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‘Bonfire of the barriers’ promised for UK exporters

The government has promised a ‘bonfire’ of the current barriers to international trade for exporting business in the UK. 

International trade secretary, Anne-Marie Trevelyan made the announcement as part of a new drive to reduce red tape and barriers to exports around the world – estimated to be worth £20bn in economic benefit for British firms. 

There are 100 priority issues that have been identified by the Department for International Trade, including regulations on meat exports to Asia, rules delaying British medical devices entering South Africa, and restrictions on UK lawyers operating in Japan. 

The move is part of ongoing post-Brexit work to strengthen or create new trading routes for UK businesses outside of the EU. 

Trevelyan said in a statement that: “Every week we remove trade barriers somewhere around the world, helping more and more businesses all over the country.

“We know that businesses who export pay higher wages and are more productive than businesses who do not, but too often, complex trade rules and practical obstacles prevent them selling overseas.

“This bonfire of the barriers will grow our economy by allowing our brilliant businesses to satisfy the enormous global appetite for their goods and services.”

Whilst Brexit has caused major upheaval for the majority of import/export businesses in the UK, leaving the European Union has allowed the UK government to pursue independent trade agreements around the world, as well as addressing specific blockers on British trade. 

These include opening the Chinese market for UK lamb for the first time, worth £1.5bn a year, as well as beef in South Korea which within the next five years is hoped will open a market worth £2.5bn to British producers. 

So far, the DiT has identified and resolved around 400 trade barriers in the last two years, including barriers for individual businesses, including VetPlus where overcoming bureaucratic issues enabled the Lancashire-based firm to export pet supplements to India in a move worth £1.4m. 

VetPlus EMEA regional manager, Anthony Stewart, commented that: “Being able to meet the different compliance requirements across the markets we operate in is extremely important to ensure the availability of our products for vets and pet owners.

“Recently, we ran into a challenge in exporting our products to India and the support from the DIT was fantastic. They were able to put us in touch with the right people to help us liaise with the Indian authorities and facilitate the appropriate documentation to enable us to re-start the export of our products to India.”

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Exports to EU fall to lowest level in 11 years as imports continue to rise

Trade woes for UK businesses in the face of Brexit are continuing into 2022 as exports to the EU fall to their lowest level since 2011. 

Data newly released from Eurostat shows how EU imports from the UK fell by 16.4% over a two-year period. In start contrast, imports by the EU from non-EU countries rose by 30% over the same period. 

The heightening trade imbalance is due to a number of factors, including the UK’s departure from the EU. But Covid-19 also had and continues to play a big factor. Eurostat’s report notes that ‘the COVID-19 crisis caused both exports and imports between the EU and the United Kingdom to fall in 2020. Imports reached a minimum of € 7.5 billion in January 2021. By December 2021 they had recovered to € 13.5 billion. Exports reached a minimum of € 14.8 billion in April 2020. By December 2021 they had recovered to € 24.8 billion’.

Despite the fall in UK exports into the EU, last year the United Kingdom was still the second-largest partner for EU exports of goods, and the fourth largest partner for UK imports of goods. 

The UK’s trade deficit has been growing weaker across the board, with data from the Office of National Statistics showing the difference between goods and services imported rose to its highest level since 1997, rising to £51.7bn in Q1 this year. 

Read more: ‘Same nightmare week after week’ for UK exporters

However, economists from both Eurostat and the ONS have noted that the latest data should be treated with some caution due to a change in methodology. 

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‘Same nightmare week after week’ for UK exporters

UK businesses are continuing to struggle with post-Brexit trading rules as export bosses warn that life outside the EU is becoming a ‘nightmare’ as fears grow that the Northern Ireland protocol could lead to a trade war with Brussels. 

Exporting firms have warned that costs and red tape have seen doing business with the EU become more difficult, cut into margins and take too long. 

One such exporter, Mark Brearley of kitchen equipment firm Kaymet, said to The Guardian that: “There’s a sense of, ‘Oh God, here we go again.

“There are loads of things I could’ve been doing if it wasn’t for these problems. We could do things that take us forward, rather than back.”

