The UK government has confirmed plans to enhance border checks at ports in Northern Ireland and intends to release detail with the executive outlining ‘physical posts at ports of entry’ as soon as possible.
Whilst the rest of the UK will stop following EU rules on agricultural and manufactured goods at the end of this year, Northern Ireland will continue to align itself with EU single market regulations.
A cabinet office spokesman told the BBC that: “We want to work with NI businesses and the executive to ensure new admin procedures are streamlined and efficient.
“The protocol puts legal obligations on both sides. We are committed to complying with ours, just as we expect the EU to comply with theirs.”
He said that the government had made clear the checks requirement for live animals and agri-food – similar to what’s already in place at ports including Belfast and Larne – especially due to how strict the EU’s rules on the entry of animals and food products into the single market.
So, whilst these border checks would always have been in the pipeline and a requirement of the Brexit outcome, this looks to be the first time the government has confirmed this will indeed happen.
‘Deeply dishonest’?
Despite telling business leaders in November that there would be no buffers between GB and NI trade, and even saying that he would personally throw any suggested additional customs forms in the bin, the confirmation of enhanced border checks sits in contrast to Boris Johnson’s earlier Brexit rhetoric.
Brexit spokesperson for the Liberal Democrats, Alistair Carmichael even commented that: “It now seems Johnson was deeply dishonest with businesses when he previously asserted there would be no checks and businesses could put paperwork ‘in the bin’.”
Read more: DIT outlines financial support available to UK exporters
However, minister Declan Kearney says that checks are required in order to ‘implement the protocol for 1st January’ and in a bid to avoid disruption to trade.
“Delivery on that infrastructure needs to start as soon as possible, and the British government has indicated that it will provide advice on the requirements and the funding to put that in place.”
As UK-US talks on a free trade deal officially get underway, there’s hope in the SME community that an opportunity arises which will help mitigate some of the damage caused by Covid-19.
Almost 200 negotiators will be locked in detailed discussions, via video call, every six weeks in a deal that could see UK-US trade, already valued at almost £221bn a year, expand massively. The big hope for UK exporters is that tariffs imposed by the US, especially on farming, textiles, food and manufactured goods products, are lifted.
International trade secretary, Liz Truss commented at the commencement of discussions that: “The US is our largest trading partner and increasing transatlantic trade can help our economies bounce back from the economic challenge posed by coronavirus.
“We don’t just want any trade agreement. We want an agreement that will work for small business, an agreement that works for consumers and workers, and an agreement that will benefit all regions and nations of the UK.”
Currently, there are 30,000 SMEs in the UK exporting to the US and Federation of Small Businesses surveys have found that it’s the most important export market for these businesses – 46% saying it’s their key target region over the next three years.
Mike Cherry, national chair of the FSB commented that: “For small businesses, the US is the number one single market of choice for importers and exporters for the next three years, which is why these negotiations are so critical. With our economy likely to be suppressed for some time, we are going to need small businesses that trade to lead the way.
“Small businesses are already the backbone of the UK’s domestic economy. And especially in these difficult times, we now need to see their share of global trade start to catch up. We can do this by putting SMEs front and centre of all new trade agreements.
Read more: Coronavirus Live Chat support leads to government emergency loan policy change
“Securing a pro-small business free trade agreement, which includes a comprehensive and dedicated small business chapter, will be essential to addressing the needs and distinct challenges that small firms face when engaged in transatlantic trade.”
Go Exporting’s free coronavirus Live Chat support service for exporting businesses has helped change the rules surrounding the government’s emergency loan scheme, making it easier for exporters to access funds.
The Coronavirus Business Interruption Loan Scheme has made £1.25 billion available to UK firms who have seen trade dry up due to the lockdown. However, for many exporting businesses, funds have been unattainable.
This was due to a clause in the scheme which meant that any UK firm achieving 80% of turnover from exports was not eligible.
One of those businesses struggling to access the critical funds got in touch with Go Exporting for advice on the issue. We advised them to contact their Chamber of Commerce which took up the issue whilst we consulted with the Federation of Small Businesses and the British Exporters Association – both of whom agreed the rule was unfair.
Read more: Firms prepared for a no-deal Brexit better placed to deal with pandemic crisis
Further clarification from the British Business Bank, the administrator of the loans, was sought by the FSB, as well as the press being notified, which has now led to the government updating its guidance and clarifying that exporters are eligible to access funds.
Learn more and access the free Live Chat support service here.
Enterprise Ireland has launched its UK Local Authority Report following working with Go Exporting to produce and provide the research and overview.
The report outlines the 353 UK councils, their structure and the opportunities they present for Irish companies.
See below for a snapshot of the report.
Enterprise Ireland is the Irish Government’s trade and innovation agency, supporting innovative Irish companies through all stages of their growth and creating connections to international customers.
Read more: Coronavirus Live Chat support launches for exporters
Full access to the report can be garnered by contacting one of Enterprise Ireland’s UK market advisors.
Businesses who made contingency plans ahead of a potential no-deal Brexit could be better placed to mitigate the disruption and economic standstill caused by the coronavirus pandemic.
That’s according to directors at some British firms where scaling back investment and diverting capital to create stockpiles of critical components has left them in a better position to mitigate the new crisis.
Speaking to Bloomberg earlier this week, insulation business owner Dabid Merrick noted that: “We are drawing lessons from a process that has actually been a real pain for us.
“Every time there was a deadline, we’d have to pull together and build up inventory and find ways to overcome problems. And not investing in machinery has provided liquidity that would have been tied up in an asset. The crisis management we went through has helped.”
Another company director who has seen pre-Brexit business planning benefit him now is David Lenehan of Northern Industrial Electronics. His firm invested in remote-working software and training in preparation of a possible hard Brexit, as well as firming up travel plans across Europe to ensure the company could continue to service their primary customers.
