We know about the impact to UK traders but how have EU firms fared with new post-Brexit trade rules?

Wed 14 Apr 2021
Posted by: William Barns-Graham
Trade News

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Since the UK completed its departure from the EU on New Year’s Eve at the end of the transition period, there have been numerous reports of the difficulties British companies have faced adapting to new trade rules.

But how have European companies that trade with the UK been affected?

The IOE&IT Daily Update here summarises some of the major impacts so far.

New costs put on UK consumers

A survey by consumer group Which?, reported in City AM, has found that almost half of British customers buying goods from the EU since the end of the transition period have experienced issues such as delays and hidden additional costs.

Delays were the most common issue experienced by those who ordered products online, with one in 10 people asked to pay additional handling or delivery fees. The average charge was £41 but some people have had to pay up to £300 in add-on fees.

Some shoppers have also experienced difficulties when returning items to the EU.

Which? has called for EU sellers to provide greater clarity around the charges that British buyers may now face from European sellers.

France takes a hit

Firms and consumers in France have been particularly affected by the new trade rules resulting from Brexit. 

French customs data for February showed that while UK exports to France had largely recovered from reduced levels at the end of 2020 and in January 2021, French exports to the UK remained down 16%.

Delays and documentation

French manufacturer Sealock told the FT that they experienced a seven-week delay for a shipment bringing a crucial ingredient from a British supplier due to irregularities with new documentation requirements.

Sealock’s Jean-Marc Barki said that if the problems did not ease soon, he would consider using ingredients from Germany or Italy instead.

The UK provides France with its greatest trade surplus per country, valued at around £13bn according to French minister Jean-Baptiste Lemoyne in an interview with the French embassy in the UK.

Non-tariff barriers

Bordeaux wine merchant Gavin Quinney also told the FT that higher haulage fees were an additional challenge, on top of customs declarations and paperwork.

Other companies, such as agricultural equipment manufacturer CLAAS, are now rerouting shipments through Ireland to avoid the delays faced by goods crossing the Dover Straits.

Some smaller companies are looking to avoid the UK market due to disruption, according to Medef, France’s largest employment federation.

Drifting apart

Reuters also reports that exporters in Germany and Italy have experienced difficulties selling to the UK. 

Although the trade deal signed between the UK and EU confirmed there would be no tariffs or quotas on goods trade, new non-tariff barriers and the pandemic have nonetheless had an impact.

Reuters uncovered concerns ranging from the additional costs of using fumigated pallets for UK-bound goods, to complex paperwork relating to meat products, as well as drivers demanding additional compensation for the time that UK deliveries now take.

“At the moment it is actually easier to ship things to Asia,” said Simone Cozzi, managing director of High Quality Foods, a Rome-based food supplier that still exports to the UK.

German exports decline

Germany is the UK’s biggest trading partner in the EU, although trade has been declining since the Brexit vote in 2016.

German exports to the UK fell by roughly 30% in January, according to figures from German federal statistics office DeStatis reported on DW.com.

This was the highest year-on-year decline for any month since the financial and economic crisis in 2009 when exports fell by 17%.

Last year, German companies exported goods and services worth €66.9bn. In 2015, the figure was €89bn.

New timetable for import controls

The UK government originally planned to introduce post-transition import controls in three phases across 2021.

However, as reported in the IOE&IT Daily Update, it has delayed phases two and three of these controls in response to concerns from industry and the effect of Covid-19 on businesses.

Checks on agrifood were delayed for six months until 1 October, with other checks – including import declarations for standard goods and live animal checks – delayed until 2022.