Post-Brexit non-tariff barriers are not just 'teething problems', study finds

Wed 15 Jun 2022
Posted by: Phillip Adnett
Trade News

Customs Controls

Post-Brexit non-tariff trade barriers cannot be dismissed as “teething problems” and have led to an ongoing depression of UK exports to the EU, a new report from Aston University has found.

The report by the university’s Enterprise Research Centre (ERC) found that EU health and safety requirements contributed to British exports falling by 15.6% (£12.4bn) in the first six months of last year.

Barriers to trade

The FT reports that exports of food and chemicals products, which faced new standards and regulations as a result of Brexit, decreased by 13.7% compared to 2019.

The report describes such rules as ‘technical barriers to trade’ (TBT) and found that they led to a 1.9% drop in overall exports for the same period.

Non-tariff measures

Export levels have rebounded since the pandemic, but the UK has seen weaker growth compared with other countries with similar economies, according to the report’s co-author, Professor Jun Du.

She attributed this partly to “the impact of non-tariff measures” on British exports.

William Bain, head of trade policy at the British Chambers of Commerce, said that the findings matched with his organisation’s “evidence that sanitary and phytosanitary (SPS) requirements have had a deeply negative effect on UK exports to the EU.”

SPS rules were introduced for UK agri-food exports to the continent following the end of the transition period but have been introduced for imports in phases, with many controls still to be introduced.

No adjustment

Du said the research confirms that non-tariff barriers will have a long-lasting impact on export activity.

“If it was just a matter of business adjusting [to the new regime], they probably would have figured out what to do after a few months,” she said.

Recovery

However, new ONS data this week showed that British exports to the EU have reached their highest-ever level due to rising sales of fuels and machinery, as the bloc continues to import substantial quantities of liquified natural gas (LNG), reports City AM.

Goods exports to the EU were valued at £16.4bn in April 2022, the highest level since the ONS began tracking this figure in 1997.

The fuel crisis in Europe due to the war in Ukraine has seen “unprecedented importing and exporting of fuels” with the UK importing LNG from countries like Qatar to fill storage sites in Europe, said Jack Sirett, head of dealing at financial services firm Ebury.