British companies have welcomed a Brexit trade deal with the European Union, but are begging for a grace period to allow them to adjust to new measures and regulations.
UK Prime Minister Boris Johnson and European Commission President Ursula von der Leyen welcomed the historic intermediation of an agreement on Christmas Eve, more than four years after Britain first voted for leaving the union. However, the agreement was signed just days before the end of the Brexit transition period on December 31, giving companies little time to prepare for a new relationship with the country’s most important trading partner.
Although the agreement eliminated the prospect of costly tariffs and quotas on products, there are still a number of changes to come, from new licensing standards to paperwork requirements. The Covid-19 pandemic also makes preparation even more challenging.
“Arriving so late in the day, it is vital that both sides take immediate steps to keep trade moving and services flowing as businesses adjust,” said Tony Danker, director general of the Confederation of British Industry, the largest business lobby from the UK in a statement. “We need urgent confirmation of grace periods to smooth the cliff edge on everything from data to rules of origin, and we need to ensure that we keep goods in transit across borders.”
Other business groups covering auto manufacturing sectors for small businesses have also contributed.
“A phasing-in period is critical to helping companies on both sides adapt and efforts must now be continued to ensure a seamless implementation,” said Mike Hawes, executive director of the Society for Motor Manufacturers and Traders.
Stephen Phipson, executive director of the Make manufacturing lobby group UK, called for an “adjustment period”, citing concerns about the impact of the coronavirus.
“Even without the pandemic, it would increase credibility to believe that companies that export hundreds of billions of pounds of goods each year could adapt to a fundamentally different business model in just one week of work,” he said.
The Institute of Directors said government support would help companies adapt.
“Whenever possible, changes should be implemented,” said Director-General Jonathan Geldart. “Financial support for SMEs, such as vouchers for professional advice or tax incentives to help them adjust, would help companies get ahead in the new year.”
Mike Cherry, president of the Federation of Small Businesses, echoed his call for help.
They need “tangible, targeted support, including £ 3,000 ($ 4,000) transition vouchers that small businesses can spend on the training and consultancy needed to navigate a new business relationship with our largest export market,” he said.
Adam Marshall, director general of the British Chambers of Commerce, said that an adjustment period should not be difficult to grant “since it is normal for free trade agreements to come with phasing-in measures, and this should be no different”.