POLICYNEWS
EU TRADE CHALLENGES REMAIN FOR UK FIRMS Since the UK-EU Trade and Co-operation Agreement (TCA) was agreed on 1 January 2021, firms are still facing many challenges relating to the TCA deal. The main challenges have been the need for custom declarations, rules of origin requirements and VAT issues when importing and exporting goods to the European Union (EU). The most recently released Quarterly Economic Report included a special focus on International Trade. According to the report, 83% of firms have found it more difficult to export to the EU since January. Firms who continue to export to the EU have seen lead times increase from 2-3 weeks to 8-10 weeks, particularly around challenges aligned to increase in paperwork which often means goods are held at ports without the right paperwork, which leads to delays in supply chains as well as customers receiving their goods. The Chamber continues to work with Members and government to understand these challenges and use their partnership with the Department for International Trade to help support Members who are struggling with paperwork relating to imports and exports. The report has shown that most local businesses have experienced difficulties trading with the EU since 1 January 2021, whether both importing and exporting. The difficulties have been similar across all business sizes with retailers and manufacturers experiencing more difficulties than most. It’s hard to say whether these difficulties are being
caused by short term disruption or whether they’re persistent problems due to the nature of the EU-UK TCA. Covid-19 has complicated the picture, making it difficult to separate the effects of travel restrictions and a global downturn from the effects of the new trade relationship with the EU. Since the TCA was agreed, the Department for International Trade have gone on to agree a number of trade agreements with countries beyond the EU, including Japan, Norway, Iceland and Australia, with further negotiations starting with the view of joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. No doubt, the free trade agreements will help position the UK as a global trading hub with multinational firms looking
The Chamber continues to work with Members and government to understand these challenges and use their partnership with the Department for International Trade to help support Members who are struggling with paperwork relating to imports and exports. Business Direction published by Herefordshire & Worcestershire Chamber of Commerce
to invest in UK infrastructure, skills, innovation and technology. Data from the Office for National Statistics in April showed that monthly goods imports from non-EU countries surpassed those from the EU and were the highest since records began in January 1997. For example, professional services companies (87%) are most likely to increase trade levels with the rest of the world. The overseas market has seen an increase in sales from the previous quarter. 37% of businesses experienced an increase in Q2 2021 compared to 17% in Q1 2021. The 20% improvement in sales in the overseas market is due to a range of factors such as countries now exiting national lockdowns, which has seen a boost globally. Orders within the overseas market have more than doubled from 15% (Q1 2021) to 38% (Q2 2021). UK businesses have seen a sharp growth in orders from businesses from outside the European Bloc which has seen the UK economy grow significantly over recent times. The Chamber will continually engage with Members to understand challenges associated with the TCA deal and regularly participate in roundtables with MP’s and British Chamber of Commerce to highlight the challenges Members face such as increased lead times, additional paperwork and rules of origin requirements.
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