London, UK: Businesses are “banging their heads against a brick wall’ over improving trade with the EU, the British Chambers of Commerce warns in a new report.
The British Chambers of Commerce wants additional deals to made food exports easier more than two years after the Trade and Co-operation Agreement was signed with a significant number of firms still struggling to increase sales or grow their business under the UK-EU trade deal.
The Chambers of Commerce is calling on the government to consider how trade with Europe can be improved two years after the deal agreed by then prime minister Boris Johnson.
In November 2022, the Office for Budget Responsibility said Brexit had caused a “significant adverse impact” on trade volumes and business relationships between UK and EU firms.
Shevaun Haviland, director general, British Chambers of Commerce, said: “Businesses feel they are banging their heads against a brick wall as nothing has been done to help them, almost two years after the Trade and Co-operation Agreement was first agreed.
“The longer the current problems go unchecked, the more EU traders go elsewhere, and the more damage is done.”
The BCC is called for an additional deal with the EU to eliminate or reduce the complexity of food exports for small and medium-sized businesses, along with a Norway-style deal that would exempt small firms from needing a fiscal representative for VAT in the EU.
It is also calling for deals with the EU and member states that would allow UK firms to travel for longer and work in Europe. And it has urged the government to find an agreement to the ongoing row over post-Brexit arrangements in Northern Ireland.
“Businesses want political leaders on both sides to move on from the debates of the past and find ways to trade more freely,” Haviland said.
“This means an honest dialogue about how we can improve our trading relationship with the EU. With a recession looming, we must remove the shackles holding back our exporters so they can play their part in the UK’s economic recovery.”
The Trade and Co-operation Agreement was agreed in December 2020 and allowed goods and services between the UK and EU to remain tariff-free. But extra checks and requirements at borders have affected the movement of goods and the prices charged.
The British Chambers of Commerce comments come as a separate report from the Centre for European Reform says Brexit may have reduced UK trade by around 7% and damaged investment by even more: meaning that UK economic output is 5.5% smaller than it would otherwise have been.That is a bigger impact than assumed by the government’s official forecaster, the Office for Budget Responsibility, which has said there will be a 4% hit to productivity.
However, in March the OBR predicted that imports and exports would be 15% lower in the long run, and that new trade deals with the rest of the world would not make much difference to trade volumes.
The government said Brexit “opens new opportunities for UK businesses”.
