Britain, EU trade suffers nearly one month after post-Brexit deal

A month after United Kingdom (UK) Prime Minister (PM) Boris Johnson
signed the post-Brexit trade deal, UK and European Union (EU) are still stuck in the
crosshairs of the deal, as duties and taxes are disrupting commercial ties
between the two. This has led small firms to pile on extra costs, making
cross-Channel trade unprofitable, AFP reported.

Changes brought in to effect since January 1, 2021 have made it “commercially
and practically impossible for us to continue actually shipping to the
EU”, laments cheesemaker Simon Spurrell, owner of the Harlington creamery.

As per new regulations, Spurrell must now include a food health
certificate, costing £180, regardless of the size of the package, signed by a
veterinarian with each order sent to the bloc.

A big price to pay for the creamery, which previously relied on EU
customers for around one-fifth of online sales.

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“We may just have to abandon the EU market completely until both
sides come to their senses,” said Spurrell, who is now eyeing sales into
North America to help fill the gap.

Even though Britain struck a tariff-free trade deal with the EU, British
customers purchasing goods from the EU with a sale price more than £135 have to
pay value-added tax (VAT) of nearly 20%. They may have to also pay customs
duties and higher courier charges.

The result is that some EU-based companies, mainly small ones, have
decided to stop selling products to buyers in Britain.

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“It certainly isn’t a tariff but nevertheless it’s going to have an
implication for UK customers and make goods from the EU more expensive,”
said Gary Rycroft, a partner at law firm Joseph A Jones & Co in Lancaster,
northern England.

For businesses, there is also the headache of “rules of
origin”, bringing new charges levied on goods exported from the UK that
have been made with imported materials.

Around 20% of small and medium-sized enterprises have suspended exports
to the EU owing to the new rules, revealed a recent study by UK accountants UHY
Hacker Young.