3 min read
28 February 2022
On the 31st January 2022, two years since the UK left the EU, the UK government released a policy document: - “The Benefits of Brexit”. This document highlights the UK’s achievement over the last two years and identifies where the UK will focus in the future. However, when it comes to trade with the EU, the BCC (British Chamber of Commerce)’s research shows that industries have faced challenges which hinder business growth.
In this insight report, we will shed light on the UK government’s visions and strategy through Brexit and what businesses have experienced so far.
The UK government has highlighted positive aspects of Brexit
The document highlights what UK has achieved so far through the control and freedoms the country has gained by leaving the EU. The document also states the UK’s vision and strategy, particularly in the sectors where the country is changing approach due to Brexit. Areas include data, science and technology; business and industry; infrastructure and levelling up; climate, the environment and agriculture; and a “Global Britain” (global trade and initiatives).
It is encouraging to learn that “The Benefits of Brexit” demonstrates that the UK government is very clear about which areas the UK is excelling in, and shows not only its vision but also its strategy: - how to achieve the vision. However, in order to implement the strategy, a clear budget and timed plan for each area mentioned in the report is required. We believe that further planning and details such as the value and timing of funding schemes will be announced based on this policy document.
When it comes to global trading, the document shows that the UK has agreed trade deals with 70 countries and with the EU, which is encouraging news. These trade deals include the UK-Japan CEPA (Comprehensive Economic Partnership Agreement) with which 99% of the goods will be tariff free. We hope that trade deals with countries outside of the EU will widen supply chain options for UK businesses.
UK businesses have faced challenges with the UK-EU trade deal
Although the government would like to emphasize the benefits of Brexit, we should also consider what UK industries have experienced since Brexit happened.
The BCC (British Chamber of Commerce) released their research results on the 16th February 2022. According to their research of over 1,000 companies, more than 70% of them do not think the EU trade deal enables them to grow or increase sales. Instead, it has pushed up costs, increased paperwork and delays. The research also highlighted key issues such as export documentation and VAT, and suggested solutions to improve EU trade.
As shown in the “Statistics on UK-EU trade” report published by the UK Parliament early December 2021, the EU is still the largest trading partner for the UK. Although UK trade with the EU fell dramatically due to disruptions caused by the pandemic compared with 2019, the EU still accounted for 42% of UK exports and 50% of imports in 2020. The UK and the EU are still important partners for each other.
Two years have passed since the UK left the EU, however, the UK-EU Trade and Cooperation Agreement (TCA) entered into force only recently on the 1st May 2021, and there are some areas where negotiations still continue between the two parties such as trade to and from Northern Island.
The current Ukraine situation has reminded us of the importance of co-operation beyond borders.
We sincerely hope that both the EU and UK continue to make efforts to keep and improve trade and businesses between both parties by putting bureaucratic and emotional political matters aside.
BCC’s research on the EU trade deal: