A Trading Nation: progress review 2022

2. Scotland's export performance since A Trading Nation was published

ATN set out an ambitious target to increase international exports from 20% to 25% of GDP over the next 10 years. Achieving this should increase Scotland's GDP by approximately £3.5 billion and help support 17,500 jobs with an increased tax take of around £500m per annum.

Since publishing ATN in 2019, there have been significant shocks to Scotland's trading environment. From early 2020, the Covid-19 pandemic resulted in many countries implementing rigorous lockdowns and other health measures which disrupted international trade across the world. This led to a 21% decrease (down £7.2 billion) in Scotland's goods exports in 2020^[1].

More recently, exporting businesses have also experienced significant challenges following the end of the EU transition period in January 2021 and the transition to the new trade agreement between the UK and EU since then. Business survey data from the Office of National Statistics (ONS) indicates trading conditions remain challenging for businesses in Scotland, with almost a quarter (23%) of exporting businesses exporting less in June 2022 than in June 2021. Businesses continue to report changes in transportation costs, additional paperwork and custom duties or levies as the main challenges they face when trying to export^[2].

Despite this changing landscape, Scotland's international exports remain at around 21% of GDP. Furthermore, the latest trade data shows Scottish export performance improving and outperforming the rest of the UK. Scotland's goods exports in the year ending March 2022, excluding Oil & Gas, increased by 5.7% compared to the year ending March 2020 (compared to a reduction of 2.9% in the UK over the same period)^[1]. Scotland is the only part of the UK with a positive trade balance in goods with the Rest of the World, exporting £2.2bn more goods than it imported in 2021.^[3]

Scotland's international exports will require significant annual growth over the next eight years to achieve the 25% target and this review sets out the focus for the next phase of delivery.