Britain’s exports to the EU could fall by a further 8 percent as Finland, Luxembourg, Portugal and Greece benefit from Brexit

Monday, January 17, 2022 at 10.43

Former Luxembourg Prime Minister and former President of the European Commission Jean-Claude Juncker (L) waves as he welcomes former EU Brexit negotiator Michel Barnier (R) ahead of a meeting in Luxembourg. (Getty Images)

Brexit could reduce Britain’s exports to the EU by -7.73 percent by 2025, according to new analysis shared with By AM this morning.

This is largely due to smaller EU countries benefiting from the UK’s exit from the EU, according to the report by City broker IG Group, which evaluated export data to determine the impact of Brexit on international trade and to show areas of potential growth.

The three best countries to benefit from Brexit were Finland, Luxembourg and Portugal.

Other countries that benefited from the vacuum left by Britain after Brexit included Ireland, Croatia, Greece, Lithuania and Cyprus. The highest proportional increases occur in places where trade was smaller to begin with, the company found.

In Finland, exports of aircraft, spacecraft and parts thereof, e.g. estimates by 11,715.28 percent to 102.71 million. EUR instead of the predicted 0.87 mill. EUR.

Meanwhile, Luxembourg’s actual figures for exports show an increase of 2017.99 percent over estimates, to € 16.38 million. instead of € 0.77 million.

The company’s City analysts collected export data from the UK, EU countries and some additional selected countries to identify trends stemming from the impact of various factors that occurred in 2020.

The team evaluated the UK’s main exports before Brexit, such as precious metals, vehicles and pharmaceuticals, together with the largest exporters of the same products in the EU and Singapore to understand which countries were able to increase exports.

City-based Chris Beauchamp, IG’s chief market analyst at IG Group, said this morning that “Britain’s vote to leave the EU in 2016 represented a major leap into the unknown, and Covid also created an extra layer of complexity for international trade and cross-border investment. . “

EU-UK trade: more bureaucracy

Meanwhile, all UK companies could “give up importing” as a result of new strict rules that came into force on January 1, a former senior official in charge of Brexit planning warned recently.

Philip Rycroft, who was permanent secretary of the Department for Exiting the European Union (DExEU) between 2017 and 2019, said the changes, which took effect on January 1, will cause “child problems”, with some sectors being hit harder than others .

With the introduction of new barriers to trade with the block, Rycroft said companies can decide that it is “simply not worth the hassle”

The changes mean that importers will have to make a complete customs declaration on goods entering the UK from the EU or other countries. Traders are no longer able to delay the completion of full import tariff declaration for up to 175 days, a measure introduced to deal with the Brexit disruption.

There are separate provisions in place for trade with the island of Ireland.

Rycroft told BBC Radio 4’s PM program that the new rules may be too much for some companies.

“The Federation of Small Businesses estimates that only about a quarter of their members are ready for this, which is a bit surprising in a way because they had obviously had a lot of notice that this was coming,” he said.

“Let’s not forget that they’ve had a pretty hard year, most companies, with Covid and everything else, so many companies will not be ready.”

Philip Rycroft

“There will be pediatrics … but the big question is, how many companies end up thinking, ‘You know what? It’s just too much trouble,’ and giving up importing? Like some companies have already given up exporting because it is not worth it. ”

He added: “Obviously, companies exporting to the EU from the UK have already faced these rules for the best part of a year. So it will now be the companies in the UK that import from the EU (which) have to deal with this , essentially, new Brexit bureaucracy. “

The rules for country of origin documents have also become marginally stricter, with declarations to be submitted when goods arrive.

Rycroft said this will be “really complicated” for certain products that “contain lots of different bits or ingredients”.

Asked if the country is likely to see rising prices or empty shelves, he said: “I would not overdramatize it. I think there are new costs in the margins that will ultimately be borne by consumers.

“So HMRC reckons that the total cost of these new systems will be something like £ 13bn a year – that’s a lot of money regardless of the token spread across a large population like the UK, of course, there are modest increases in costs. through the supply chain.

“But in the margin there will also be some companies, as I said earlier, (who) think, ‘You know what? This is not worth the hassle.’ So there will also be a drop in the margins in the margins. ”

“That’s why the Office of (for) Budget Responsibility reckons that the net effect of this agreement on our wealth as a country will be to reduce it by around 4% in the medium term. That’s because trade between the UK and the EU will be much less free than it was when we were in the single market. “

DExEU closed in January 2020, with Brexit negotiations now being handled by the Ministry of Foreign Affairs.

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