The United Kingdom has seen a measurable change in its trade relations with other European countries such as Spain since its official departure from the European Union in 2020. While it is safe to say that Brexit brought with it a unique set of changes and challenges, it has also opened up new Opportunities for UK and EU businesses to explore innovative ways to build business partnerships. The UK and Spain currently have a strong trading relationship, with Spain being the UK’s seventh largest trading partner in 2024, accounting for 3.7% of total UK trade. In this article, we will review how trade between the UK and Spain has evolved since 2020, including the steps companies have taken to maintain or strengthen their international trade relationships.
Post-Brexit trade relationship
The UK and Spain have a long history of strong economic relations, and this relationship has adapted as a result of the Brexit referendum, with both countries developing and implementing new policies and procedures to ensure trade remains as seamless as possible. The UK’s total market share in Spain (or goods and services exported by the UK to Spain) was 4.5% in 2023. The Trade and Cooperation Agreement between the EU and the UK has provided both countries with new framework through which they can continue to trade goods. The agreement allows the two nations to buy and sell goods without excessive tariffs or quotas, as long as they “comply with the appropriate rules of origin.” This agreement has helped ensure that UK and Spanish businesses can trade goods while keeping customs costs and fees to a minimum, helping them adapt to the new trading environment.
As a result of Brexit, several notable agreements and initiatives have been drafted or put in place specifically to maintain or strengthen trade relations between the United Kingdom and Spain. An example of this is the negotiations on the Gibraltar-Spain border in which the United Kingdom is currently involved. The purpose of these negotiations is to create a simplified trade agreement with Gibraltar, including the establishment of border controls and customs procedures to help maintain smooth cross-border movement for EU workers. Alongside this, the UK and Spanish governments have signed agreements in areas such as education to ensure that UK students can access Spanish universities and similar institutions with the same ease as EU-based students. This helps promote the cultural exchange of information and academic research between the two countries, thus strengthening their ties.
Adaptation to new rules and regulations
Another notable change for businesses currently trading between the UK and Spain has been the introduction of new customs procedures. This has meant that both UK and Spanish companies have had to study and adopt new documents and regulations to ensure their goods remain eligible to be traded internationally. As a result, both newer and more established businesses have had to invest time and money to train their staff on the new guidelines, or hire customs specialists to help navigate the new regulations. Some businesses have also found that services such as “customs brokers” are better at handling any additional documents and ensuring compliance with new regulations, leaving them more time to focus on other key business activities. These strategies have helped keep goods flowing between the two countries as much as possible.
Exploring digital solutions
Brexit has also led companies in the UK and Spain to invest in smart digital solutions such as new software and management systems to handle customs declarations, track shipments and ensure compliance with regulations. This digital transformation of trade processes has not only helped both countries adapt to new trade requirements, but has also improved the time and cost efficiency of some cross-border transactions. An example of this is the implementation of blockchain technology, which companies have used to create secure and private records of their international shipments, helping to promote transparency and trust throughout the supply chain.
Adoption of e-commerce platforms
Brexit has brought about some challenges with traditional supply chains, as a result of which many companies have begun to explore online platforms to more efficiently reach international customers. This trend has also opened up new growth opportunities for small businesses in particular, as e-commerce can make it easier for UK and Spanish businesses to profitably access each other’s markets. This has also led major e-commerce platforms to invest in new features that can help small businesses navigate international buying and selling. These features include integrated customs declaration tools and payment options tailored to the target audience. Overall, this has made it easier for UK online businesses to sell to Spanish consumers and vice versa, further strengthening the trading relationship between the two countries and ensuring that both continue to adapt their key business processes to thrive in an increasingly digital world. and online.
Use of international payment providers
Payment provider services have also played an important role in ensuring that businesses in the UK and Spain can transact international business seamlessly. Since Brexit, more and more businesses have started comparing payment processing companies to find providers that are fast, cost-effective, and offer convenient features. These features include technologies such as real-time payment networks, which allow money to move between international accounts almost instantly. This allows businesses to receive payments much faster, thus improving their daily and weekly cash flows and also allowing them to pay their suppliers faster.
Specialized international payment providers can also offer reduced fees and more generous exchange rates for cross-border transactions, thus keeping operating costs to a minimum. Some providers also offer additional integration features, meaning you can link your payment account with other company back-office software. This can make it easier to track and complete transactions and improve the overall efficiency of both small and large businesses.
Furthermore, Brexit has meant that it is more important than ever for UK and Spanish businesses to ensure they comply with relevant financial regulations when trading goods internationally. Some payment providers may offer built-in compliance checks and fraud prevention measures, ensuring that all transactions meet minimum EU security standards.
Maintaining cross-border agricultural trade
The agricultural sector has also been a major area of focus in the UK-Spain trade partnership. Post-Brexit, both countries have discussed and worked to maintain their mutually beneficial agricultural trade, with agriculture being an important part of both nations’ economies. In the last year to the first quarter of 2024, the UK imported more than £2.3 billion of fruit and vegetables from Spain. Spanish farmers continue to export a large quantity and variety of fruit and vegetables to UK consumers, while British producers continue to showcase their home-grown produce in Spain. Agricultural authorities in both the UK and Spain have worked to streamline food inspection processes and consolidate safety standards wherever possible. This has helped improve the time and cost efficiency of two-way agricultural trade.
Overall, the UK’s trade partnership with Spain has adapted and evolved to meet the new demands and restrictions of Brexit. Although there are still some challenges and inefficiencies in conducting cross-border business operations smoothly, companies in the United Kingdom and Spain have adopted multiple strategies to strengthen their relationship. This has included the implementation of digital software solutions, increased use of e-commerce platforms and constant dialogue between the two nations to identify and minimize inefficiencies.
