News Brexit
Many companies are not yet prepared for Brexit
One in three companies in the Netherlands is not yet preparing for the consequences of Brexit. According to them, the outcome of the negotiations between the European Union and the United Kingdom on a new partnership is still too uncertain. Depending on a soft or hard Brexit, the damage to the Dutch economy is estimated at between €3 billion and €4,5 billion.
Kantar conducted research among 572 companies that do business directly or indirectly with the United Kingdom (UK). The research was commissioned by the Ministries of Foreign Affairs and Economic Affairs and Climate Policy.
Whether the EU and the UK reach an agreement or not, as of January 1, 2021, new rules will apply to doing business with the UK. Most companies with a direct trading relationship (53%) consider it important to prepare for this. Of all the companies surveyed, 57% say they have prepared, ranging from a little to a great deal.
Awaiting negotiations
This means that little has changed compared to April 2020, when the same study was conducted. A third of companies wait for the outcome of negotiations before making any real preparations.
In particular, companies with an indirect trade relationship are not (yet) preparing (74%). They do not expect Brexit to affect their business. This is different for more than a quarter of the companies (28%). They still see Brexit as a problem. The corona crisis has not changed that.
Wider preparations
The share of companies with a direct trade relationship with the UK that are preparing very or quite a lot for Brexit has remained stable at around 2019% since 30. The research shows that this group is more likely to prepare in full. More and more often agreements are made about delivery conditions, prices and transport. These companies also do the Brexit Impact Scan more often.
Just over half of companies doing direct business with the UK (54%) are hoping for a broader deal, including agreements on all aspects of economic cooperation. However, expectations about the outcome vary widely. Only 5% think a broader deal is possible, 26% expect no deal, 23% count on a limited deal and 23% say they don't know.
Brexit costs for the Netherlands
If there is a 'soft' Brexit, the Dutch economy will still suffer considerable damage. This damage is estimated at more than €4,5 billion and 17.700 jobs. With a soft Brexit, a free trade agreement will come into force without import tariffs and a large degree of agreement on the British requirements for their imports. Although this limits border controls, waiting times and administration, it still creates trade barriers that entail costs.
If there is no agreement at all, a 'hard' Brexit is imminent. In that case, both countries will levy import tariffs on part of each other's products and additional trade barriers will arise in the form of stricter border inspections, longer queues and extra documentation. This leads to a sharp drop in demand from the UK and costs the Netherlands €17,5 billion in added value and almost 70.000 jobs. As it turns out a report from ABN Amro.
Avoid delay
The transitional period for Brexit will end at the end of the year. Border formalities will come into effect from 1 January in any case. When entrepreneurs prepare well, this helps to prevent delays. For example, by entering into discussions with suppliers and buyers, providing a customs number (EORI) and properly arranging transport. And by being well informed by the British government about rules and formalities that will apply in the UK. Information and tips can be found at brexitloket.nl.
Jeanette Pennings
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