Background Brexit
100 days after Brexit: what's going on with trade?
No longer be bound by the rules imposed by Brussels. That was the reason for many English people to vote for Brexit. The first 100 days after the United Kingdom's withdrawal from the EU are now behind us. There has been no major crisis. What has Brexit achieved so far?
Customs formalities, extra paperwork and delays at the border. That's what many companies have been complaining about since Brexit. Many entrepreneurs warned about this in the years prior to the exit. There is therefore a lot of frustration about this among companies, which try to deal with the new situation as best they can.
More rules and bureaucracy
Research by the Netherlands British Chamber of Commerce (NBCC) shows that two-thirds of companies doing business between the Netherlands and the UK face higher costs, lower turnover, increased bureaucracy and/or significant delays. For companies in the goods sector this is itself 80%. Fresh products and/or foodstuffs have been hit extra hard by Brexit. A delay of a few days already means that a fresh product is no longer fresh.
But there is still a need for each other's products in the UK and the EU. Trade between the EU and the UK remains necessary and has not stopped. According to many parties, exporting from the EU to the UK is easier than the other way around. The UK is partly dependent on products from the EU and therefore applies relaxed rules for imports. Europe is less dependent and applies fewer exceptions.
On top of that, UK farmers will lose income support from the Common Agricultural Policy (CAP). The government has one transitional arrangement designed for this purpose, but there are many additional requirements attached to it. The biggest pain of Brexit seems to be mainly on the other side of the North Sea.
Less freight traffic
Imports and exports between the UK and the EU have been picking up again since February, according to the Office for National Statistics (ONS). In preparation for Brexit, many companies on both sides of the canal have held large stocks to avoid running out of products in the event of problems with border traffic. However, trade is not yet at pre-Brexit levels.
UK exports 92% less beef
The Scottish seed potato growers have been hit hard by Brexit. The export of seed potatoes to the EU is completely blocked. Dutch traders who get seed from Scotland have brought as much seed as possible to the Netherlands before the turn of the year, so that the year is not completely lost. Ordering extra seed potatoes at a later date was no longer possible due to customs regulations. The UK also exported 92% less beef compared to the same period last year. Some forage traders report that it is virtually impossible to import straw from the UK and report that trucks have been returned at the border. Conversely, Dutch exports of, for example, onions and potatoes to the UK are continuing fairly normally.
Transition Period
The UK will have more relaxed rules on foodstuffs until at least October. This means that these products from the EU can enter Great Britain relatively easily. Different rules apply to Northern Ireland, because Brexit prevented a hard border with Ireland. There, the customs union with the EU is more or less maintained. In the period up to March, despite the relaxed rules, the documentation was not in order for more than 60% of the foodstuffs.
The countries blame this on unclear rules and the fact that many companies still have to get used to the new situation. Also, by no means all exporters have experience with exporting outside the EU and the rules that apply to it. There are therefore concerns about how exports will progress if the UK phases out the relaxation and the veterinary and phytosanitary certificates have to be in order.
Jurphaas Lugtenburg
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