Lenehan commented that: “We’re lucky we did that, although we didn’t think we would ever need 30 people to be doing it all at once.”
Read more: Coronavirus Live Chat support launches for exporters
Yet whilst some firms have seen a glimmer of operational hope thanks to Brexit preparedness, most are suffering as a result of the pandemic. Over half of manufacturers have seen orders shrink by over 50% in the last month alone according to a MarketFinance survey. Two in three say they expect to run out of cash by the end of April.
The Department for International Trade has set out the support on offer for some 160,000 UK exporters and international investors.
Through direct communication sent last week, the DIT outlined how firms can secure export finance to enable them to keep trading during the pandemic as well as advice on other financial support available to businesses.
Another part of the financial support covers the eligibility to secure export insurance across markets ranging from the EU and Japan to New Zealand and Switzerland – available with immediate effect. This follows UK Export Finance expanding the scope of its export insurance policy.
International Trade Secretary, Liz Truss commented that: “During this turbulent time, we are taking every step we can to ensure UK exporters are protected and that the economy remains strong. As part of this, the UK government has emailed 160,000 exporters and investors across the country to outline the support measures available to them.
“The government’s network of trade, policy and business specialists across the UK and around the world will continue to provide support where it is most needed, to ensure the country can continue trading during this difficult time.”
Read more: Coronavirus Live Chat support launches for exporters
The government has also announced plans to waive import taxes on medical equipment which will directly aid in the fight against coronavirus including ventilators, testing kits and personal protective equipment.
For more on what support is available for UK businesses, visit the government website here.
Today Go Exporting has launched a free Coronavirus advice and support Live Chat service.
The Live Chat is available to any exporting business to ask specialist questions and get expert advice on matters relating to international trade where Coronavirus has affected their business operations.
The service is designed to support exporters to navigate as best they can the choppy waters of the pandemic and emerge from lockdown in as best position as possible.
Access the Live Chat via the button below to ask a question.
Goods exports across all four UK nations rose once more in 2019 ending a strong year heading into the current period of pandemic uncertainty for businesses.
HMRC reported that, over the 12 months, international sales of goods from England rose 2% to £254bn. Scotland saw the largest growth at 4.4% to £33.6bn whilst Wales saw sales increase 3% to £17.7bn. Northern Ireland also saw strong sales totalling £9.1bn – a 2.2% rise.
The total number of exporting businesses increased by 2.6% to over 160,000. Click here to read the full report.
Positive for UK firms as the Brexit transition period began was that demand for UK goods is increasingly coming from countries outside of the EU with the USA remaining the largest export partner in terms of value. Scotland saw highest demand growth from China.
The performance of exporting businesses across the four nations has defied expectations over the last four years, riding out Brexit uncertainty to see record sales in both goods and services. However, the current coronavirus pandemic is a challenge that few firms would have seen coming and will provide the sternest test yet of organisations large and small – here in the UK and around the world.
Next up: how worried should exporting businesses be by Coronavirus?
Businesses are reporting that coronavirus is starting to impact their supply chains.
That’s according to a survey by the Institute for Supply Management of over 600 US companies which found that nearly 75% of firms are seeing capacity disruptions within their supply chains as a result of transport restrictions due to the pandemic.
More than six in 10 companies are also experiencing delays in receiving orders from China, whilst over half are struggling to get information out of the most affected country.
Thomas Derry, CEO of ISM commented on the results that: “The story the data tells us that companies are faced with a lengthy recovery to normal operations in the wake of the virus outbreak.
“For a majority of U.S. businesses, lead times have doubled, and that shortage is compounded by the shortage of air and ocean freight options to move product to the United States – even if they can get orders filled.
Read more: How worried should exporting businesses be by Coronavirus?
Companies with a more diversified supplier-base are reeling slightly less, especially compared to firms who rely on the Chinese markets for key components or, indeed, the vast majority of their imports.
As a result of the disruption, one in six companies have downgraded revenue targets.
Coronavirus has already had a huge effect on businesses worldwide and is starting to infect the working norms of UK firms too.
On the day that the Bank of England dropped the base rate back to a historic low and The Budget included measures including covering the cost of sick-pay for small businesses, many large businesses including Google and offices within The City have already told staff to work from home whilst Italy is on almost full lockdown.
For exporting businesses, self-isolation could affect more than productivity. Coronavirus threatens supply chains and international sales. And nowhere has that been more profound so far than in China.
The Financial Times reported that China exports have plummeted by 17% in the first two months of the year as Coronavirus takes its toll, disrupting global supply chains, blocking transport, movement and dampening business activity.
Elsewhere, food and pharma exporters are reporting anxiety regarding the global picture. In India, Coronavirus has contributed to a 15% decline in meat exports, whilst a falling global demand for rice and restrictions on the outbound shipments of medicine have confounded things. In fact, it’s thought that India’s trade with China has been hit to the tune of $12 billion so far.
The Institute of Export & International Trade published potential issues affecting supply chains last month, highlighting the importance of a clear overseas strategy without over-reliance on one market. The body noted the impact that SARS had on the global economy two decades ago, warning that China’s growth since then could see Coronavirus have a bigger impact.
In terms of transporting goods, airfreight and shipping are both being impacted with the International Chamber of Shipping advising new measures to its members.
Kitack Lim, secretary-general of The International Maritime Organisation said last week that: “With no vaccine currently available to tackle the Coronavirus, all industries and governments must take appropriate steps to contain the spread.
“Shipping is responsible for 90% of global trade and recognises its responsibility in helping tackle this global health issue whilst ensuring that the wheels of global trade continue to turn.”
Read their latest guidance document for the shipping industry here.