The former head of the World Trade Organisation has warned that a no-deal outcome to Brexit negotiations could relegate the UK from the top tier of world trade. 

Pascal Lamy, who headed the WTO between 2005 and 2013, commented in a discussion with CoronaNonics that the UK faces a stark choice between minor or great trade relationships with the EU bloc. 

Lamy said that: “Is trading between UK and EU under WTO terms a good thing or not? It depends on which league you want to play soccer.

“If you like the game and if you like very good players you will go to the first league. If you have less money to spend or if you’re not such a big fan, you can watch the match of the second, third, fourth league. 

“It’s still soccer, it still is trade, but it’s a minor version of what could be great.”

Read more: Barnier warns ‘changes are inevitable’ on release of Brexit guidance dossier

He continued that; “It’s not governments that trade. It’s businesses and that their lives will be terrible in case there is no serious transition between the nirvana of the internal EU market, which is where the EU-UK economy is for the moment, and anything which will be much worse than that. 

“It shouldn’t be much worse than that, but it’s going to be much worse without a proper transition organised.”

You can watch the episode below:

Talks between the EU and UK are ongoing, whilst the government has made progress in negotiations with other nations to secure trade agreements, including most recently with Japan. 

Read more: Just one in four businesses fully prepared for Brexit with five months to go

However, with the financial damage caused so far by Coronavirus expected to be longer-lived than initially thought, the fear for both British and European businesses which rely on free and easy-access trade between each other is that a no-deal scenario could be a step too far for many firms struggling to survive. 

What is critical is that businesses prepare as best as possible. Find out how Brexit-ready your firm is by downloading our free Brexit Planning Checklist here.

The EU’s chief negotiator, Michel Barnier has warned European businesses that changes are inevitable as the countdown to the end of the transition period ticks on. 

He’s told both companies and citizens that they need to prepare for the UK’s departure from the single market and that, deal or no deal, changes to way of life and doing businesses will take effect from January 1st next year. 

He commented that: “The Brexit transition ends on December 31. In five months, the UK leaves the EU’s single market and customs union. Changes are inevitable, with or without an agreement on the new partnership. Companies and citizens must get ready.”

The warning carries particular urgency as Brexit could ‘risk compounding the pressure that businesses are already under due to the Covid-19 outbreak’. 

Barnier’s warning comes as The European Commission issues a 39-page dossier of preparations that businesses and citizens need to make before the end of the year, giving guidance on how trade will be affected for firms, and also travel changes for tourists. 

Read more: Just one in four businesses fully prepared for Brexit with five months to go

Is your business fully prepared for Brexit? A new study from the Institute of Directors has found that half of all UK firms aren’t currently able to prepare for the departure from the single market due to a combination of coronavirus and lack of clarity on what they need to do from the government. 

To help, Go Exporting has created a 21-point Brexit Planning Checklist which companies can download and work through, providing a detailed planning guide and covering all the major areas that will be affected by Brexit. 

Download your free copy here.

A new study has shown how just one in four UK businesses is fully prepared for Brexit – despite the transition period set to end in just five months time. 

Released this month by the Institute of Directors, nearly half of the 1,000 companies they surveyed said they weren’t able to prepare despite the ticking clock, with one in seven saying the coronavirus had distracted them from Brexit preparations. 

Worryingly, a third of businesses said they still needed more clarity on what they need to do before acting. 

Companies in the financial services sectors are currently best prepared according to the survey, whilst manufacturing – which relies so heavily on free and quick access for imports and exports – still has some way to go. 

Further reading: How Brexit may impact the UK manufacturing sector (opens in new tab)

Interestingly, UK businesses seem to be more confident that they could well mitigate any impact of a no-deal scenario, but recognise that the UK economy is in dire need of a trade agreement with the EU – especially in-light of events so far this year. 

When asked how important it is that the government reaches a deal with the EU, 34% said it was very important for their organisation, whilst 65% said it was key for the economy. 

Director of the IoD, Jonathan Geldart, commented on the survey findings that: “With so much going on, many directors feel that preparing for Brexit proper is like trying to hit a moving target. Jumping immediately into whatever comes next would be a nightmare for many businesses.

“A commitment to some form of reciprocal phasing-in of changes once clear is a long-standing ask from our members, and the benefits would be significant. At a time when government is rightly straining every sinew to help firms deal with widespread disruption, it would be counterproductive not to seek to minimise it at the end of the year.

“Unilateral actions like staggering import controls would be a welcome step from Government, but are by no means enough, we need to mitigate disruption across many different sectors on both sides. A phased implementation is in everyone’s interests, and direct financial support for smaller firms would be a huge boost at a difficult time.”

Read more: Brexit: the greatest business opportunity for a generation?

He concluded that; “Directors want to take advantage of the opportunities that can come with an independent trade policy. They want to start this exciting new chapter on the front foot, not distracted by disruption.”

How prepared for Brexit is your business? At Go Exporting, we’re supporting companies to understand where the threats and opportunities of the UK’s departure from the European Union lie with free Brexit planning checklists and detailed business audits. 

