Post Brexit - how easy is it to export from Northern Devon?

It has now been possible to review the progress we have made since we left the European Community.

Many had their very strong opinions on whether they were for or against Brexit. One of the abiding reasons why the decision to leave was taken, was because of excessive red tape and concerns regarding uncontrolled immigration. 

I am not seeking to reopen the Brexit debate, however, there is now clear evidence that Brexit has made it much harder for particularly small and micro businesses (these represent by far the largest majority of businesses across Northern Devon) to trade with the EU. 

Under the new trading arrangements, many firms have reported increased costs, excessive red tape, paperwork delays, and disruption.

The most recent survey we have conducted, is that these problems have not eased and that the likelihood is that they will increase in the near future. 

There is current evidence that one in eight small exporters have temporarily or permanently stopped trying to export into the EU. A further nine are considering doing so. While 33 per cent of those who try are encountering customs barriers and 18 per cent are encumbered by technical and procedural requirements for end products. 

Overall, nearly 70 per cent of companies felt that trading was more difficult than it had been 12 months ago. The ambition to continue to try is also limited because of the likelihood of fresh challenges in the UK and EU rule book, which will cause problems on both sides of the channel. 

This is not just about red tape, Covid has affected global supply chains.  Undoubtedly, this has disproportionately affected smaller businesses who simply do not have the resources needed to face the increasing costs of exporting. 

The EU-UK Trade and Cooperation Agreement, which began in December 2020, sets out preferential arrangements between the two markets in areas including trade in goods and services, digital, intellectual property, public procurement, aviation and road transport.

This was intended to allow tariff-free trade with the EU once Brexit took effect. What our research reveals is that this agreement is causing problems, such as, that goods can no longer be imported from the rest of the world and then exported tariff-free to the EU without sufficient processing. 

Similarly, goods cannot be exported from the EU and then distributed tariff-free from the UK back into the EU without the appropriate processing. 

Issues such as ‘rules of origin’ have also reduced the choice of components and ingredients for many of our manufacturers. 

Additional areas of difficultly include labour mobility, VAT compliance and different coding/ rules for industrial and electrical goods. 

This is rather gloomy reading, however, the big picture shows that UK exports into the EU have increased by just over seven per cent. This is largely led by bigger companies who can afford to tackle the red tape, bureaucracy, additional costs and delays. 

So, what does this mean for North Devon potential exporters? A number of companies have decided to expand their horizons and move further afield, markets such as Australia, Japan and the Middle East have opened up. Very recently this has frustratingly been affected by variable shipping costs. The current problems in the Red Sea are not helping.

Those small businesses who are being successful have cracked the problems of customs and tariffs and even, if necessary, the need to register for VAT in overseas countries. 

In moving from dealing with just the European market to a global market requires a clear understanding of which countries are the best fit for the corporate product or brand. 

Success is being achieved, particularly in areas such as with low carbon and high-tech products. Another key to success is a brilliant social media campaign. 

The opportunities for our local businesses are therefore now emerging. We should not be put off by red tape and other initial barriers.

There are some rich rewards here, we need to work closely with organisations such as the North Devon Manufacturing Group and our local authorities to get as much support as possible.