A Government report published recently analyses the impact that both Brexit and COVID pandemic had on UK trade.
The Office for National Statistics (ONS) latest report, ‘The impacts of EU exit and the coronavirus on UK trade in goods’, highlights the decrease in imports and exports to both the European Union (EU) and the rest of the world.
ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘The major new Government report examines UK world trade figures in the first quarter (January-March) of 2021 and compares them to the same period in 2018, before any potential impact of Brexit preparations and the pandemic on exports and imports. This comparison gives the true picture of the damage done to UK trade by both events.’
‘Total trade in goods with EU countries decreased by 23.1% in the first quarter (Q1) of 2021 compared to Q1 2018. Contrary to the optimistic claims of Brexiteers during the referendum, this was not balanced by an increase in trade to non-European countries, such as the USA. Non-EU trade declined 0.8% in the same period, though total trade with non-EU countries surpassed that with EU countries in the first quarter of 2021 for the first time’
55% of exporters are blaming Brexit for the trade issues
The analysis is also showing that in 2021 the trade has been impacted more by Brexit than by the pandemic. In February 2021, the report shows over 55% of exporters declaring Brexit changes are causing more obstacles, compared to 10% of exporters saying Covid was a real issue.
Despite the fact that the end of the transition period and all the changes that came along were completely foreseeable, the Government has not done, in our view, their utmost to prepared for this massive change. Small or big businesses, private individuals and all the UK importers and exporters could have been better placed for Brexit long before the actual changes came along, in order to avoid the massive difficulties we are experiencing today.
Two of the UK’s biggest partnerships are collapsing
‘It’s small wonder that trade with Germany (the UK’s biggest EU partner) and Ireland – two of Britain’s main trading partners – has collapsed significantly. Between December 2020 and January 2021 alone, Germany experienced the greatest fall in UK trade of any major trading partner – £1.7 billion. In fact, since Q2 2020, the UK has imported more from China than it has from Germany.’
‘Exports of goods to Ireland saw the greatest proportionate fall of the UK’s top 5 exporting partners after the EU transition period ended. They fell by 47.3% (£1 billion) between December 2020 and January 2021, while imports from Ireland fell by 4.4% (£0.1bn). ‘says David Jinks M.I.L.T.
The main idea of the report is to highlight that the pandemic was not predictable at all, but the transition period was. Furthermore, ParcelHero’s Head of Consumer Research adds ‘The key takeaway from this report is that UK trade has not just hit a run of bad luck. While no one could have predicted the pandemic, the end of the EU transition period was entirely foreseeable and its worst effects the result of an 11th-hour deal that came too late for most exporters. The deal contained huge fudges, including both the Northern Ireland Protocol and overcomplicated proof of origin requirements to prove items were made in the EU or UK.’
The transport industry is one of the most affected sectors, and all the parties involved (e.g freight forwards, small or large hauliers, importers and exporters) are still experiencing difficulties even after 6 months, due to the massive changes and new requirements and restrictions.
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