Brexit delays for the EU: how bad are delays for businesses with new rules and laws?

Trucks loaded with British pigmeat waiting to be shipped to Germany and packed in sausages died at UK ports this month while waiting in line for customs clearance.

It is a story that barely made an impact in the UK, as the country’s first month outside the EU was overshadowed by the coronavirus and the dark milestone of 100,000 deaths.

With cargo traffic well below normal levels, thanks in part to stock, the overall effects of Brexit were also less visibly dramatic than expected. The government avoided the embarrassment of several thousand trucks in the queue in Kent and was able to claim victory for its planning.

Companies tell a different story, of bureaucracy and delays that add up until higher costs. Elsewhere, hidden under the impact of With the blockages of viruses, Brexit has spread to every part of the economy, affecting everyone from online shoppers to fishermen, car dealers, bankers and farmers.

Some of the problems may be short-lived as companies deal with the situation. But as the UK tries to unravel an almost forged economic and trade relationship half a century, some friction will persist, creating an obstacle economic growth.

“People refer to many problems as initial problems,” he said. Sam Lowe, senior member of the Center for European Reform in London. “But while companies learn to fill out forms, we must recognize that the new bureaucracy is the new reality and that there is much more to come.”

UK shortages

The virus and Brexit can leave factories short of raw materials

Source: Confederation of British Industry

The range of headaches in the early weeks of Brexit was sometimes a scam, as Dutch customs officials seized a ham sandwich due to new meat and dairy import rules. Popular candy Percy Pig went on the news while retailer Marks & Spencer Group Plc dealt with the new rules on exports to Ireland.

But the changed landscape also represents a question of survival, especially for companies that depended on the movement of low-cost and hassle-free products inside and outside the continent.

“When the EU started taking ham sandwiches from truck drivers, because they say they don’t know if the meat meets EU standards, it was stingy and ridiculous,” said Essex pig farmer Fergus Howie, who runs the export company. Wicks Manor. “For them, being so bureaucratic at the border is really disappointing, especially when their trade for us is flowing normally.”

January may not even have revealed an accurate trading picture. Many companies stockpiled to avoid any chaos at the borders in the early days of 2021, but these stocks will not last long.

Government officials acknowledge that congestion may increase as flows between channels return to normal levels of around 75% today, although they do not expect them to reach the worst scenarios modeled in the past year. They also say that some difficulties are related to the need for truck drivers to have a negative Covid test instead of Brexit.

But companies say that what was once simple is now complicated. Documentation – especially for cargo with different types of goods from various suppliers, known as bundling – is among the problems that cause delays.

Some carriers returned to the empty continent to skip lines, which raised freight rates for six consecutive weeks, while others avoided Britain altogether. France-UK transport volumes fell as companies bypassed Britain, taking direct routes to Europe, such as the one launched on Monday between Dublin and Amsterdam. All of this is likely to get worse when Britain introduces its own customs controls in June.

Cabinet Minister Michael Gove said this week that goods are flowing “effectively”. Where there are problems, the government “will make every effort to help them adjust”.

Outside the ports, there was also a shock for consumers. British buyers EU online purchases are being affected by import duties. This may raise concerns about inflation: households’ prospects for price increases are already high.

Price Panic

UK consumer inflation outlook remains high

Source: Citigroup, YouGov

For Britain, the initiative to leave the EU was to escape what it said was its bureaucracy and overwhelming rules, and Prime Minister Boris Johnson had a chance to show the benefits just this week. With the EU’s Covid-19 vaccine campaign lagging far behind that of the UK, Johnson pointed to a “speed and agility” that would not have been possible in the bloc.

“We have been able to do things differently and better in some ways,” he told lawmakers.

The UK almost left without any trade agreement, only reaching an agreement on Christmas Eve. Even so, some industries remain in the dark about their future.

Finances were not included in the negotiations and now have a separate agreement that could take years to make. Meanwhile, the City of London is seeing parts of its business – like stocks and shares derivative trading – escaping.

Vacancies disappearing

Job vacancies in London’s financial sector have declined each year since the Brexit vote

Source: Morgan McKinley

In the first month, the problems were especially serious for Northern Ireland, which was a major obstacle in the Brexit negotiations. Images of empty supermarket shelves appeared in early January, and J Sainsbury Plc was forced to stock up on rival products.

The Northern Ireland border controversy it unexpectedly resurfaced on Friday night, when the EU said it would trigger a Brexit clause as part of the new vaccine export controls, before turning back.

Even fishing, which has become a symbol of Britain’s battle to “regain control” and an obstacle in the negotiations, was one of the first victims, despite the insistence of pro-Brexit lawmaker Jacob Rees-Mogg that fish now in British waters are “happier.”

The trade agreement has regained rights to far less Britain’s waters than expected. Some fishermen will end up with lower quotas for popular fish at home, such as the chips-shop basic food cod and haddock. Exporters are particularly affected because their shipments tend to group together several products that require the most different and new paperwork – customs, health and catch certificates.

Ultimately, the UK made a bet, changing trade with its biggest and closest trading partner in the hope it will be able to force new and better trade agreements with other countries. For companies transporting goods between the EU and the UK, the consequences are only beginning.

“Proximity is important,” said the former UK trade negotiator David Henig. “Continuous trade is a thing of the past.”

– With the help of Dara Doyle and Alex Morales