UK exports to the EU continue to face challenges
There have been lots of challenges for the UK that have come with exporting to the EU and generally doing business with the block since Brexit occurred. Only now are we starting to see the data that tells us how the dynamic has changed and how exports are being hit by Brexit.
It’s certainly not as doom and gloom as many had feared before Brexit became a reality, but there are also no signs of the stunning success that many proponents of Brexit shouted about. We’ll take a look at things in more depth today.
Everyone’s a loser
The first thing to make clear is that there are no real winners in this story. Yes, the UK is very much struggling with exporting its goods to the EU and many businesses have been unable to adapt to the changes that have come in since Brexit. The regulatory burden and the frustration and extra cost that come with exporting to the EU is now simply too much for many small and medium-sized businesses in the UK. As a result, they’re having to change their business model and focus on the domestic market instead.
At the same time, the vast majority of EU countries are not making any gains from the situation either. They’re losing out and finding it harder to export their goods to the UK. That’s a big challenge and is having a big impact on many EU businesses. Only Latvia and Cyprus have seen gains on their UK exports since Brexit.
A change of approach
There is also a shift on the focus that businesses in the UK and the trade department of the government. They’re talking more about green issues, green trade and supply chains. They’re also focusing more on providing digital services to the EU rather than physical goods. Whether this shift in focus is able to make up for the fall in traditional exports to the EU remains to be seen.
Small declines but no collapse
Photo by Quang Nguyen Vinh
There’s a 16% fall in the exports from the UK to the EU since Brexit compared to what was expected if the UK had remained in the EU. That’s obviously had an impact on the business world and there’s no doubt about that. However, despite the decline there has been no complete collapse the way some people has expected. Things seem to be muddling on relatively well.
New compliance burdens
There are also new compliance burdens that need to be taken into account when it comes to how businesses deal with exporting goods. There are things such as the standard pallet size in the UK being different from the EU, and although these things might seem small, they can have a big impact on businesses that are impacted by them day after day. Things like the claiming of preferential tariffs have come in as a direct result of Brexit and are having a big impact now.
The UK government claims things are moving in the right direction
However, the government is currently claiming that things are moving in the right direction and an improvement is on the cards. That’s something that might just be something that the government is saying to calm the business world, however. It’s impossible to say for sure.
EU countries exporting to Britain also see falls
EU countries are doing their best to find ways to deal with the UK but there has been frustration at the UK’s unwillingness to stick to its agreements, especially around the Northern Ireland Protocol. The uncertainty and problems that have come with that situation have led to further reductions in expected sports.
In an alternate universe, exports predicted to be higher
It’s expected that if the UK was still a member of the EU, exports would be far higher than where they’re at now. That alternative universe is one that we’ll obviously never know and it’s not something that is likely to be recreated with a return to the EU something that’s not on the cards for any major political party in the UK right now.
Now is a challenging time for imports and exports all over the world. As we’ve seen here, the impact of Brexit is continuing to place a strain on UK-EU exports. And there are issues for many western countries when it comes to importing goods from China due to continued lockdowns. At the same time, there are issues for grain and commodities as a result of the war in Ukraine.