Owner of men’s fashion brand Rivet & Hide shared his own thoughts, adding that: “It’s really frustrating. I hear Johnson boasting about free trade and all the rest of it.

“I don’t know how he’s got the brass neck to talk about us doing free trade when basically he’s the one who’s imposed sanctions on our business.

“We were freely trading with the EU and now we’ve had tariffs imposed on us through our Brexit deals.”

Since 2019, key export categories including clothing, fruit and veg, cars, livestock and fish have all seen large decrease, with total exports down 8.3%. 

However, there are signs that UK firms are beginning to look further afield to grow their international sales. 

Data from the Food and Drink Federation found that exports to non-EU countries rose 16.2% in the first three months of the year, almost 11% higher than in Q1 2019. 

Read more: Rise in non-EU food and drink exports for UK firms

Total non-EU exports of food and drink are now worth a record £2.3bn, with sales to Australia, Canada, India, Japan and the US showing the most growth. Beef exports rose 80%, with whiskey, chocolate and gin also seeing sustained growth. 

Whilst food and drink exports to the EU still remain higher at £3bn, the rise in sales further afield may be a sign that UK firms are starting to broaden their horizons in the wake of Brexit. 

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UK SMEs seeing core EU markets vanish

The UK’s small and medium-sized businesses are seeing their EU markets disappear as they struggle to combat increased post-Brexit red tape and trading costs. 

At the same time, EU businesses exporting into the UK market are benefiting from a lack of controls. 

In an interview given to The Loadstar, one small business owner said that: “EU warehousing is the only way to get around costs and bureaucracy – it also means jobs and money go abroad – but if you’re small it’s not viable.

“Before Brexit, a third of our direct mail orders were in the EU. That went to nothing and we are slowly having to build it back up, but this means charging our direct mail orders from the EU half the price, with us covering the VAT.”

And those increased costs, or indeed reducing prices and swallowing taxes to remain competitive, have seen many businesses fail. In fact, between 2020 and 2021, 6.5% of UK businesses closed – the largest decline in 20 years. The pandemic had a hand to play in that of course, but many SMEs have directly blamed the departure from the EU as shutting off a core market. 

Read more: 5 ways the crisis in Ukraine is impacting international trade

As the interviewee to Loadstar pointed out: “The increased cost of transport means that for our product, the cost has increased three to four times. Then there are the cultural differences; we are simply not going to sell many jazz records in Indonesia or Thailand, and you have to take into account the poverty gap with these new global markets – Europe is rich, while Asia, Africa, South America are poor.

“SMEs can’t wait 30 years for a vague ‘levelling-up’ promise. That’s OK for the likes of Shell, ICI, Unilever, GM, but not for us.”

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Exporting to the EU post-Brexit (free webinar)

What are the challenges for exporters to the EU post-Brexit?

In this webinar, we will look at the implications for your business, what it means for your exports, imports and future opportunities.

We will identify the challenges you need to address to successfully export to the EU post-Brexit, including the new rule changes that came into force at the beginning of 2022.

Watch free below!

Free resources noted in this video include:

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Webinar: Exporting to the EU post-Brexit

What are the challenges for exporters to the EU post-Brexit?

In this webinar, we will look at the implications for your business, what it means for your exports, imports and future opportunities.

We will identify the challenges you need to address to successfully export to the EU post-Brexit, including the new rule changes that came into force at the beginning of 2022.

There are two dates available:

  • Thu, 24 March 2022, 12:00 – 13:00 GMT – book here
  • Tue, 5 April 2022, 11:00 – 12:00 BST – book here
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Webinar: Trading with the EU in 2022

Last month we were delighted to join with the Liverpool Library to host a webinar on trading with the EU in 2022.

The webinar covers a number of key topics for businesses, including:

  • What changes did Brexit introduce?
  • What are the implications?
  • Post-Brexit UK-EU trade guide
  • What are the opportunities?

Watch the webinar in full below!

Learn more about adapting to the new trading relationship with the EU with our free Post-Brexit Planning Checklist here.

