Brexit red tape on British businesses has caused goods trade between the UK and the EU to decline, and the situation is worsening, a study has warned.
Many smaller UK producers have ceased exporting small quantities to the EU after encountering more rules and regulations, according to a report by Aston University Business School.
Between 2021 and 2023, the study calculated that UK goods exports to the EU were down by 27%, while imported goods were 32% lower than they would have been had Brexit not occurred.
The report does not include the services sector, which has performed better than many experts had anticipated since Brexit.
The variety of trade export goods has also decreased, the study found, with 1,645 fewer types of British products exported to every EU country.
The authors attributed this to smaller British producers abandoning exports to some EU nations after facing increased red tape.
Mary Quicke of Quicke's Cheeses in Devon told the BBC’s Today programme that she found it "really, really difficult to deal with all the regulatory burdens".
She said she used to supply four customers directly in the EU, but "we had to give them away to somebody else".
"We just don't have the people to do the paperwork."
'A grinding halt'
Adam Sopher, co-founder and chief executive of Joe & Seph’s popcorn, has also found post-Brexit regulations burdensome.
He established the company 13 years ago, and it now has a £8 million turnover with 70 employees.
He said Brexit was “initially very challenging. We were being asked for vet certificates for caramel popcorn because it contains butter."
Before Brexit, individuals, cinemas, and retail stores in the EU could order popcorn online, and it could be sent by Royal Mail or a courier service. However, "all of it came to a grinding halt."
Brexit has led to a “huge amount of extra costs because of the added administration,” he said.
Bulk deliveries to the EU have since recovered, but where it used to cost around £130 per pallet, it now costs £230-£250, primarily due to red tape and administrative fees.
“There’s a huge amount of opportunity for growth if these rules can be improved,” he added.
The report noted that the "negative impacts of the [trade agreement] have intensified over time, with 2023 showing more pronounced trade declines than previous years".
Jun Du, one of the authors of the research, told the BBC that there had been an increase in regulations, such as "product standards, safety checks, and labelling requirements".
"While these measures do protect consumers, competition, and the environment, they also increasingly bring difficulties and costs for traders," she said.
The study highlighted that agrifood, textiles, and materials manufacturing (wood and paper) have been the hardest hit.
Trade with more distant EU countries has also been the most affected, including Commonwealth allies such as Cyprus and Malta.
However, the report's authors noted that a small number of sectors have proven resilient, particularly in terms of exports to larger EU economies like Germany and France.
The tobacco, railway, and aircraft sectors saw an increase in the variety of exports to EU nations.
A government spokesperson said it would "work to improve our trade and investment relationship with the EU and tear down unnecessary trade barriers, while recognising that there will be no return to the single market, customs union, or freedom of movement."
The BBC understands that in recent meetings with the government, business representatives were invited to contribute early ideas on “resetting” the trade relationship with the EU, with a focus on “economic security”.
Progress is unlikely until next year when the new European Commission is firmly established, and the UK has completed its new industrial and trade strategies.
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