The World is Our Market
Publication
The Empire Club of Canada Addresses (Toronto, Canada), 25 Apr 1968, p. 435-446
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Abrahams, Gerald M., Speaker
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Text
Item Type
Speeches
Description
International trade as the basis of world economy. Market research as the key to success in any market, new or old, at home or abroad. The position in the United Kingdom. The speaker as a member of the "new British school" with a belief in letting everyone know just how efficient and modern Britain really is. Indications through exports of this efficiency and modernity. Other ways that Britain seeks to earn her living in the markets of the world; those of an intangible nature. Details of these invisible earnings. Reasons for Britain's economic difficulties. Three points relevant to what the speaker has said about Britain's ability to compete in world markets. Details of what Britain is doing to compete in world markets. Business the new British way.
Date of Original
25 Apr 1968
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English
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The speeches are free of charge but please note that the Empire Club of Canada retains copyright. Neither the speeches themselves nor any part of their content may be used for any purpose other than personal interest or research without the explicit permission of the Empire Club of Canada.
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Full Text
APRIL 25, 1968
The World is Our Market
AN ADDRESS BY
Gerald M. Abrahams, C.B.E. CHAIRMAN OF THE BOARD OF AQUASCUTUM
CHAIRMAN
The President, Graham M. Gore

Traditionally, of necessity, Britain is a trading nation. From this island hub, lanes of trade routes extend to all parts of the world, and along these routes flows the vital traffic of commerce on which Britain's economic well-being depends.

To compete successfully in the world's markets, Britain has established a reputation for excellent design, reliability, and craftsmanship in her manufactured goods, and many British brand names have become synonymous with quality the world over.

This is particularly true of British-made clothing, and today we are pleased to welcome one the leaders of that industry as our guest speaker. He is Mr. Gerald M. Abrahams, C.B.E., of London, England, who is Chairman of Aquascutum & Associated Companies Limited and a Director of that organization's branches in Canada and the United States. ("Aquascutum" is, of course, the wellknown brand name of a quality line of British rainwear.) To give him that spirit of buoyancy and optimism which we wish him to have particularly while he is here in this vibrant city with its rapidly expanding economy - we have provided a climate, today, which encourages the purchase of his excellent raincoats.

Mr. Abrahams is also a director of a number of other companies overseas, including Albion Products Ltd., Empire Furnishing Co. Ltd., and Rodex of London Ltd.

A prominent participant in the industrial life of Britain, he is Chairman of the Clothing Export Council, VicePresident of the Clothing Institute, and a Member of the Council of the Confederation of British Industry, the Clothing Manufacturers' Federation of Great Britain, and the Committee for Exports to Canada.

He was born in London, England, on June 20th, 1917, and undertook real estate training in 1935. The following year he commenced as a trainee with Aquascutum Ltd. and worked through all departments until the outbreak of the Second World War in which he served with the artillery and attained the rank of major.

Following the war he returned to Aquascutum and was made Director and became Chairman in 1947. He is married to the former Doris Cole of Brookline, Massachusetts, and they have two daughters.

His topic today is "The World Is Our Market", and I am pleased to invite him to address us at this time. Mr. Abrahams.

MR. ABRAHAMS:

I am delighted to be with you and having seen the list of some of the eminent men who have addressed your gatherings in the past I am very conscious of the honour you have paid me by inviting me to be your guest to speak to you today.

It is particularly pleasing - and also reassuring - to think that I am, in a snese, following in the footsteps of that great Englishman and patriot, Sir Winston Churchill.

However, unlike such great men I am just an ordinary business man, but I have the honour to be a member of the British National Export Council for Canada, which is dedicated to increasing trade from Britain to Canada and which played such a big part in organizing the successful British Week, Toronto last fall, and Chairman of the Clothing Export Council of Great Britain which is helping increase British clothing exports. Our industry has achieved international fame by its leadership in menswear and by its revolutionizing of women's fashions which has not only stimulated the trade everywhere, but has made it fashionable for more of the female form to be seen than ever before. In Canada, however, I feel at home as a manufacturer and employer of Canadians, who is devoting his time to bringing sunshine into everyone's life by making beautiful clothes for them to wear and by exporting to the U.S.A. earning some valuable foreign currency into the bargain. I find work for industry generally and international trade in particular a most fascinating part of my business life, but please understand that any views I express are my own personal ones and do not necessarily reflect those of British business generally, and whilst I have a number of politicians whom I regard as friends I certainly do not represent their views.

