A new survey underscores the growing urgency for the UK Government to address trade challenges with the European Union. Conducted by the British Chambers of Commerce (BCC) with 1,111 businesses, 92 per cent of which are small and medium-sized enterprises (SMEs), the survey reveals new difficulties caused by diverging regulations, further complicating trade for businesses on both sides of the Channel.
A new BCC survey of 1,111 businesses highlights growing trade challenges post-Brexit, with SMEs struggling due to diverging regulations and limited services access under the Trade and Cooperation Agreement.
Key issues include customs procedures, export documentation, and regulatory complexity.
The BCC urges government action for smoother trade and regulatory reforms.
The BCC report sheds light on the growing complexities stemming from the Trade and Cooperation Agreement (TCA), which was signed in late 2020 to allow tariff-free trade post-Brexit. However, limited services access and stringent rules on business mobility have hindered growth, with only 15 per cent of exporters stating the TCA has boosted their sales with Europe, while 41 per cent disagree.
Key barriers reported by businesses include customs procedures and documentation accounting for 45 per cent, export documentation at 39 per cent, regulations and standards at 36 per cent, and tariffs at 34 per cent.
In addition, awareness of upcoming legislative changes, such as the Carbon Border Adjustment Mechanism (CBAM) and Border Target Operating Model (BTOM), remains alarmingly low, with over three-quarters of firms unfamiliar with these updates, as per the report.
To address these issues, the BCC’s TCA Four Years On report outlines major problems caused by the TCA, coupled with actionable solutions. Among the priorities for 2025 discussions are developing a balanced Youth Mobility scheme for educational and work exchanges and ensuring smoother regulatory adjustments with greater business awareness. Additional proposals include adopting Norway-like exemptions for smaller firms from having fiscal representatives for EU VAT and securing mutual recognition of professional qualifications to enhance workforce mobility.
“The Government has said economic growth is its number one priority but if that is going to happen then we need to export more, and the EU is still our biggest market. Our modelling indicates that if exports had grown 1.0 per cent in 2024, compared to our forecast of a 2.0 per cent contraction, then the economy could have grown up to 1.7 per cent instead of 0.8 per cent. That is a big difference,” said Shevaun Haviland, director general of the British Chambers of Commerce.
“We need to see a smart and flexible approach to these negotiations. Our businesses are clear on what they want to see, less paperwork and bureaucracy, greater flexibility on business travel and a balanced Youth Mobility Scheme between the UK and EU. There is no time to lose in driving forward the changes we need to see. Firms are suffocating under a blanket of rising costs and improving our trading relationship with the EU could provide the growth needed to transform the dour outlook many are facing,” added Haviland.
Fibre2Fashion News Desk (HU)
