More than three-quarters of British companies say the UK government’s post-Brexit trade deal with the European Union hasn’t helped them expand their business over the past two years, despite promises it was a “ready-to-go” deal. cooking”.
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A survey by the British Chamber of Commerce (BCC) conducted the lobby firms to present five urgent recommendations to the government to improve the deal, which has left many exporters struggling to sell to the EU under current conditions.
More than half (56%) of surveyed BCC members who trade with the EU said they were having problems complying with the new rules for exporting goods, while 45% indicated problems when trading in services. Overall, 77% of companies trading with the EU say the deal hasn’t helped them increase sales or expand.
“Companies feel like they are banging their heads against a wall because nothing has been done to help them, nearly two years after the ATT was first agreed. [Acuerdo de Comercio y Cooperación, por sus siglas en inglés]”, says Shevaun Haviland, director general of the BCC. “The longer current problems go unresolved, the more EU traders go elsewhere and the greater the damage.”
Group members, mostly small and medium-sized enterprises, highlighted difficulties in administering EU VAT rules, inconsistent application of customs rules and new restrictions on business travel.
On the regulatory front, two-thirds of members said they would prefer to continue using the EU’s CE product quality certification, rather than switch to the new UK equivalent after Brexit, the UKCA.
“This is a damning report and it shows the mess the Conservative government has made on trade policy,” said Nick Thomas-Symonds, the Labor Party’s international trade representative. “It is unacceptable that more than three-quarters of companies say the agreements reached by the government are not helping them grow or increase sales.”
They demand immediate changes
The ATT was at the heart of Boris Johnson’s “ready-to-go” Brexit deal. The then premier had announced that he had been reached on Christmas Eve two years ago.
This deal allows British goods to avoid EU tariffs, but imposes additional customs and regulatory checks and other “non-tariff barriers” as Britain has given up on the EU’s customs union and single market.
The TCA is expected to be revised in 2026, after five years in force, but the BCC is asking the government to immediately negotiate some changes.
“It is clear that there are some structural problems in the ATT that cannot be resolved until it is revised in 2026. But, as we set out in our report to the government, there are some problems that do not have to wait for months of negotiations or revisions important to solve,” says Haviland.
the Irish problem
One of the key demands is that the government seek a quick solution to the impasse in which the Northern Ireland protocol finds itself, in order to “stabilize” the trade relationship with the EU.
Talks continue between the two sides on the protocol, after the current British Prime Minister, Rishi Sunak, tell the American presidentJoe Biden, who would like to see the impasse lifted before the 25th anniversary of the Good Friday Agreement, which takes place next year.
The controversial legislation promoted by former Prime Minister Liz Truss, which would avoid the protocol and which, as the EU had warned, it could lead to a trade warappears to have been parked for the time being while negotiations are taking place.
Among the other proposals of the BCC, the search for an agreement to abolish veterinary checks on agri-food exports and the negotiation of an exception to the rule that obliges small exporters to work with a “tax representative” established in the EU in order to collect the ‘VAT.
Echoing other trade bodies such as manufacturer group Make UK, the BCC also wants the European Union’s CE certification to continue to apply to products sold in Britain.
30,000 million less
The BCC’s call for government action comes simultaneously with a study by the think tanks The Center for European Reform (CER) says Brexit has reduced gross domestic product (GDP) by 5.5% and cost £40bn in tax revenues.
In a new reportCER’s John Springford compares the UK’s post-Brexit performance with similar economies. Using this approach, known as method double, points out that it is likely that in the second quarter of 2022 the economy would have been £30bn, or 5.5%, smaller than it might have been if Brexit had not happened. This figure is on the high end of recent estimates.
Springford says Britain’s now weaker economy has had a knock-on effect on public finances, contributing to Sunak’s decision to raise taxes.
“If the UK economy had grown at the same rate as yours doublethe tax revenue would have been around £40bn more a year,” he says.
Conservative MP Gavin Barwell, who was Theresa May’s chief of staff during the then prime minister’s tense Brexit negotiations, urged his colleagues to recognize the impact of leaving the EU on the economy.
“Our politicians cannot go on ignoring this economic self-destruction forever. That doesn’t mean we have to reunite, but it does mean we have to reduce the very damaging barriers to trade that we have introduced with our closest neighbors,” he says.
Translation by Lara Motto
