It is one month since the Christmas Eve post Brexit EU agreement came into effect. Since the historic result of the referendum in June 2016, right up to the end of last year, manufacturers have been struggling to work out what breaking ties with our biggest trading partner will actually mean for them. This task has been made harder due to the constant speculation underpinned by little actual detail about a deal, combined with the pressures of an unprecedented global health pandemic. It is no surprise that planning for new trading arrangements has proved to be extremely difficult.
Today Make UK published a new paper setting out the latest position across the manufacturing sector since exiting the EU. It highlights the key issues creating barriers to trade and makes recommendations for government that will help manufacturing remain as the backbone of the UK economy.
1. Even those companies deeming themselves “ready” have still faced disruption
Since the conclusion of the UK-EU Trade & Cooperation Agreement (TCA) manufacturers overall may have felt “ready” but in reality, they are also facing many challenges. Indeed 61% of companies said their business was ‘ready’ for the new trading relationship but were nonetheless still facing disruption. In comparison less than a quarter (24%) said they were ready, and their business has not experienced any disruption.
2. Supply chain disruption has been felt immediately
The impact of the new rules and trading relationship is already being felt. Some 61% of businesses are enduring supply chain disruption either importing or exporting to and from the EU and 32% are having their supply chains impacted in both directions.
3. New rules for products including rules of origin, conformity and product markings are a whole new world for many
The agreement includes product specific Rules of Origin, yet not all companies have experience of certificates of origin. A quarter of companies (25%) have not had experience but are aware of the process and a further 8% have not had experience and not aware of what the process entails. For those companies that have not had such experience, this will be a major challenge.
4. The NI protocol brings new checks but not all companies have taken the necessary steps
Northern Ireland protocol means that there will be additional checks on goods and declaration between Great Britain (GB) and Northern Ireland (NI). While a number of companies seem to be aware of these new checks, not all companies have put the necessary plans and practices in place. One in five companies say they are aware and have registered for the Trader Support Service in Northern Ireland.
5. Manufacturers are regularly sending employees to the EU for business but again these rules will change
Almost two-thirds (61%) of manufacturers are regularly sending employees to the EU for business purposes. This is unsurprising as many manufacturers provide a service as part of the manufacture of a good, undertaking activities such as servicing and maintenance as well as for training or attending business meetings. Despite this being a common and indeed frequent activity among manufacturers, three in ten companies are unaware of the new rules and requirements they need to send workers to the EU to undertake busines.
- Fast-tracking the training of good quality customs agents to smooth the flow at borders
- Government action to help coordinate the activities of hauliers and logistics firms and exporters
- Vouchers for advice and support relating to exporting processes and customs training support
- Tax cuts or rebates for three years to help firms cope with the additional costs of EU export paperwork
- A mechanism for EU Regulatory Tracking, Monitoring and Support
You can read more about our asks to Government and our findings by reading the full report here.