British companies: chaos and high costs due to Brexit rules

British companies and entrepreneurs are ringing the alarm clock because of the chaos in the export trade caused by the โ€œbewilderingโ€ amount of new rules by Brexit.

In the first week after the trade agreement came into force, DPD delivery service suspended part of the deliveries to mainland Europe, Waterstones publishing house stopped selling to EU customers and warned British fishermen that they cannot enter their fresh products into EU markets sell because of delays at the borders.

Prime Minister Johnson promised a tariff free trade deal after Brexit, which would allow free and easy access to the European market. But in reality traders face all sorts of costs for exporting goods to Europe, they say in The Guardian.

According to the UK industry organisation Food and Drink Federation, the administrative burden and border controls provide โ‚ฌ3.3 billion in additional retail costs. As a result, goods and food are at risk of becoming more expensive, the sector warns.

Hasty deal

Many of the problems are attributed to the hasty deal, which was sealed on Christmas Eve. โ€œThe reason why the UK and the EU originally agreed to an eleven month implementation period was to give companies time to put their business in order and be ready for the transition. But we didn‘t have that time,โ€ says Stephen Kelly, director of a Northern Ireland business organisation. โ€œWe had seven days before everyone had to finish, and one of them was Christmas Day.โ€

โ€œ The industry welcomed the trade agreement that prevented the catastrophe of no-deal, because tariffs and quotas would have been a disaster for exporters. But this is only a starting point, because there are still important issues that need to be smoothed out,โ€ says Stephen Phipson, director of employers organization Make UK in The Guardian. He thinks it would take months, if not years.

It remains to be asked if this will exists, after all these months of negotiation, says Dominic Goudie, head of the Food and Drink Federation. He warned earlier this week of impending food supply problems due to the new rules. For example, food transported to Ireland or Europe via a British distribution centre are labelled as British, even if they are manufactured in the EU. This leads to additional costs, paperwork and often delays.

Representatives of British production and trade organisations held urgent consultations with Foreign Minister Gove last Thursday. Gove admitted that there were problems that would lead to ‘significant additional disruptions’ at the British border in the coming weeks.

Companies from the European side are also asking for an adjustment period so that they have time to understand and implement the rules in the 1200 page trade treaty.

Pandemic

The United Kingdom buys about half of its food from abroad, with the majority coming from the European Union. Even before Brexit, problems arose at the border, when due to the coronapandemic trucks were no longer able to enter and leave the country.