Brexit – A month in!
Advocates of Brexit said it would free the UK from the chains of EU control and allow it to strike out on its own as a new ‘Global Britain’ trading nation.
A bold statement when the EU was by far the UK’s largest trading partner. Official figures showed that 44% of all UK exports went to the EU in 2017, while 53% of all UK imports came from the EU – meaning any post-Brexit future was likely to have serious consequences, both good and bad, for businesses.
While the UK was a member of the European Union, it was a part of what is called the customs union, meaning it enjoyed the benefits of trade liberalisation – that is, easy transit of goods across borders. Under the terms of Brexit withdrawal, Britain would leave the customs union and with it the benefits of free trade. Simply stated, it would instantly become much more difficult for goods to cross borders.
We already know however, that leaving the customs union has created a large amount of new red tape for businesses, which trade between Great Britain and the EU. For smaller companies (SME’s) this has been a particularly challenging time.
“The red tape is exhausting, and it causes arguments and disagreements, and things that used to take a few minutes are taking hours or even days, it is draining and that has an impact on peoples attitude to wanting to trade, the increased costs and paperwork mean some companies will avoid the trade altogether”
You don’t want your goods or services held up because a part of your procurement or supply chain hasn’t prepared for Brexit. Talk to each link in your supply chain to find out what preparations they have made for Brexit. Do they expect any delays in supplies and if so, will they be stockpiling, so as not to hold up deliveries? Will they be passing on price increases as a result of tariffs?
Talk to your international customers wherever they are and go through the process with them and of course any possible delays. It may only be temporary until everyone knows what they are doing, but it is likely that for at least the first few months of this year there will be delays at the borders. To ensure that this causes your business minimal disruption, look to stockpile goods, either in the UK or the EU, and if necessary, obtain additional storage space to hold it. Ensure that you have the cash flow to cover these extra costs too.
The first month has proven that things are much ‘trickier’ for importers & exporters and some international trade deals are still not complete, so further increases in prices could be decided, we all need to stay close to changes and be flexible in the approach to trade whilst the dust settles.
For further information on exports or imports into the UK or EU please contact [email protected]