Smaller firms being hardest by EU trade issues

CW LEP British Chambers Daniel-Dalton

One of the leading international experts on UK-EU trade has told an audience in Coventry and Warwickshire that smaller businesses are being hardest hit by a fall in trade following Brexit.

Dan Dalton, a former MEP and now the CEO of the British Chamber of Commerce to the EU and Belgium, was speaking to businesses at an online event with the Coventry and Warwickshire Chamber of Commerce.

He reflected on figures that showed exports to the EU had fallen by 40 per cent in January and that imports had dropped by 28 per cent, and urged businesses to keep highlighting their issues to Government.

Dalton said: “When you dig deeper into the figures, the majority of the exports that are getting into the EU are from bigger businesses – which means that trade from SMEs is virtually at a standstill.

“We really don’t know yet how hard it is going to hit smaller businesses in the longer term but that is not a good sign.

“Those figures could also be being skewed by stockpiling before the transition period came to an end and, also, the ongoing effect of Covid-19. However, when you look at trade in food – something that can’t be stockpiled – that has fallen dramatically too, so I’d suggest this could be a long-term trend.

“And, because of Covid, we don’t yet know what the effect is going to be on services as people aren’t yet able to travel into Europe but, again, that is another issue we have got on the horizon.

“The agreement that was signed between the UK and EU is binding but, written within it, there is the opportunity to build on the relationship over time. So, businesses should keep up the pressure and should let Government know what problems they are facing so that they can take those into account if they return to the negotiating table with the EU.

“In a sense, it’s a truly world class agreement between the EU and UK because it offers tariff free trade – but it’s the non-tariff barriers that are causing the headaches and the vast majority of those are here to stay because we are no longer in the Single Market or the Customs Union.”

The event also heard from the Chamber’s former Brexit Club Chair David Burton; International Trade Director Ajay Desai; and David Hooper, of Hooper & Co, who has been delivering training to businesses on the new rules around trading with the EU.

Hooper said: “There were many who thought that if we got an agreement with the EU everything would stay the same, but that’s simply not the case.

“EU businesses were even less prepared for this than those in the UK and, sadly, they are just looking at new suppliers within the Single Market and Customs Union now and companies in Coventry and Warwickshire are losing out.

“There are some teething problems but there are some longer-term issues too. It’s currently taking three weeks to get freight into France – that was two to three days prior to Brexit.

“I’ve had one customer tell me that it was quicker for their business to get goods sent to Saudi Arabia than it is to get them to Cork in Ireland.

“There are businesses that just don’t understand much of the paperwork and the new rules around duties and VAT – and it has the potential to do real damage.”

Desai said: “The volume of calls to the Chamber’s International Trade team has increased five times since the end of the transition.

“We’ve got a strong team in place to help support businesses and, also, to ensure their issues are passed on in order to find a l