But I do want to talk about international trade which is the basis of world economy. Taking our British position, we have got to get out and sell for we have almost no raw materials and only half our food and our very existence depends on trading with other countries. We have to rely on our inventiveness, our know-how and our skill in manufacture and on being that much better at producing things than the next man. Sometimes we have to persuade people to buy things that they make themselves and that they do not particularly need - we usually do this by adding something.

The key to success in any market, new or old, at home or abroad, is, of course, market research, in which I am a firm believer. This is time, trouble, attention, work, but it is the basis of succesful trading. You must get to know the people you are to do business with and understand their needs and plan your products accordingly, and they must know as much as possible about you.

But what's our position in the United Kingdom? Some ill-informed people abroad seem to think that our skills have deserted us, that we are washed up and generally on the way out. Our own critics at home have subscribed to this image by publicly attacking our industrialists and business men for being inefficient, stuffy, lazy and stickin-the-mud. So many of our friends abroad have come to think of England as merely the land of Beefeaters, the Tower of London, Trooping the Colour and the place you stop off at the end of your European tour to collect your antiques before going home.

All these images are, of course, entirely false ones and the fact that they persist in some people's minds is, I think, largely our own fault for not doing something about it. It is one of our better known characteristics to be reticent about our own achievements and to dislike blowing our own trumpets. We are in Britain absolute masters of the understatement, we shrink from superlatives and even when we hit the jackpot - which we do quite often I may say - we are loath to admit it. So it is not surprising if people get the wrong idea.

1, however, belong to the new British school and I believe in letting everyone know just how efficient and modern we really are. Although we are one of the smallest, we are one of the most heavily industrialized countries in the world, the world's third largest trading country, the world's second largest importer and third largest exporter. Last year our exports and re-exports to all parts of the world totalled some 13,000 million dollars, an average of over 35 million dollars every day of the year, including Sundays - hardly the performance of a country on the rocks. We are the world's largest exporter of agricultural tractors, commercial road vehicles, vacuum cleaners and washing machines, pianos, cycles, caravans, telegraph and telephone equipment, radioisotopes and of woollen cloth and cotton yarn and thread.

Of course, we provide the world with a lot of other things as well. Scotch whisky of which we exported $317 million worth last year; pottery and china; jewellery; gold and silverware in the design of which our craftsmen have acquired international renown and, of course, a wide range of textiles and clothing. These are just some examples taken at random from the very long list of goods we export all over the world which I could tell you about. And to show you how enterprising we are - we didn't only bring you the mini-skirt for your entertainment, we did it for the money as well - and I can also include sootblowers to Saskatchewan, Sauerkraut to Germany, crossbows for the U.S.S.R., rubbish to Switzerland (for compression into material for building blocks) and false eyelashes to over 60 countries.

So you see that far from being an outdated country living on its traditions, we are very much alive and in the forefront of world trade. Were this not so we should not be in the position today of exporting annually over $1,700 million to the U.S.A. - that most efficient of all manufacturing countries and our largest export market.

But these, of course, are all visible exports - tangible objects that one sells for cash - and it is not by these alone that Britain seeks to earn her living in the markets of the world.

Side by side with our visible trade we conduct a host of overseas operations of an intangible nature covering banking, insurance, shipping, air services, tourism and all the intricate and highly skilled services provided by the City of London. These are things we do rather well because we invented most of them and we have been doing them for a very long time.

These invisible earnings, amounting last year to over $7,500 million, make an invaluable contribution to our overseas balance and, are, in fact, growing faster than our visible earnings and for many years have shown a net balance of credits over debts.

Incidentally, while Monsieur Le General is busy explaining why our economy is too rocky to make us a desirable member of the Common Market, Frenchmen who want to raise money or take out insurance come to London because they cannot get it in Paris and I am told there have been one or two occasions when sterling has gone into the world market to prop up the French franc. But, I love France and the French people and I am sure that one day we shall really get together.

