New research carried out by the British Chambers of Commerce of more than 1000 businesses has highlighted a host of issues with the UK’s trade deal with Europe. The BCC believes urgent steps should be taken to address these problems so the UK Government’s ambition to increase the number of firms exporting can be met.
Overall, just 8% of firms agreed that the Trade and Co-operation Agreement (TCA) was ‘enabling their business to grow or increase sales’, while 54% disagreed. For UK exporters, 12% agreed that the TCA was helping them while 71% disagreed.
There is similar discontent with the deal among Welsh businesses, of which 51% trade with countries inside and outside of the EU and 10% solely export products and services to the EU.
Only 9% agreed that the TCA was enabling their business to grow or increase sales, while 59% somewhat or strongly disagreed. When asked which market the UK should pursue trade deals with, 46% of businesses in Wales suggested that the UK Government should prioritise modifying the current deal with the European Union.
Paul Slevin, President of Chambers Wales South East, South West and Mid, said: “It is clear from this latest research that SMEs in the UK are feeling the brunt of issues arising from the new TCA with the EU, and particularly in Wales where almost two thirds of businesses trade with the EU in some way.
“To rectify this and increase the number of firms exporting, steps will need to be taken to improve the trade deal and reduce the impact on SMEs. While the current agreement is in place, we are offering specialist trade training courses to guide businesses through trading with the EU post Brexit.”
William Bain, Head of Trade Policy at the BCC, said: “This is the latest BCC research to clearly show there are issues with the EU trade deal that need to be improved. Yet it could be so different. There are five relatively simple steps that UK and EU policymakers could take to ease the burden placed on businesses struggling with the trade deal.
“Nearly all of the businesses in this research have fewer than 250 employees and these smaller firms are feeling most of the pain of the new burdens in the TCA.
“Many of these companies have neither the time, staff or money to deal with the additional paperwork and rising costs involved with EU trade, nor can they afford to set up a new base in Europe or pay for intermediaries to represent them.
“But if both sides take a pragmatic approach, they could reach a new understanding on the rules and then build on that further.
“Accredited Chambers of Commerce support the UK Government’s ambition to massively increase the number of firms exporting. If we can free up the flow of goods and services into the EU, our largest overseas market, it will go a long way to realising that goal.”
The BCC’s five key issues, and the solutions needed, to improve EU trade are:
- ISSUE: Export health certificates cost too much and take up too much time for smaller food exporters.
SOLUTION: We need a supplementary deal on this which either eliminates or reduces the complexity of exporting food for these firms.
- ISSUE: Some companies are being asked to register in multiple EU states for VAT in order to sell online to customers there.
SOLUTION: We need a supplementary deal, like Norway’s with the EU. This exempts the smallest firms from the requirement to have a fiscal representative and incur these duplicate costs.
- ISSUE: As things stand CE marked industrial and electrical products will not be permitted for sale on the market in Great Britain from January 2023. The same is true for components and spares.
SOLUTION: We need action from the Government to help businesses with these timelines. Many firms are far from convinced about a ban on CE marked goods in Great Britain.
- ISSUE: UK firms facing limitations on business travel and work activities in the EU.
SOLUTION: Government needs to make side deals with the EU and member states to boost access in this area as a priority for 2022.
- ISSUE: Companies starting to be pursued in respect of import customs declarations deferred from last year.
SOLUTION: We need a pragmatic approach to enforcement to ensure companies recovering from the pandemic do not face heavy-handed demands too quickly on import payments, or paperwork.