‘Same nightmare week after week’: British companies fed up with EU trade after Brexit | world Trade
MArk Brearley remains frustrated with Brexit. More than a year after Britain’s formal withdrawal from the European Union, on terms agreed to by Boris Johnson’s government, exporting goods produced by his company has not been easier for the London-based manufacturer.
Describing it as “the same nightmare week after week,” he says, “more time is spent with mistakes happening. The EU really feels like the hardest place in the world to ship things to sometimes.”
For the past seven decades, Brearley’s running Kaymet has manufactured and sold tea carts, trays and hotplates from its plant off Old Kent Road to clients including the British royal family. Kaymet merchandise is believed to have been used by the Queen – celebrating her platinum jubilee this week – on her coronation world tour. The company sells goods in 40 countries around the world.
But leaving the EU has increased Brearley’s costs and made it more difficult to sell things abroad. “There are a lot of things I could have done had it not been for these problems. We can do things that move us forward, rather than back,” he says.
Official figures show that UK exports to the EU remain well below pre-Brexit levels, despite some recovery from the initial decline in January 2021 at the end of the transition period. Exports fell 40% on the month as traders adjusted to new red tape and border delays, but came back to finish last year down 11% compared to 2018 – the year the Office for National Statistics used as the most reliable comparison, before Brexit stockpiled. And the impact of the Covid pandemic on trade flows.
However, concern is growing that new roadblocks over Brexit loom as the government threatens to tear up the Northern Ireland Protocol, which covers trade between Great Britain, Northern Ireland and Ireland. Despite Boris Johnson’s claim that “Brexit is finished”, his government now views this central clause of his deal as broken.
“There’s a sense that ‘Oh my God, here we are again,'” says Brierley, who worries that Chaimette will suffer if the EU responds with new trade barriers.
Raul Ruparel, who was Theresa May’s special adviser on Europe during the first round of Brexit negotiations, says businesses could start dusting off plans for a no-deal Brexit if the situation worsens.
“Any business will tell you it’s not useful,” he says. “In this case, a lot of them are dealing with it and they just have to get the most out of it. But what they don’t want is constantly changing the rules of trade with the UK and the EU.”
Despite business fears of retaliation from Brussels, the government insisted that moving forward was the right thing to do. UK solution to fix protocol problems and protect Belfast [Good Friday] A spokesperson for the agreement said the agreement would cut costs for businesses, remove unnecessary paperwork, and protect the UK and EU markets.
However, there can be economic costs. The most likely outcome is a “compromise deal,” says Stephen Paul, former head of Philip Hammond’s board when he was an advisor and now chief UK economist at Goldman Sachs. However, he warns of the risks of “significant economic impacts” if no one is reached.
“In 2020, the Office of Budget Responsibility [OBR] He estimated that a ‘no-deal’ Brexit would reduce the level of real GDP by an additional 2% in the long run. In addition, the escalation of tensions raises the possibility of a trade war, with potential tariffs imposed on exports to the European Union. “But this outcome is highly unlikely in our opinion.”
Even with the current deal, OBR – the Treasury’s economist – expects Brexit to cost the economy 4% of GDP over 15 years, twice the long-term impact of the scarring from the Covid pandemic.
Trade figures suggest that UK exporters are already feeling the pinch. According to the Netherlands Bureau of Economic Policy Analysis, which tracks global trade trends, exports of goods in March from advanced economies — including the United Kingdom, the United States, Japan and the eurozone — were 2% above the monthly average for 2018, adjusted for inflation. . However, UK real exports fell by almost 22% in the same month.
Some sectors have been hit more dramatically than others. Apparel and footwear exports to the EU are down almost 60% compared to 2018. Exports of meat are down almost 25%, and vegetables and fruits are down 40%, while exports of cars are down by more than a quarter.
Paul Alger, director of international affairs for the UK’s Fashion and Textile Association, says the huge blow to his industry may be because many items sold by British companies do not qualify for the post-Brexit trade deal. Under its terms, goods must meet the requirements of the “rule of origin,” which requires a certain percentage of an item to be produced locally to benefit from duty-free access. However, a lot of the clothes sold by UK retailers are made in Asia or the US, making them ineligible.
“They also find customs very difficult in some countries. Algeria in particular said about the labeling. “A lot of companies will say we didn’t realize how good the deal was to get goods from the UK to the EU until we actually left.”
In one example of changing trade patterns, Marks & Spencer is setting up a warehouse to handle EU shipments of clothing and household items to reduce the impact of customs duties and export costs. The British strong-streeter said last week that Brexit has cost it £29.6m in profits and £15m in lost trade.
He runs Danny Hodgson Rivet & Hide, which sells quality men’s clothing from stores in London and Manchester as well as online. He says EU sales, which he spent a decade building, halved in the first month after Brexit and never recovered.
“It’s really frustrating,” he says. Rivet & Hide has raised prices for EU customers to include new tariffs, value-added tax and shipping costs.
I hear Johnson bragging about free trade and all the rest. I don’t know how he has the power to talk about us doing free trade when he’s basically the one sanctioning our business. We used to trade freely with the EU and now we have tariffs imposed on us through our Brexit deals.
With the British economy at risk of recession amid the cost of living crisis, Hodgson says the government has caused damage to the British economy that could easily have been avoided.
“We’re less profitable, there’s a lot of work involved, a lot of trouble, but I’m still putting in the effort at it hoping that one day things will get better,” he says. “But if there is a trade war, it will end that.”