Most small businesses in the UK do not expect their trade with the EU to shrink due to Brexit, while manufacturers say it is “too early to tell” whether leaving the EU will be good or bad for their prospects.
British firms are grappling with new administrative requirements for trading with the EU following the UK’s departure from the single market and customs union at the end of the transition period on 31 December 2020.
Grow or stay the same
Almost two thirds (62%) of the 500 SME directors surveyed by politics website Politico said they do not expect their trade with the EU to shrink.
In response to a question asking whether they expected their exports to the EU to grow or shrink in the next year:
- 39% expected no change
- 38% expected trade to shrink
- 23% expected growth
Too early to tell
Another poll by The Engineer also found that British firms were undecided about the impact of Brexit on their trading prospects.
When asked whether the UK leaving the EU would be good for manufacturing, 27% said it would be good and 31% said bad, with 41% saying it was too early to tell.
Origin
The UK and EU secured a trade deal at the end of 2020 securing tariff-free trade for firms trading with the EU, but only if they comply with the agreement’s Rules of Origin chapter.
The rules have caused some confusion amongst sections of the British business community, with ‘processing’ requirements leading to some goods – including Percy Pigs – now being liable for tariffs when they are re-exported back into the EU from the UK.
On a webinar hosted by the IOE&IT earlier this week, the majority of the 3,000 attendees said they were not confident in their understanding of the trade deal’s origin rules.
Declarations
Traders now need to complete declarations to move goods into the EU while those sending products of animal origin are required to complete vet-approved Export Health Certificates.
Controls on goods entering the UK from the EU will not be fully introduced until July 2021, as part of the government’s phased approach.