Find out more about our Brexit consultancy services here.

We hear a constant stream of news and expert opinion about the significant challenges Brexit will bring to UK exporters, it almost feels like a doomsday scenario! Yes, we need to be prepared and there will be changes to the way we do business, but what about the opportunities? 

There are not a lot of column inches or posts on social media looking at the positives, yet potentially they are equally significant. The Government is now free from the restraints of the EU and can make decisions based purely on what’s best for UK business. 

Many UK businesses, if they export at all, have only contemplated the EU up to now. That is understandable as they are our near neighbours and until 31^st December our partners. Exporting to the EU is easy with free movement of goods and simplified VAT procedures for example. Selling to France is almost the same as selling to Sheffield. 

From next year we become just another third-party country and subject to the same customs rules and regulations as any non-EU country. The extent to which there will be duties and red tape depends on if we reach an agreement with Brussels in time. The indications are not good and the strings they try to attach may be too much for the UK Government to agree. 

So, ok every business is going to have to learn how to complete customs declarations, how to prepare all relevant paperwork and follow the new rules. It’s a learning curve but it’s not insurmountable. There are plenty of training courses out there and the Government is providing grants to ensure the cost is not a burden. You can also use a Customs Broker to take the hassle away if you so choose. 

We should look at this process as a positive. There’s no going back, so prepare and then move on. We will all now have new skills, knowledge and experience of exporting which will prepare us to broaden our horizons. We will have been taken out of our EU comfort zone and into a world of opportunities. Suddenly, from a procedural perspective, it is much the same process to sell to the US, China and Japan as it is to sell to France or Germany. 

Stop thinking EU and starting thinking World! 

There is a huge world of opportunities out there for you to consider. Broaden your horizons and look to expand your business in ways you perhaps never considered previously. 

But don’t just rush in. Consider carefully which countries to focus on. What is the size of the market? What are the barriers to entry? How do you assess and compare different countries? Exporting needs to be approached in a strategic, planned manner so as to find the right opportunities, avoid the costly mistakes and blind alleys.

Download our ‘7 Steps to Export Success’ ebook for a step by step guide to becoming a successful exporter. It will take you through the process we use with clients to identify and prioritise target countries and define the best route-to-market strategy. 

The first step is to narrow down the Where? 

Which countries provide sufficient opportunity for you to target? Look at any market research you have readily available, review your in-house data for where your enquiries and customers come from, see where your competitors sell and a key consideration in the post Brexit era will be to follow closely the development of Free Trade Agreements between the UK and other countries or regions, the EU included. 

Free Trade Agreements are designed to facilitate and promote trade between the parties, to ease the process, reduce or eliminate tariffs, cut red tape. As such they a good sign post to which areas to consider closely in your export planning. Details of agreements under discussion and already agreed can be found at https://www.gov.uk/guidance/uk-trade-agreements-with-non-eu-countries

Once you have narrowed down the Where? to the main potential markets, the next task is to prioritise and match your ambitions to your resources. It’s no use targeting the world if you only have one person in export and are running at 95% production capacity! Focus in the right areas is the key. 

To set priorities it is necessary to evaluate the Barriers to Entry in each country. Look at product approvals, competition, currency, language, freight costs, customs regulations, duties, country risk etc. 

When we carry out this process on behalf of a client, we consolidate all of the above information into a scoring system, weighting each barrier to entry for importance and assessing the pros and cons, the potential versus the risk. This is used to give a numerical rating for each country which allows us to compare the opportunity in different countries in a scientific rather than gut feel manner. 

It’s a process which can take time and effort but ultimately can save thousands in helping you make the best-informed decision possible. 

So, forget the doomsday scenario, think past Brexit and Covid-19. Look to the future, to the opportunities, to the profits and the adventures!

Go Exporting is a specialist consultancy helping companies just like yours to expand in international markets. For a free consultation on the help and support you need to open a world of opportunities see https:/goexporting.com, email mike.wilson@goexporting.com or call +44 (0)800 689 1423.

Online service providers need to start preparing for an end to the UK’s inclusion in the eCommerce Directive following the conclusion of the transition period between the UK and EU. 

The eCommerce Directive is a set of rules relating to online activities within the European Economic Area and allows member states to operate in any EEA country – whilst only having to operate within the rules of the country in which they’re based. 

However, once the transition period ends on 1st January 2021, this directive will no longer cover UK traders. 

The government is advising that businesses still wishing to sell online within the EEA consider whether their services ‘are currently in scope of the Directive and if so, ensure that you are compliant with relevant requirements in each EEA country you operate in’. 

Many online services provided by businesses may already comply with these requirements, but it’s worth checking now and making the appropriate changes if required before the end of this year. 

“The government intends to fully remove the eCommerce Directive’s Country of Origin principle from UK legislation, to bring EEA online service providers in scope of UK laws, which they were previously exempt from. As this principle is found in a number of pieces of legislation it will be removed at different points, when parliamentary time allows.”

