$46 billion of trade opportunities to increase US exports to emerging markets identified

NEW YORK, March 13, 2018 – Standard Chartered launches its G7 to E7 Trade Performance Index (Index), which examines the trading partnerships of the G7 with E7 (Emerging Seven) economies – Bangladesh, China, India, Indonesia and France stand to realise the greatest gains if they can fulfil their E7 trade potential. Germany tops the performance table as the only country to currently exceed its total E7 trade potential.

The Index reveals that G7 nations and companies are underperforming in their export trade to
the E7. Of the 49 trade routes between individual G7 and E7 countries, only nine currently
exceed or meet expectations. The remaining 40 trade routes underperform by a total of
billion against their export potential. This constitutes a 30% annual growth opportunity for the G7
to the E7. The E7 represent a critical highway to future growth for the G7 in 2018 and beyond.

US Opportunities

The US stands to realize some potential. It is currently the largest exporter to the E7 overall, but potential by over a quarter (28.3%).

By trading more with emerging nations, the US equivalent to an extra US$46.1 billion a year markets, but most significantly in China, India, Indonesia and Vietnam.

G7 to E7: The Standard Chartered Trade Performance Index

Michael Vrontamitis, Head of Trade for Europe and Americas, Standard Chartered: “With
membership of the G7 no longer being a passport to growth, the Standard Chartered G7 to E7
Trade Performance Index reveals real growth opportunities. Every G7 nation has much to gain
from accelerating their export performance in the seven economies we have identified as the
Emerging Seven (E7).

“Our Index reveals that if G7 economies reorient their trade strategy towards the E7 the size of
the prize is an additional US$162 billion annually, with an immediate 30% gain. It is clear the E7
represent multi-billion dollar trading opportunities for G7 governments and businesses searching
for export diversification and growth. Companies should develop sector specific strategies and
corridors, then identify how they can increase their opportunities there.”

Key Findings:
UK
UK exports to the E7 could potentially increase by US$16.9 billion to US$64.9 billion
when the country leaves the EU. While the EU remains a critical trading partner, UK
businesses could capitalise on export opportunities with all E7 countries.
USA
The US is currently the largest exporter to the E7 overall, but it is falling below potential
by over a quarter (28.3%). If the US makes the most of all E7 trade, total exports would
rise by 3.1% – an extra US$46.1 billion a year.
France
France has much to gain from trading with the E7. It is exporting a quarter less to the E7
than its potential and could grow overall exports by 2.4% by meeting predicted exports to
the E7, representing a US$12 billion-a-year uptick.
Italy
Italy could experience a 2.5% uplift in exports, or US$11 billion annually, if it makes the
most of the opportunities in the E7. The Italy to China route could see an extra US$7.3
billion of annual trade – the fourth biggest economic opportunity of all 49 trade routes.
Japan
Japan has significant opportunities in the E7. Japanese businesses could increase
exports to the E7 by US$69 billion, which would give the entire economy a 10.7% boost.
The Japan-China trade route has the biggest G7 to E7 opportunity by value.
Canada
Canada takes current second place in the G7 to E7 trade race, but it falls below
predicted trade by more than a quarter (28.6%). Its annual total global exports could
grow by 1.7% by maximising on E7 trade.
Germany
Germany is the greatest G7 to E7 success story. It exceeded its total predicted value of
trade with the E7 – exporting US$109 billion – double what is predicted. However,
Germany could be at risk of over-reliance to one market – China.

Index & Methodology

G7 to E7: The Standard Chartered Trade Performance Index reveals the size of G7 goods
export opportunities in the seven identified emerging markets — Bangladesh, China, Indonesia,
India, Nigeria, Pakistan and Vietnam — coined the E7, representing a total of 49 exporting
relationships. It does so by incorporating key export considerations – including market size,
geography, cultural variables and regional trade status – into a gravity trade model. This model
reveals annual total export potential for all 49 exporting relationships.

Given current exports levels, the difference was calculated between potential and actual
exports. A positive difference indicates export opportunity for a given G7 country. These
opportunities are ranked based on standard deviation from the mean.

The consequences of Brexit for UK exporters were considered by controlling for membership t
the European Union and leaving all other things equal. This enables the development of a
model of UK export potential to each E7 market with and without EU membership. The model
excludes assumptions on potential Brexit outcomes, trade negotiations and any UK specific
deals. It reflects only the trade-diversion that takes place from being inside the EU customs
area. The model can be applied to any EU country and is not specific to the UK.

Note to Editors:

Standard Chartered partnered with Oxford Analytica, an independent macro analysis
consultancy to conduct the study.

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Standard Chartered

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