Directors reveal extent of falls in UK-EU trade

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Nearly two in ten business leaders who trade with the EU stopped doing so at the end of the Brexit transition period in January, IoD research has found

The number was discovered in a survey of 900 directors who were polled as the Office for National Statistics prepared to publish figures for the first month of 2021.

The number was narrowly split between those who indicated they had stopped trading temporarily and those who reported it as permanent.

Directors selling both goods and services were most likely to have halted EU trading overall, with those selling services being more likely to do so permanently relative to goods-only traders. Similarly, those in financial services were far more likely to be permanently stopping EU trade, and few reporting this in manufacturing, with more doing so temporarily.

Businesses are also clearly focused on the more immediate challenges still posed by the impact of the end of transition; at 62 per cent, nearly three times as many report seeing no opportunities out of Brexit as those who do 23 per cent. However, a notable minority also indicate uncertainty over this in the Don’t Know category (15 per cent), reflecting the degree to which the UK is still early on in the adjustment phase.

Now that the UK is independently sovereign, proactive cooperation on an equal footing must be the priority

“This should serve as a call to action for government. While still a minority, the hit to trade with our largest and nearest market needs to be addressed to ensure it does not become a permanent dent in our global ambitions,” said the IoD’s Head of Policy Roger Barker.

“While it has recently taken remedial steps to help businesses adjust to life after Brexit, notably through the SME advice grants and internationalisation fund long called for by the IoD, engagement with the EU to smooth and enhance our new trading arrangements is urgently needed.

“Now that the UK is independently sovereign, proactive cooperation on an equal footing must be the priority.

“Business wants to see a twin-track approach to stabilising and repairing our trade with the EU, while robustly pursuing new deals with other countries that will unlock new markets and cut costs to trading with old friends. To help industry recover and build back better, going global must look both near and far when it comes to the needs of our economy.”