Almost two-thirds of British exporters have said selling to the EU has become harder in the past year, according to the British Chambers of Commerce, which is calling on the government to do more to smooth trade frictions post-Brexit.
Three years on from Boris Johnson signing the Trade and Cooperation Agreement (TCA) with the EU, the small businesses which make up much of the BCC’s membership are still struggling to negotiate trade barriers.
Among those which export to the EU, 60% of respondents to the BCC’s latest survey said it had become more difficult than a year ago. By comparison, 18% of exporters to non-EU companies reported that it had got harder.
Just 14% of exporters agreed that the TCA was helping them to grow their business, while 49% disagreed.
“The thing about Brexit is, it’s not a static mechanism,” said William Bain, the BCC’s head of trade policy. “You’re dealing with a growing compliance burden that’s started to come in increasingly over the past 12 months. It creates more paperwork; it creates more cost.”
The TCA was hailed as securing tariff-free exports to the EU, and Johnson said at the time that there would be “no non-tariff barriers”.
But in fact, exporters have been confronted with new customs and safety checks – and increasingly, divergent regulatory regimes.
Exporters told the BCC about “ever-changing” and “onerous” phytosanitary requirements on food exports, “nightmare” paperwork and variations in applying customs rules.
The report also points to compliance with EU sanctions on Russian steel, and the new “carbon border adjustment mechanism”, which already obliges steel exporters to the EU to detail their emissions, and will eventually apply much more widely. The UK government this week announced plans to implement a similar scheme.
The BCC is calling for better collaboration with the EU over future regulation, so that businesses can be prepared for changes.
Bain said: “This autumn it’s been a firefighting exercise, trying to get UK companies in a position to feel comfortable after the regulations have come in. We need to get to a situation where we’re ahead of the curve.
“The way around that is to have stronger regulation cooperation processes, so that ministers are engaged, and we have the right guidance and comms done in time for businesses to comply.”
While many of the issues raised by businesses are familiar, the BCC also sounded the alarm about future EU regulations, which many survey respondents have little idea about.
More than 80% were unaware of the carbon border adjustment mechanism, for example, and 70% did not know about new checks on food imports from the EU, due to be implemented next month.
The shadow business and trade secretary, Jonathan Reynolds, said: “The government’s constant chaos is getting in the way of businesses who want to trade abroad and grow. Firms who want to export are facing endless uncertainty and bureaucracy because the Conservatives have failed to deliver on their promises.
“Labour has a plan to make Brexit work and we will back our fantastic exporters by removing the practical barriers to trade through our small business export taskforce.”
A government spokesperson said: “The facts show that actually British businesses are thriving. In the year to June, we exported over £360bn worth of goods and services to the EU, an increase of 17.1% in current prices on the previous 12 months. Our economy has also grown faster than Germany, France and many European countries since we left the EU.
“We acknowledge there remain some issues and we are listening to businesses and acting on their concerns by working closely with the EU on solutions.”
