Nearly half of all British exporters are facing difficulties in the trade of goods following the UK’s exit from the EU single market on Jan. 1, according to a survey by a leading UK business group.
Some 49 percent of UK exporters who responded to the survey conducted by the British Chambers of Commerce (BCC) said they encountered difficulties in adapting to the changes in January, after the new post-Brexit trade agreement replaced the single market rules which had governed UK-EU trade before the Brexit transition period ended at the end of 2020.
The situation appears to be even worse for British manufacturers, 51 percent of whom reported difficulties.
The difficulties commonly cited by UK businesses included increased administration, costs, delays, and confusion about what rules to follow, BCC said on Thursday.
“Trading businesses—and the UK’s chances at a strong economic recovery—are being hit hard by changes at the border,” said BCC Director-General Adam Marshall.
He complained about the last-minute UK-EU deal, which was reached only on Christmas Eve, just a week before it was set to come into effect.
“The late agreement of a UK-EU trade deal left businesses in the dark on the detail right until the last minute, so it’s unsurprising to see that so many businesses are now experiencing practical difficulties on the ground as the new arrangements go live.”
Marshall said these concerns are “existential” for some firms, and “go well beyond mere ‘teething problems’” as characterised by Prime Minister Boris Johnson.
Hit hard by both the Brexit disruptions and the CCP (Chinese Communist Party) virus pandemic, some UK exporters told the BCC that they will be forced to switch away from international trade or move their operations overseas.
“It should not be the case that companies simply have to give up on selling their goods and services into the EU,” Marshall said.
“Ministers must do everything they can to fix the problems that are within the UK’s own control, and increase their outreach to EU counterparts to solve the knotty issues that are stifling trade in both directions.”
Also on Thursday, the government announced a £20 million ($27.7 million) fund to support small and medium-sized businesses (SMEs) adjust to new customs, rules of origin, and VAT rules when trading with the EU.
Cabinet Minister Michael Gove said that the government had “listened carefully” to the issues raised by the business community.
“This new targeted funding will see small businesses get more of the practical support they need to adjust to the new processes and prepare for further changes as we implement our own import controls in April and July,” he said in a statement.
“Together we will seize new opportunities available to a fully independent global trading United Kingdom,” said Gove, who, along with Johnson, was a prominent campaigner for Brexit during the 2016 EU referendum.
Last week an HSBC UK survey showed 40 percent of British importers and exporters said the shift to a new trading arrangement with the EU had made trade more cumbersome.
British manufacturers suffered the biggest deterioration in their supply chain out of almost 30 countries covered by IHS Markit’s business surveys in January.
Trade analysts think some of the extra cost and bureaucracy will be permanent, and the Bank of England has forecast they will lower trade by 10 percent in the long run compared with a frictionless arrangement.
Reuters contributed to this report.