Three months on, what impact has Brexit had on UK-EU trade?

Three months on, what impact has Brexit had on UK-EU trade? - 2021-03-31

Three months after Brexit began for real when the EU's rulebook stopped applying to the UK, many areas of life have noticed a difference.

The impact has been felt by both people and businesses -- although it has sometimes been hard to distinguish from the overwhelming impact of the pandemic. 

British exports to the EU have been hardest hit by new border formalities, despite the last-minute deal struck in December ensuring tariff-free trade.

Meanwhile, a further UK delay in imposing import checks on EU goods means European exporters have not been affected to the same extent.

UK-EU trade overall

Official UK figures in March showed the UK recorded a record fall in trade with the EU in January, as the economy struggled with post-Brexit rules and the pandemic.

Goods exports plunged by 41% and imports by 29% as the UK's departure from the EU's single market had a major impact, as did additional bureaucracy and sometimes unexpected costs and taxes.

Figures released on March 18 by Ireland's Central Statistics Office said imports from Great Britain fell by 65% in January compared to a year earlier. Recent German figures showed imports from the UK dropped by 56%, while exports were down by nearly a third.

Trade between Great Britain and Northern Ireland has also experienced new barriers under divorce deal arrangements designed to protect an open north-south border on the island of Ireland. The EU has begun legal action against the UK after the British government unilaterally extended a grace period on some food checks.

Food and agriculture

Euronews listed several examples of early problems food producers and other traders reported. An avalanche of cases airing similar grievances has followed: the pork exporter forced to spend an extra €4,000 per load that still got held up by customs; the Belgian supermarket now looking to Ireland instead of Britain for supplies; the UK beekeeper who can no longer import bees from the EU.

A UK parliamentary report on March 23 notes that UK food producers are facing new trade barriers with the EU in the form of health measures, extra paperwork, higher haulage costs and some "outright export bans".

Exports of some products such as seed potatoes have come to a halt, says the House of Lords EU Environment Sub-Committee. Small businesses in particular are suffering from red tape and transport costs. The lack of equivalence agreements is adding to friction, it finds.

An analysis published on March 23 by the UK Food and Drink Federation of a 75% fall in exports to the EU in January -- salmon collapsed by 98%, beef 91% -- cited COVID-19 and stockpiling. But it said much was "likely due to new non-tariff barriers". The FDF added that the "collapse in groupage movements" -- where different companies send goods in the same load -- had hit small and medium-sized firms in particular.

"Dismissing trade disruption at the borders as simply short term ‘teething problems’ is no longer credible," says a Brexit Impact Report by the British Meat Processors Association. "British meat companies are painting a very different picture. They are reporting systemic weaknesses in the current export system, mountains of red tape and a potential permanent loss of trade of between 20 and 50 per cent."

Some bureaucratic demands are due to increase: for example, more export health certificates will be needed after grace periods end. The House of Lords committee warns that barriers to trade could become permanent unless the UK government takes action.

The UK wine trade has welcomed a second delay announced by the government on controversial import forms for EU wine from July until December 31, which the UK Wine and Spirit Association said would have brought "price hikes, permanently disrupted supply and drastically reduced consumer choice".