Four steps to check compliance

The government has set out four steps to help businesses understand where they stand. They are:

1. Check whether you are in scope: the eCommerce Directive applies to ‘information society services’, which covers things like payments, providing a service that can be used remotely and so on, These cover the majority of online service providers, including online retailers, video sharing sites, search tools, social media platforms and internet service providers. 
2. Check where your service is based: This is your ‘place of establishment’ and is fixed to where you pursue your economic activity. 
3. Check for new legal requirements: If your business is established in the UK, you should check for the legal requirements of an EEA country you currently and wish to continue operating in. Rules you need to pay attention to are those that fall within the ‘coordinated field’ and cover items including online information, advertising, shopping and contracting.
4. Take appropriate steps: The government also recommends ensuring you have processes in place for ongoing compliance with individual EEA states and consider legal or other professional advice. 

Key further reading:

• The eCommerce Directive
• EEA Countries

For support with your ongoing Brexit planning, you can speak to Go Exporting for a full readiness audit and to understand the threats and potential opportunities that Brexit can service for your organisation. Learn more about our Brexit consultancy.

Over 100 business leaders from UK companies and business groups have written to the prime minister, once more reiterating the damage that a no-deal Brexit would cause to the economy. 

With Britain due to leave the EU at the end of this year and, despite the coronavirus pandemic, Boris Johnson confirmed that he won’t be asking for an extension to the transition period, businesses are still hugely concerned that the rigid negotiation timetable – which without a pandemic was still ambitious – could result in a cliff-edge departure from the European Union. 

The letter, with signatories including Zoopla, Graphene Composites and Ebookers, said that no-deal would result in ‘more people out of work and lower living standards’, adding that firms ‘simply do not have time or capacity to prepare for big changes in trading rules by the end of the year – especially given that we are already grappling with the upheaval caused by coronavirus’. 

Former Siemens UK CEO, Jurgen Maier who helped write the letter commented that: “This is not a call to reopen old divisions about remaining or leaving. The government must now deliver for us all, and on their promise to get a good deal, not a bad deal, and definitely not a no-deal.”

One issue the letter highlights is the growing trends towards localisation, especially in supply chains which may negate any opportunities to counteract lost business as a result of Brexit in territories including the US and China. It also called for alignment with EU regulatory bodies to allow the free-flowing of products in critical sectors such as medical, chemical and pharmaceuticals. 

Read more: ‘Be as best prepared as you can be for the worst-case situation’

Businesses have every reason to continue fearing a potential no-deal scenario, which has already been touted as being extremely disruptive. But with the additional economic damage caused by Covid-19 where 11 of 14 key service sector indicators such as sales and cash flow show record declines, recruitment is at an all-time low and domestic sales are down for three in four firms.

Last month, Go Exporting CEO Mike Wilson spoke to Ramzi Bouchrit on his web show on international trade to discuss a range of exporting issues, including Brexit.

What factors do businesses need to consider? What will happen if a trade deal with the EU isn’t reached? Will the UK still be a viable option for a distribution centre?

Watch the Brexit segment of the interview below:

The UK government has formally notified the European Union that it won’t be seeking an extension to the Transition Period and wouldn’t accept one should it be offered. 

Following the announcement, the government set out details of its accelerated border planning for controls on EU goods coming into the Great British marketplace from January 1st next year – planned to be rolled out in a phased way to help businesses adjust – as well as additional funding to grow customs operations.

“We have informed the EU today [12th June] that we will not extend the Transition Period. The moment for extension has now passed. At the end of this year, we will control our own laws and borders which is why we are able to take the sovereign decision to introduce arrangements in a way that gives businesses impacted by coronavirus time to adjust,” Michael Gove said in a statement.

“Today’s announcement is an important step towards getting the country ready for the end of the Transition Period, but there is still more work to be done by both government and industry to ensure we are ready to seize the opportunities of being a fully independent United Kingdom.”

Is your business still ready for Brexit?

For many companies, Brexit was already the biggest upheaval in their company’s history following years of uncertainty where the best approach was typically preparing for the worst but hoping for the best. The best being a free trade agreement, the worst being a cliff-edge departure from the UK’s largest international trading post. 

However, few firms would have foreseen a year where Brexit would be married with a pandemic, although studies have shown that those businesses who were best prepared for Brexit have also done better at mitigating the damage caused by Covid-19. 

Read more: Firms prepared for a no-deal Brexit better placed to deal with pandemic crisis

What recent announcements show though is that, virus or no virus, Brexit will be going ahead as planned. And, once more, there’s a real possibility that trade talks could yield no agreement on free, unimpeded trade between the UK and European Union. 

So, despite the immediate threat to all businesses and livelihoods being the coronavirus, organisations can’t take their eye off the ball when it comes to Brexit. It’s less than six months away and there’s no transitional buffer on the other side. The dress rehearsal is almost over, here comes the real thing. 

Here at Go Exporting, we’ve been helping businesses to understand the impact that Brexit can have, where threats to operations lay and how to mitigate for a worst-case scenario. 

If your company needs support, learn more about our Brexit Audits here.