returning boats which needed ballast. Flemish weavers turned wool into cloth which was then sent to Italy and beyond. It did not make the people of these different places any poorer, quite on the contrary. A French queen once complained on her visit to Bruges that this was the only place where the local ladies were better dressed than herself.
And the same can be said today. As small countries, Belgium and Luxembourg depend heavily on exports and many of the companies I meet export often more than 90% of their production as the domestic market is simply too small to survive. Vice versa, Belgium and Luxembourg also import lots of goods, mainly from their neighbours such as Britain and they add value before exporting them again. The only way any country without any substantial natural resources can become wealthier, is by attracting foreign investment and by exporting. Bilateral trade is hence crucial to achieve our other aims such as creating a fairer society where we can look after the weak and old, where we can give our children the best education and the best chances in life.
Naturally some countries are better or more efficient at producing certain goods or services than others. Sometimes they have gained this advantage over time or sometimes it has historical or cultural reasons. German cars, French cosmetics, British creative industries, American smartphones and so on. This is great news as bilateral trade allows other countries to buy the best or more efficient products and services from each other which can only benefit us all.
Bilateral trade remains as relevant in today’s quickly evolving technological world. Start-ups actually get involved much sooner in bilateral trade than traditional industries as they expand internationally within a few years – sometimes less – all over the world, setting up shop in different continents. This is a fantastic, relatively new phenomenon and it also shows that physical barriers like crossing the North Sea on a sailing boat are becoming less relevant.
Bilateral trade is not only a B2B affair. The internet has made it possible and much easier for it to become B2C – think Amazon, Apple and Samsung – or even C2C. Great Britain is particularly apt at the latter. Using platforms such as eBay have turned ordinary Brits into bilateral traders working from their kitchen table and although not officially registered, it now accounts for a huge part of British exports to other countries.
All the above show that bilateral trade is good for everyone – from the employees, their families to the company’s shareholders and ultimately the government tax revenues.
It is therefore primordial that the current isolationist and protectionist forces which potentially will be unleashed in different countries and regions are not taking over. People have and will always trade, it is simply part of our genes and suppressing it, will only temporarily work. Iran and South Africa suffered embargos for perfectly legitimate reasons but it only made their people more determined in finding creative ways to trade. And trade they did.
The same will happen with regards to Brexit. Whatever our politicians will come up with, I am happy to bet – and I am not a gambler – that bilateral trade between our countries will not only survive but continue to thrive. After all, it has done so for the last 1000 years.
This piece was written by Michel Vanhoonacker Belgian Luxembourg Chamber Of Commerce Chairman. The Golden Bridge Awards 2016, held to celebrate and recognise those who succeed in trade between the UK and Belgium, winners were announced recently, click to here read who won.