Vithanage Erandi Kawshalya Madhushani, Jade Times Staff
V.E.K. Madhushani is a Jadetimes news reporter covering Business.
Experts Highlight Increasing Barriers and Economic Strain on Post-Brexit Trade
Brexit induced trade barriers have significantly impacted the UK’s goods trade with the EU, and the situation is worsening, according to a study by Aston University Business School. The report warns that new regulations and red tape have caused a sharp decline in exports and imports, particularly for smaller UK businesses that struggle to navigate post Brexit requirements.
Between 2021 and 2023, the study found that UK goods exports to the EU fell by 27%, while imports of goods were down by 32% compared to where they would have been without Brexit. The study did not cover the service sector, which has fared better than anticipated.
The study also highlighted a reduction in the variety of goods exported, with 1,645 fewer types of British products reaching every EU country. This drop is attributed to smaller producers abandoning efforts to export small consignments due to excessive regulatory challenges.
Increased Regulatory Burden for UK Producers
Many small businesses have been vocal about the mounting difficulties. Mary Quicke of Quicke’s Cheeses in Devon shared that regulatory burdens made it “really, really difficult” to continue direct exports to the EU. Her business had to hand over four EU based customers to another supplier because they simply did not have the resources to manage the paperwork.
Adam Sopher, co founder and CEO of Joe & Seph’s popcorn, also expressed frustration over post Brexit regulations, recalling how the need for veterinary certificates for caramel popcorn due to its butter content was a new hurdle. Bulk deliveries to the EU have since resumed, but with higher costs pallet delivery costs, once around £130, have jumped to £230 £250 because of administrative fees and red tape.
Costs and Barriers Intensify Over Time
The report indicates that the negative effects of Brexit on trade have deepened over time. In 2023, the declines in trade were more pronounced than in previous years. Increased regulations, including product standards, safety checks, and labeling requirements, have added to the costs and complexity of trading with the EU. While these measures are designed to protect consumers, the environment, and competition, they have made trade more difficult for many UK businesses.
The hardest-hit sectors include agrifood, textiles, and materials manufacturing, such as wood and paper. Trade with EU countries farther from the UK, including Cyprus and Malta, has also suffered more significantly.
However, certain industries have shown resilience. Some sectors, such as tobacco, railway, and aircraft manufacturing, have seen increases in the variety of products exported to major EU economies like Germany and France.
Government Response and Future Prospects
In response to the ongoing challenges, a government spokesperson acknowledged the difficulties but emphasized efforts to improve trade and investment relationships with the EU. They reiterated there would be no return to the single market, customs union, or freedom of movement. Recent meetings between government officials and business leaders have focused on "resetting" trade relations with the EU, with a focus on economic security. However, significant progress may not be seen until 2024, when the new European Commission is firmly established and the UK completes its own new industrial and trade strategies.
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