Yes, I know what you are thinking. If we are such a modern, sophisticated, technically advanced nation, how is it that during the last few years we have got into such horrible financial difficulties that we have had to devalue our currency and that as recently as last month our Chancellor of the Exchequer presented a Draconian budget which took an additional $2,400 million out of the private sector. Well, as every economist and planner has already tried to explain what has gone wrong I am not going to go over the whole thing again. But I can give you the real reason for our difficulties. It is that the country is run by politicians and not businessmen. This is, of course, what's wrong with most countries. Politicians have shown time and time again that they do not understand how business or the economy works. So is it surprising that they make a nonsense of balancing our books and base their economic policies on completely erroneous premises?

I do not pretend to be an economist and I have no intention of pointing out to the Government what they should do to get over our apparent difficulties - they wouldn't pay any attention if I did -but there are just three points I should like to make because they are relevant to what I have said about our ability to compete in world markets.

The first is that the gap between what we buy and what we sell abroad when compared to the total volume of trade carried on during the year is really minute. A deficiency of $520 million in relation to $44,200 million, which was the total of overseas transactions during the year, is, if my mathematics are correct, a little over 1 % and the adjustment we need to make is, therefore, not very great. It's actually less than our debit balance with Canada and if we could only get you good people to spend a bit more money in the United Kingdom instead of in the United States we should be in the clear.

The second point I want to make is that it is utter nonsense to put the blame for our difficulties onto the failure of private traders to do more business abroad. It is often said at home that to get our balance of payments straight we must export more, implying that it is our fault that we are in the red. But the fact is that over the nine years ending 1966, during which our two-way trade with the world amounted to over $260,000 million, our trade in goods and services showed a surplus - a small one it is true, but a surplus nevertheless. It was massive Government expenditure - every country's problem - and nothing to do with any shortcomings on the part of British industry that resulted in a debit balance.

My third point is that far from being discouraged by the extent of our participation in world trade in recent years we have every reason to congratulate ourselves on what has been a remarkable performance.

Whereas before the war, we were only paying for two thirds of our imports by our normal export earnings and had to rely on the income from our investments to pay for the rest, we are now paying for over 95%. And we are doing this, in the main, by selling in the markets of Western Europe and North America where competition from domestic manufacturers and other exporters is fiercest. In short, we are competing successfully in the top league and taking a leading part in the growth and development of world trade. Of course, we are not blessed with the enormous advantages which you enjoy here in Canada. We are not sitting on top of a great treasure trove of natural resources where you cannot dig a hole without running into silver or copper, uranium or potash, or getting a squirt of oil in your eye. Nor do we have the room to grow miles and miles of wheat which we can ship to a hungry world and we have not got millions and millions of trees which we can chop down and turn into cash. Apart from some coal which is rapidly becoming obsolete as a means of generating heat and power and an unknown quantity of natural gas in the North Sea we are singularly ill-endowed by nature. So it is not really surprising if we look at you with a certain amount of envy. Nor it is surprising that we look on you as a highly desirable and potentially lucrative market for our products. After all, we speak the same language more or less, and the majority of us have the same background with family ties going back for hundreds of years and there is a long tradition of close relations between our two countries in war and peace. We have been trading together ever since the Hudson's Bay Company began operating some three hundred years ago and although our share of your import market has shrunk considerably since the war, we are still your second largest supplier of goods, services and investment capital and your second largest export market. I hasten to add that these are pretty poor seconds after the United States from where you get most of your imports and where half your exports go, but this would not matter so much if the trade between us was a balanced one. It is a regrettable fact, however, that it is nothing of the sort and it is a matter of some concern to many of us that while we buy such a lot from you - over $1,000 million worth last year, of which, kindly note, 95% entered the United Kingdom duty free -you continue to fall far behind in your purchases from us. This has become an increasingly serious position, made worse as more and more Canadian manufactured articles find their way onto our market without a corresponding rise in the other direction. Trade, after all, is a two-way operation and if it becomes one-sided the danger is that it will eventually disappear altogether. As we are such a good market for your products I would have thought it was very much in your own interests to keep us sweet by buying more of the things you need from us. With modern jet travel we are practically on your doorstep these days and don't forget that with devaluation of sterling our prices are now more competitive and a lot more attractive than they have been for many years.

If anyone here had any doubts about our desire to increase our trade with you, I hope they were settled by the impressive British Industrial Fair in this city last May, by our participation in the National Trade Fair in Vancouver, by the British Pavilion at Expo and by the British Week held here in October-four pretty good indications of the seriousness of our intentions.

