The Trade and Co-operation Agreement (TCA) between the UK and EU in the wake of Brexit is delivering more headaches than benefits for the majority of exporting SMEs. 

That’s according to data collected in December last year by the British Chambers of Commerce from almost 1,200 surveyed businesses. 

The survey found that almost eight in 10 firms had found the Brexit deal was not helpful in their drive to increase sales or grow their business overall, whilst more than half continue to face difficulties adapting to the new rules for trading goods. 

Download now: 7 key changes to UK-EU trade post-Brexit

Meanwhile, 45% of service businesses said they’re still trying to adapt, whilst over four in 10 said they’re finding it difficult to obtain visas for new staff. 

These difficulties are directly translating into business performance too. 

The survey also found that 80% of firms are seeing the cost of importing increase, whilst more than half have seen their margins cut. Three-quarters of manufacturers also said they’d had issues with shortages too. 

One manufacturer commented on their experience that: “Brexit has been the biggest ever imposition of bureaucracy on business. 

“Simple importing of parts to fix broken machines or raw materials from the EU have become a major time-consuming nightmare for small businesses, and Brexit-related logistics delays are a massive cost when machines are stood waiting for parts. We used to export lesser amounts to the EU, but the bureaucracy makes it no longer worthwhile.”

To help alleviate some of the issues UK businesses are facing, the British Chamber suggested five fixes that the government should look to introduce:

• Create a  supplementary deal with the EU that either eliminates or reduces the complexity of exporting food for SMEs.        
• Establish a supplementary deal, like Norway’s, that exempts smaller firms from the requirement to have a fiscal representative for VAT in the EU 
• Allow CE-marked goods and components to continue to be used in Great Britain after 2024. 
• Make side deals with the EU and member states to allow UK firms to travel for longer and work in Europe. 
• Reach an agreement on the future of the Protocol on Ireland/Northern Ireland with      the European Commission in the early months of 2023, to stabilise our trading relationship.

If your business is suffering as a result of Brexit, combined with current global economic headwinds, then Go Exporting can help. 

Our international trade consultancy helps businesses of all sizes to expand into new markets, from research and strategy to full export implementation and sales generation. 

Learn more about how we can support your company here.   

New data has highlighted how a range of global economic factors are hampering growth efforts for small and medium-sized exporters. 

Data from more than 2,300 UK SMEs as part of the British Chamber of Commerce’s quarterly Trade Confidence Outlook for Q4 found that just one in four had seen international sales growth at the backend of 2022, with a further 47% saying sales had stagnated if not fallen. 

The picture for 2023 looks equally stagnant too with 28% expecting a sales slump against 24% saying they could see an increase in demand. 

Total revenues are expected to rise though as cost pressures and shrinking margins mean 64% of respondents are planning to increase pricing over the coming months. 

Difficult business environment

Consumers and businesses alike have struggled in the post-pandemic era to really kick on once more with the cost of living, inflation and economic headwinds driven by the war in Ukraine contributing to a trading environment some are finding more difficult than during the lockdowns. 

Additional factors such as Brexit have made it tougher, and more expensive, for UK firms in particular to access the EU market. 

Respondents to the BCC survey noted that energy (72%), labour (67%) and raw materials (61%) were the biggest cost pressures being faced – three critical areas that it’s hard to mitigate against. 

Head of policy at the Chamber, Willian Bain, said of the survey results that: “Last autumn the World Trade Organisation forecast global trade growth of just 1% in 2023, down from 3% in 2022. This is creating huge headwinds for smaller UK firms battered by the pandemic, Brexit and energy price shocks. 

“Against this background, it could be some time before the global shipping and trading systems return to anything approaching normality. 

“The UK government cannot afford to sit idly by as we head into such uncertain trading conditions. It must throw a lifeline to our struggling exporters who are desperately trying to keep their heads above water.”

Download now: 7 key changes to UK-EU trade post-Brexit

Bain continued: “Outside of the EU, the US is our biggest trading partner, and the one that BCC members are most interested in, yet progress on free trade talks are stalled. As the Good Friday Agreement anniversary looms the UK has a golden opportunity to transform our trading relationship with our two biggest export markets in one fell swoop. 

“Other measures Government should consider include providing effective end-to-end trade finance and setting up a trade accelerator – by working alongside our global network to help firms enter new markets and maximise sales.”