A new survey conducted by the BCC’s Insights Unit, involving 1,111 businesses (92% of which are SMEs), highlights the growing urgency for the Government to reassess its trade relationship with the EU.
The BCC’s report, reflecting on the fourth year post-Brexit, reveals fresh challenges as regulatory divergence continues to complicate trade for businesses on both sides of the Channel.
The Trade and Cooperation Agreement (TCA), established on Christmas Eve in 2020, was designed to enable tariff-free trade between the UK and the EU after Brexit. However, the agreement has left services access restricted by mobility rules, and only 15% of exporters feel the deal is helping them expand their sales in Europe, while 41% disagree.
Nearly two-fifths (41%) of exporters believe the Brexit deal is not helping them increase sales. Almost half (46%) of businesses are calling on the Government to simplify the process for UK staff to work in the EU.
Additionally, more than three-quarters (77%) of traders are unaware of the new safety and security regulations impacting EU imports in January 2025.
In response, the BCC has submitted a report to the Government outlining the main issues businesses face due to the TCA, along with potential solutions to address many of these challenges.
The survey also revealed that, in addition to easier movement of personnel between the UK and EU, 36% of businesses are calling for reduced VAT requirements on exports, while 24% are pushing for mutual recognition of professional qualifications.
When asked about the biggest obstacles to exporting, businesses identified customs procedures and documentation (45%), export documentation (39%), regulations and standards (36%), and tariffs (34%) as the most significant barriers.
Awareness of upcoming changes to trade rules and regulations, whether from the UK or the EU, was found to be shockingly low, with over three-quarters of firms unaware of key legislative developments. These include changes to the Carbon Border Adjustment Mechanism (CBAM), the Border Target Operating Model (BTOM), safety and security declaration requirements, and new rules governing business-to-business parcel movements to Northern Ireland.
The BCC’s TCA Four Years On report outlines 26 recommendations to enhance UK-EU trade.
Its top five proposals for 2025 discussions are:
1. Negotiate a deal with the EU to simplify or reduce the complexity of exporting food for SMEs.
2. Create a balanced Youth Mobility scheme between the UK and EU, covering school visits, exchanges, and a time-limited work option for young people.
3. Develop new arrangements for regulatory changes to minimize business disruption and improve awareness of their impact.
4. Establish a supplementary agreement, similar to Norway’s, to exempt smaller firms from needing a fiscal representative for VAT in the EU.
5. Negotiate a deal that allows UK firms to travel and work in Europe for extended periods, with mutual recognition of professional qualifications.
The full report – ‘The Trade and Cooperation Agreement Four Years On’ can be found here.