We are now following up those memorable events with hard-selling missions and as far as my own industry is concerned, we shall go on visiting you and worrying you from now on, in the hope that even if we cannot get rid of the imbalance we can at least sell each other more and so make the imbalance less important. This I might call Prince Philip's Law. I heard his Royal Highness tell the Italians in Milan not long ago that the imbalance of trade between two countries becomes less important the smaller it is in proportion to the total volume of trade between them. For example, he said, if the respective export figures of two countries trading with each other were L150 million and Y-100 million, the imbalance of E50 million would represent 20% of their total trade to each other (Z50 million out of E250 million) but if both increased their exports to each other by E300 million, making their figures Y-450 million and X-400 million respectively, while the imbalance would remain the same in absolute terms (i.e. £50 million) it would represent less than 6% of the total volume of trade between them. Simple Royal economics and how plumb right they are. How happy we would be if we could get our imbalance with you down to 6 %.

So there is a every reason for us to get together and to build up a bigger and better operation that will benefit us both as we are doing with other countries.

We do business wherever we are allowed to and it is our experience that the more successful we are in an overseas market, the better the domestic manufacturer in that particular market does as a result. There is no doubt that bilateral trade spreads new ideas, methods and techniques, it raises standards in industry and improves products and by building up new business it creates new wealth.

I know there are people in most countries who fear that imports will injure domestic industries and so deprive the home manufacturer of some of his business. That these fears are completely groundless is shown by the members of both the main trading groups in Europe - the European Economic Community and the European Free Trade Association - all of whom have substantially increased their sales amongst each other as a direct result of the lowering and abolition of tariffs and the abandonment of restrictions between them.

This is surely what we should all be looking for - the steady, uninterrupted expansion of world trade with the immeasurable benefits in human welfare and happiness that it brings in its train.

Let us stop thinking of our trade as "Home" and "Overseas", let us erase from our vocabularies the words "Exports" and "Imports". Let us reject protectionist poli cies and anything else which will militate against a world market and let us, instead, co-operate with each other in building up a bigger cake in which we can all share. Furthermore, we live in an age of scientific discovery and of constant and rapid change when the wonder of today is old hat by next year. Who knows, the time may be approaching when instead of petrol we shall be buying a teaspoonful of atomic energy or using electric cars and instead of bread made from your high-protein wheat we shall be having a pill for breakfast. And I would not count too much on your timber either because, as a boating man, I see a lot of fibre-glass everywhere and with the rate that science is progressing I think we shall be seeing substitutes for most things before very long.

So, what I would say to you is that no one can stand still in the midst of progress and no one can afford to ignore the changes which are taking place everywhere. I am sure there are more opportunities, for example, for Canadians to go into the markets of the world, help to expand business and spread a bit of that wonderful Canadian way of life.

But please be certain that amongst those of you who go to the United Kingdom there are more buyers than salesmen!!

Finally, I shoud like to turn to business as I see it. We in our Company try to do things the new British way. We certainly are dedicated to the job. We promote and sell all over the world, but we don't think about trading overseas - exporting - as something different, some mysterious cult into which one has to be initiated. We believe that trade is trade the world over and for us it is an integral part of our business. We go out and get to know about the people; we learn about their habits and their problems and their likes and dislikes, we study their physical attributes and the climate in which they live and everything about them so that the clothes we make for them will be exactly what they want. And when we have done all that we endeavour to persuade the fine shops and stores to buy our goods for their customers. And always we stand behind our product because we are proud of what we make and jealous of our good name.

We try to give the best service in the world and look after our customers better than anybody else. This is the new British way of doing things and I am sure that visiting together, talking together, trading together are the ways to increase international understanding and advance along the path of peace and prosperity.

by John Irwin.

Thanks of the meeting were expressed

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The World is Our Market


International trade as the basis of world economy. Market research as the key to success in any market, new or old, at home or abroad. The position in the United Kingdom. The speaker as a member of the "new British school" with a belief in letting everyone know just how efficient and modern Britain really is. Indications through exports of this efficiency and modernity. Other ways that Britain seeks to earn her living in the markets of the world; those of an intangible nature. Details of these invisible earnings. Reasons for Britain's economic difficulties. Three points relevant to what the speaker has said about Britain's ability to compete in world markets. Details of what Britain is doing to compete in world markets. Business the new British way.