Trade with the European Union is becoming increasingly difficult for businesses, as?regulations on both sides of the Channel ?continue to?diverge.
A survey by the British Chambers of Commerce of 989 mainly SMEs found shortcomings in the Trade and Co-operation Agreement agreed on Christmas Eve in 2020.
It was designed to allow tariff-free trade with the EU once Brexit took effect.???
But services access has been limited by?rules on business mobility?and?only 16% of?exporters?think the deal is helping them to grow sales?in Europe, with 54% disagreeing.
Emerging issues like de minimis exemptions for low value parcels are also creating waves as the EU and UK work out their reactions to changes pushed by the US.
The EU is now removing its exemption in 2026, but the UK will not follow suit until as late as 2029. This risks harming the competitiveness of British firms exporting to the EU alongside trade diversion from Chinese companies into the UK. ???
The one bright spot is that awareness of upcoming changes in trade rules and regulations has improved significantly compared to last year. In 2024, more?than three quarters?of firms knew no details of?much of the?legislation.
But as the onslaught of changes has caused firms increasing cost and bureaucracy, more have kept on top of new legislation. Only 11% did not know about planned changes on steel tariffs, while just a third (36%) were unaware of EU customs and VAT rule changes.??
The BCC has sent its EU reset report to Government, providing?recommended solutions?to many of the problems.
Its top five proposals for?discussions in 2026 are:???
- Negotiate a deep SPS (animal and plant products) agreement to remove export health certificates
- Finalise UK and EU Emissions Trading Scheme linkage to exempt goods from Carbon Border Adjustment Mechanisms
- Establish a youth mobility scheme
- Secure full UK participation in SAFE – the EU’s Defence Finance Initiative
- Enhance VAT cooperation and customs simplification to reduce trade costs?
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