Brexit simply hurts

Willy Naessens: customer-centred approach leads to best end result

Impact not as dramatic as feared, but still many disruptions Brexit simply hurts

The effects after six months of Brexit aren’t as dramatic as feared, according to the Ministry of Economic Affairs and Climate Change (EZK) and Dutch Agriculture and Horticulture Organization LTO Nederland. Still, there is little reason to rejoice. Import levies have been avoided, but the paper mill is growing and with it the delays. And that’s costing a lot of money.

“In the run-up to the Brexit, all of us - business and government alike - were preparing for the worst. Fortunately, we can conclude that the gloomiest scenarios haven’t come true”, a spokesperson for the Ministry of Economic Affairs stated when asked. “This is largely due to the thorough preparations made by our business community. But we do continue to reiterate: Brexit isn’t finished with us yet.”

The Border Operating Model, for instance, will be phased in over the coming period, with the UK government introducing additional checks on certain goods from the EU from October

The Brexit has dealt a hefty blow to both Dutch and British businesses: 40 percent said they were making less turnover at the beginning of April, according to research by the Netherlands British Chamber of Commerce (NBCC). The NBCC interviewed 125 companies from both sides of the channel. A large majority of 63 percent are experiencing more hindrance from rules and formalities since Brexit. In the goods sector this is 80 percent. Entrepreneurs mainly mention bureaucracy, higher costs and delays in shipping. The latter is felt particularly when transporting fresh products, which cannot wait too long.

The British government announced in March that it was postponing the introduction of stricter requirements for the import of animal and plant products. Mandatory health documents for animal products (veterinary certificates) will now be required from 1 October instead of 1 April. A so-called pre-notification is also mandatory as of 1 October. For plant products, the certification requirement applies from 1 January 2022 (plant material and livestock were already subject to mandatory certification). Full inspections at border posts will commence from 1 January 2022 instead of 1 July this year. Physical checks will only be made from March 2022 onwards. British companies in particular insisted on more preparation time.

this year and January next year (see box). “New control measures can create new disruptions. We therefore call on all business owners: stay up to date on the regulations. That way Brexit - also in the future - won’t get in your way later on”, said the spokesperson.

Afloat The Ministry’s findings are broadly in line with those of LTO Nederland. “There were no major problems and the trade with Great Britain is continuing for the most part”, is the trade group’s conclusion. According to LTO, exports are under pressure, although provisional estimates show that 80 per cent of EU exports have survived. In contrast, British exports to the EU have certainly halved, much to the discontent of the government in London.

All the drawbacks and pain: it’s the price that both sides have to pay for Brexit, EU negotiator Michel Barnier declared earlier. The provisional agreement, which he managed to pull off at the very last moment last year, actually crossed the finish line of the political review process with the approval of the European Parliament in late April. It was a moment that was welcomed by the European employers’ organisation Business Europe, among others, which stressed once again that the UK is now the EU’s third largest trading partner. The European Parliament itself remains actively involved in verifying that Boris Johnson’s government continues to abide by all agreements.

There have been allegations in recent months by the EU towards the UK regarding the promises made, particularly in relation to the Northern Ireland deal. That issue is an ongoing and major source of concern because of the possible consequences, not least in the Dutch agricultural sector. In 2020, the Netherlands exported a gross value of over EUR 8 billion of agricultural and horticultural products to the UK. This mainly concerned fruit and vegetables (fresh and processed), meat and ornamental horticulture, but also dairy products, eggs, sugar, potatoes and seeds. At the time, Britain was still part of the EU. But since Brexit, criticism is growing that the Johnson government constantly wants to show that it is ‘master of its own country’ and has no intention of allowing ‘Brussels’ to determine its course.

Balancing “This raises questions in the Netherlands about the export of agricultural and horticultural products, such as potato seedlings and other planting material. Are we prepared to accept that on the whole the UK will follow EU legislation, but then deviates on occasion? That means carefully balancing the call for a ‘level playing field’ with our actual export interests”, according to LTO. This issue is not addressed in the recently presented revised EU export strategy, the agricultural and horticultural interest group notes. The topic, which is important for the agricultural sector, also barely played a role in the recent parliamentary elections, much to the disappointment of LTO.

The organisation is closely following all developments, just as the Ministry of Economic Affairs continues to monitor potential obstacles to mutual trade. “Doing business is easier within the internal market than outside it”, the spokesperson explains. “The British departure has made it harder for entrepreneurs to do business with the United Kingdom. But every entrepreneur is affected by Brexit in a different way. The effects vary from company to company and range from waiting times for transport, customs procedures to the more difficult provision of services.” Therefore, the ministry says, it remains important for everyone to keep their finger on the pulse.