LEAVING the EU was not a “one-off shock” that businesses will be able to adjust to and the effects of "Brexit 2.0" are now being felt, according to a finance journalist and author.
Peter Foster said Brexit had created a “permanent state of uncertainty” and was making it "incrementally harder" for companies in the single market to trade with the UK.
Speaking at an online talk hosted by campaign group Glasgow Loves EU on Monday, the public policy editor at the Financial Times and author of What Went Wrong with Brexit, said leaving the EU was not like other major events such as 9/11 or the financial crisis of 2008.
“You had one-off big shocks which hammered business but then they were able to adjust to the new reality,” he said.
“Brexit creates a permanent state of uncertainty and that leads to what I call in the book ... 'Brexit 2.0’ issues.
“We are seeing them all the time now – they don’t make great headlines as they are quite technical and difficult.”
Foster said one example was a deforestation directive of the EU which states that products which use palm oil and soya, for example, need to have come from a sustainable way of farming and producers able to demonstrate that “the forests weren’t burned down, the orangutans weren’t killed” in order to make them.
He went on: “The UK has started to have similar rules, but it hasn’t tabled secondary legislation needed in order to enact those rules, to make it a legal requirement.
“Therefore British companies are struggling on two fronts – they are struggling to get their suppliers in the rest of the world to provide the legal attestations to show they comply with these deforestation rules.
“And then when they export to the EU, they are in danger of not having the bits of paper they need in order to satisfy EU regulation. So you have double barriers there.”
He added: “The food industry might sound peripheral, but actually it is one of our biggest manufacturing industries – we are very good at processed food manufacturing.
"That is just one example.”
Foster said there were many other examples, relating to issues such as plastic packaging directives and supply chain due diligence.
“It just makes it incrementally harder for companies in the single market to trade with the UK,” he added.
“To put it in very simple terms, if I am sat in Paris, is it easier to buy from Pedro in Barcelona or Peter in Brighton? And the answer is Pedro in Barcelona.”
