Brexit trade woes grind on

Editor's note: With the third anniversary of the United Kingdom's departure from the European Union approaching, China Daily takes a look at the difficulties felt by businesses across the country, the impact on the movement of people, and the long-running talks over the trade status of Northern Ireland.

Jan 31 marks the third anniversary of the United Kingdom's withdrawal from the European Union, which is the UK's biggest trading partner.

And it is just over two years since then prime minister Boris Johnson struck the post-Brexit trade deal, the EU-UK Trade and Cooperation Agreement, or TCA, in December 2020, which he claimed would make "no non-tariff barriers to trade" with the continent, and allow UK firms "to do even more business with our European friends".

However, the promises made to UK businesses have not been fulfilled.

The only detectable impact so far has been increased costs, customs paperwork and border delays, according to a report published last year by Parliament's Public Accounts Committee.

A steep fall in the UK's trade with the EU occurred over the months following the end of the transition period, at the end of 2020, and red tape and the formalities of trading outside the European single market forced many businesses to reduce their trade volume, if not stop cross-Channel trade altogether.

Vishaka Chhetri Agarwal and her husband are Indian tea traders who have lived in the UK for 17 years and were among many people whose business with the EU has been affected by Brexit.

The couple told The Guardian newspaper that previously, they were able to send tea to a packing company in Spain and have it returned for dispatch within three weeks. But now, in the same amount of time, the tea could not even arrive in their EU partner's hands.

"When we send a consignment over to them, almost every single one is held by customs and they always ask for extra documentation. Next time, we send all of those same documents, the same commodities — but they still come back asking for more," said the couple, adding that a consignment of elderberries had been stopped by customs for more than a month.

It is not just small businesses who are taking the blows in trading with the EU after Brexit; big companies, though better able to cope with the difficulties, are also suffering.

In January last year, world-renowned London food store Fortnum & Mason stopped sending most of its goods to EU nations. In a notice, the company said: "Due to further regulatory changes around deliveries to the region, direct deliveries from Fortnum's to countries in the European Union are currently unavailable." It advised customers to shop for a selection of products for EU delivery through its European retail partner.

Marco Forgione, director-general of the Institute of Export and International Trade, told The Times newspaper that the organization's monthly monitoring shows the continuation of a decline in the number of businesses trading internationally, and that is primarily with the EU.

"The challenge has been understanding what the rules and regulations are and overcoming the issues of trading into a third nation. Have traders got a handle on it now? No, they haven't," he said. "Those that are doing it are getting better at it, but for a whole raft of others, particularly for micro and small businesses, they have struggled."

A recent poll of 328 traders by the institute found only 15 percent said they had increased sales to EU-based customers since Brexit, with 24 percent reporting a fall and 54 percent stating that volumes had remained broadly flat in the past two years.

The most common challenge remained around customs requirements and navigating changing export controls on goods that could have dual use and be caught by sanctions and quotas, reported The Times.

'Anything but frictionless'

Malcolm Harrison, the CEO of the Chartered Institute of Procurement and Supply in the UK, told the Bloomberg news agency that the situation reminded him of the difficulties of trading with mainland Europe 40 years ago. "We used to have all sorts of tariff barriers. We used to have quite a lot of administration and customs controls to get through. We used to carry more stock. We used to have many more alternative suppliers because of those challenges of a border which was anything but frictionless," Harrison said.

Although the post-Brexit situation did not turn the clocks back to 1973 when the UK joined the European Economic Community, the predecessor of the EU, it has done much damage to cross-Channel businesses, and years of preparation for the post-Brexit scenario did not prevent trade disruption.

For one, the long queue of trucks waiting to clear customs at the port of Dover or the undersea Channel Tunnel to France has not been cleared, so much so that the UK government recently signed a 200,000-pound ($244,605) yearlong contract with a humanitarian organization to provide food and water to truck drivers stuck in the line for over two days.

According to data from supply chain information organization FourKites, over-the-road shipments crossing the Schengen Area border — which encompasses most of the EU — were delayed 38 percent of the time in the fourth quarter of last year.

Many complaints about post-Brexit trade have been voiced by businesses registered with the British Chambers of Commerce, or BCC.

In a December poll, more than three-quarters of firms for which the Brexit deal is applicable said it is not helping them increase sales or grow their business. In addition, 56 percent of firms face difficulties adapting to the new rules for trading goods.

A retailer in Dundee, Scotland, told the chamber: "Customs on both sides of the EU border seem to have a separate set of rules to be able to charge different amounts for the same thing. We don't know until it's too late what these costs are."

A manufacturer in England's East Midlands observed: "We have experienced a lot of our goods going missing when they reach customs control. Due to additional import costs, we have found that quite a few of our EU customers that we have dealt with for a long time, in regard to providing a qualifying service, now stay within the EU instead of the UK."

Shevaun Haviland, director-general of the BCC, 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 TCA was first agreed.

"The longer the current problems go unchecked, the more EU traders go elsewhere, and the more damage is done."