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Cost of post-Brexit trade barriers for UK businesses soars to £2.2bn with economic impact eclipsing pandemic


Trade barriers with the EU in the wake of Brexit have cost UK firms over £2bn in the first half of 2021. 

£600m in costs alone have derived from issues surrounding Rules of Origin, where UK firms have to prove that products they’re exporting are over 50% derived from UK or EU components, or face tariffs. 

As many businesses are starting to discover, free trade deals are not cost-free for UK firms. 

The news comes as the Office for Budget Responsibility reported that leaving the EU would reduce the UK’s potential GDP by 4% long-term – twice the negative effect that the pandemic is likely to have. 

Richard Hughes of the OBR commented to the BBC that: “In the long term it is the case that Brexit has a bigger impact than the pandemic.

“We think that the effect of the pandemic will reduce that (GDP) output by a further 2%.”

Read more: Complex Rules of Origin add £600m to duty costs

The OBR also suggested that shifting trading regimes following Brexit have been partly to blame for supply chain issues, which in turn is supporting above-average inflation. 

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