The highly anticipated trade deal between the UK and the EU, which was expected to boost exports and bring economic growth, seems to have fallen short of its promises. According to a recent survey by the British Chambers of Commerce (BCC), more than half of UK exporters have reported that the trade deal has failed to increase their sales. This news comes as a disappointment to many businesses, who were hoping for a much-needed boost after the challenges of the past year.
The BCC survey, which included over 1,000 exporters, revealed that 49% of businesses reported no change in their export sales in the first quarter of 2021, compared to the same period last year. 11% of businesses even reported a decrease in export sales, citing worsening red tape and trade friction as the main barriers to growth.
The trade deal, which was finalized on December 24, 2020, was meant to provide businesses with tariff-free and quota-free trade between the UK and the EU. However, the reality has been quite different, with many businesses facing challenges and difficulties in trading with their EU counterparts.
One of the major concerns raised by businesses is the increasing amount of red tape and bureaucracy involved in exporting to the EU. The new customs procedures and paperwork have been a significant barrier for businesses, especially small and medium-sized enterprises (SMEs), who may not have the resources or expertise to navigate through these new processes. As a result, many businesses have faced delays and additional costs, making it harder for them to compete in the EU market.
Another issue highlighted by the BCC survey is the trade friction between the UK and the EU. Despite the trade deal, there are still non-tariff barriers in place, such as different regulatory standards and rules of origin requirements, which have added to the complexity and cost of doing business with the EU. This has been particularly challenging for businesses in the manufacturing and agricultural sectors, who have to comply with strict rules and regulations in order to export to the EU.
The BCC survey also revealed that the services sector, which makes up a significant part of the UK economy, has been hit hard by the trade deal. 44% of service sector exporters reported a decrease in sales, compared to 22% of goods exporters. This is concerning, as the services sector was not covered by the trade deal, and businesses were relying on the UK-EU deal to provide some stability and certainty in their trade with the EU.
The BCC has called on the UK government to address these challenges and provide support to businesses, especially SMEs, who have been the most affected by the new trade arrangements. The government has announced a £20 million SME Brexit Support Fund to help businesses adjust to the new trading rules, but more needs to be done to ensure that businesses can thrive in the post-Brexit era.
Despite the disappointing results of the BCC survey, it is important to note that the trade deal has only been in effect for a few months, and it may take some time for businesses to adjust and find new opportunities in the EU market. The BCC has also highlighted that some businesses have seen an increase in export sales, particularly in the agri-food and pharmaceutical sectors. This shows that there are still opportunities for UK businesses to succeed in the EU, but it may require more effort and resources.
In the meantime, businesses are urged to seek support and advice from trade organizations and government agencies to navigate through the new trade arrangements. It is also important for the UK government to continue working with the EU to address the issues raised by businesses and make necessary improvements to the trade deal.
In conclusion, while the UK-EU trade deal may have fallen short of its promises in the short term, there is still hope for businesses to succeed in the EU market. It is crucial for the government to address the challenges and provide support to businesses, and for businesses to adapt and explore new opportunities. With determination and collaboration, we can overcome the initial setbacks and build a stronger and more prosperous trading relationship with the EU.