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Majority of UK exporters say EU-UK TCA failing to deliver growth

The majority of exporting businesses in a new poll say that the Trade and Co-operation Agreement between the UK and EU in the wake of Brexit is falling short on delivering the benefits it set out to achieve. 

The survey, carried out by the British Chambers of Commerce, found that 71% of exporters feel that the new trading arrangement with the EU is not enabling them to grow or increase sales. Only one in eight said it was supporting growth. 

Meanwhile, the majority of those quizzed also said that the TCA had increased costs, delays and paperwork requirements, putting UK firms at a competitive disadvantage. 

Businesses cited a number of issues with the new arrangement, including a rise in costs for firms and their customers, a lack of resources to deal with new red tape for smaller firms, and an increase in EU customers put off from working with UK businesses over perceived additional trade complexities. 

However, some businesses have managed to make light of the TCA, stating that trade had been able to continue without too many significant changes and that it was forcing companies to take a more global outlook with their export strategies. 

Head of international trade at the Greater Manchester Chamber, Susana Cordoba, commented on the BCC’s findings that: “As from previous findings, we believe the UK Government must continue to work hard listening to what businesses are facing on the ground and offering practical solutions and support. 

Read more: Brexit causing “increased costs, paperwork and border delays”

“Many SMEs are still struggling as they lack the knowledge and skills set to adapt to the new way of trading.” 

Free Brexit support for your business

Go Exporting has been working closely with trade bodies and individual firms to help manage and mitigate the upheaval caused by the UK’s departure from the Single Market. 

If your business is still struggling to adapt, a good place to start would be our free post-Brexit planning checklist which covers 10 key points including the HS Code, customs declarations and duties. 

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FREE Webinar: Changes to trading with the EU since Brexit

On the 3rd of March, we’ll be joining Liverpool Library for a free webinar on trading with the EU following the UK’s departure from the European Union.

In this webinar, we will look at the implications for your business, what it means for your exports, imports and future opportunities. We will identify the challenges you need to address to successfully export to the EU post-Brexit, including the new rule changes that came into force at the beginning of 2022.

Presented by Go Exporting CEO Mike Wilson, we will cover the following:

• What are the changes we have seen in our relationship with the EU post-Brexit?

• How do you identify the challenges in your business that you need to consider?

• How do you address the challenges and successfully trade with the EU?

• What are the opportunities brought about by Brexit and how do you make the most of them?

Register online at Eventbrite here.

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Brexit causing “increased costs, paperwork and border delays”

A parliamentary report has highlighted how UK firms have been hit by increased costs and border delays due to Brexit. 

The report, created by the Public Accounts Committee, said that it was clear that leaving the European Union was also having an impact on UK trade volumes. 

Whilst businesses around the world have reeled from the impact of the pandemic, the report said it was clear that the EU exit was having a negative impact for UK businesses. 

PAc chair MegHillier said of the report that: “One of the great promises of Brexit was freeing British businesses to give them the headroom to maximise their productivity and contribution to the economy – even more desperately needed now on the long road to recovery from the pandemic.

“Yet the only detectable impact so far is increased costs, paperwork and border delays.”

The report set out a number of recommendations to the government to support UK businesses within the transition, including:

  • Government must set out its scenario planning and modelling for passenger volumes in 2022 and clarify how it will manage the increased pressures and any contingencies that may be required.
  • To minimise the costs to business as far as possible.
  • Government should identify what issues businesses are facing in relation to the new border requirements and in particular determine how they can provide SMEs with additional support.
  • Government should set out departments’ assessment of EU trader and haulier readiness, to determine whether any intervention by either itself or the EU may be required; and set out any plans for additional support.
  • Government should continue its efforts to resolve the challenges of the Protocol and ensure that departments are ready to put any negotiated outcome into operation.

Post-Brexit planning checklist

For many firms, this is a confusing and frustrating time, especially for those with limited experience of customs declarations, licenses, VAT on import and rules of origin.

We’ve created a free checklist to help you navigate the choppy waters and adjust to a new trading environment. 

Download your copy here

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