Small UK businesses shift £10bn of exports away from EU
Small businesses in the UK are diverting over £10bn worth of exports away from the EU claiming that they are “jumping before they are pushed” as concerns over the success of the Brexit negotiations rise again.
According to research from Aston University, small UK business firms are ramping up sales to other countries, mostly in South America and east Asia, in order to become less dependent on the bloc after the current transition period ends at the end of 2020.
Academics said they found the smallest micro exporters had switched as much as 46% of their new export growth from the EU to non-EU markets since the Brexit referendum.
Nevertheless, the EU still remains the UK’s single most important trading partner, accounting for about half of all imports and exports. The relationship is worth about £650bn a year.
Jun Du, professor of economics at Aston Business School, said: “This evidence suggests that UK exporters are jumping before they’re pushed – finding alternative markets worldwide for their products even before we know the outcome of the current UK-EU trade negotiations and any potential new barriers.
“Of course, we will need to see whether these patterns still hold true in the aftermath of the Covid-19 crisis.”
Negotiators from the UK and the EU are currently resuming trade talks after a long pause due to the coronavirus pandemic. The timeframe for a trade deal to be completed is shorter but UK politicians have already ruled out an extension of the transition period.
The government also confirmed there would be checks on goods going into Northern Ireland from the rest of the UK from January, despite his previous assurances this would not be the case.
A deal will have to be secured by the end of the year or Britain could crash out of the EU, which would harm UK firms that export to the bloc.
Hopes for a deal to satisfy both parties are fading as relations sour. Recently, Michel Barnier, the EU’s chief negotiator, used an interview in the Sunday Times to accuse Boris Johnson of backsliding on Britain’s commitments.