‘Same nightmare week after week’: UK firms tired of post-Brexit EU trade international trade

MeterArk Brearley remains frustrated with Brexit.over a year from UK officially leaves EUexporting goods made by his company is not getting any easier for the London-based manufacturer, under terms agreed to by Boris Johnson’s government.

Describing it as “week after week of nightmares”, he said: “More time spent doing things that go wrong. Sometimes the EU really feels like the hardest place in the world to ship things.”

For the past seven years, Kaymet, a company run by Brearley, has been making and selling tea carts, trays and electric stoves from its factory near Old Kent Road, to customers including the British royal family. The Queen is thought to have used Kaymet merchandise on her coronation world tour – celebrating her platinum jubilee this week. The company sells goods in 40 countries around the world.

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But leaving the EU increases Brearley’s costs and makes it harder to sell goods abroad. “If it weren’t for these issues, I could have done a lot. We could have done something that would have moved us forward rather than backward,” he said.

Despite recovering from an initial slump at the end of the transition period in January 2021, UK exports to the EU remain well below pre-Brexit levels, official data showed.Exports fell 40% this month as traders adjusted to new red tape and border delays, but fell another 11% last year compared to 2018, the most reliable year for comparison before the ONS Brexit Inventories and the coronavirus outbreak have affected trade flows.

However, fears are growing that new Brexit hurdles are looming as the government threatens to tear up Brexit. Northern Ireland Protocol, covering trade between the UK, Northern Ireland and Ireland. Despite Boris Johnson’s claim to have “finished Brexit”, his government now believes this core part of his deal has been undermined.

Mark Breley
Mark Brearley of Kaymet at his factory in south London. Photo: Small Business Federation

“There’s a feeling of, ‘Oh my God, here we go again,'” said Brearley, who worries that Kaymet will suffer if the EU responds with new trade barriers.

Raoul Ruparel, special adviser to Theresa May Europe During the first round of Brexit talks, he said that if the situation worsened, companies could start to wipe out their old no-deal Brexit plans.

“Any business will tell you it’s unhelpful,” he said. “A lot of them in this situation are just continuing to work, they just need to make the most of it. But what they don’t want is to keep changing the rules of trade with the UK and the EU.”

While businesses fear retaliation from Brussels, the government insists it is the right thing to do. “Britain addresses deal issues and protects Belfast’s solution [Good Friday] The agreement will reduce costs for businesses, eliminate unnecessary paperwork and protect the UK and EU markets,” a spokesman said.

Chart: UK Imports 2019-2022

However, there may be economic costs. Steffan Ball, former chairman of Philip Hammond’s advisory board and now chief UK economist at Goldman Sachs, said the most likely outcome was a “compromise deal”. Still, he warned that if that is not achieved, the risk of “significant economic impact” looms.

“As early as 2020, Office of Budget Responsibility [OBR] estimated In the long run, a “no deal” Brexit would reduce real GDP levels by another 2%. In addition, the escalation of tensions raises the possibility of a trade war that could impose tariffs on exports to the EU,” he said. “But in our view, such an outcome is unlikely. “

Even with the current deal, the Treasury’s economic forecaster OBR expects Brexit to cost the economy 4% of GDP over 15 years, double the long-term impact of the coronavirus pandemic.

Trade data suggests that UK exporters are already feeling the pinch.according to Netherlands Bureau for Economic Policy AnalysisData tracking global trade trends showed that goods exports from advanced economies, including Britain, the United States, Japan and the euro zone, were 2% above their 2018 monthly average in March, when adjusted for inflation. In the UK, however, real exports fell by almost 22% in the same month.

Chart: Exports of Developed Countries

Some industries have been hit harder than others. Both apparel and footwear exports to the EU fell by almost 60% compared to 2018. Meat exports fell by nearly 25%, vegetables and fruit by 40%, while car exports fell by more than a quarter.

Paul Alger, director of international affairs at the British Fashion and Textiles Council, said his industry may have taken a huge hit because many of the goods sold by British companies did not qualify for a post-Brexit trade deal. According to its terms, goods must comply with “rules of origin” requirements, that is, a certain percentage of goods need to be produced domestically to enjoy duty-free treatment. However, most of the clothing sold by UK retailers is made in Asia or the US and is therefore not eligible.

“They also found that customs in some countries is very difficult. Especially when it comes to labelling,” Alger said. “A lot of companies will say we didn’t realise how good a deal it was to get goods from the UK to the EU until we actually left.”

In one example of a shift in trade patterns, Marks & Spencer is building a warehouse to handle EU deliveries of clothing and household goods to reduce the impact of tariffs and export costs.The High Street stalwart said last week that Brexit has taken its toll £29.6m profit and £15m trade loss.

Danny Hodgson
Danny Hodgson runs Rivet & Hide, which sells premium menswear in London and Manchester stores and online. Photo: Handout

Danny Hodgson runs Rivet & Hide, which sells premium menswear in London and Manchester stores and online. He said EU sales, which he had spent a decade building up, plummeted in half in the first month after Brexit and never recovered.

“It’s really frustrating,” he said. Rivet & Hide pushes up prices for EU customers, including new duties, VAT and shipping costs.

“I hear Johnson bragging about free trade and everything else. I don’t know how he has the guts to talk about us doing free trade when he’s basically the one imposing sanctions on our business. “We free trade with the EU and now we pass The Brexit deal imposes tariffs on us. “

Hodgson said the government had already done damage to the UK economy that could have been easily avoided as it faced the risk of recession amid the cost of living crisis.

“We’re less profitable, there’s more work involved and more hassle, but I’m still fighting for it and hopefully things will improve someday,” he said. “But if there is a trade war, it will end.”