After a four-year period of negotiations and uncertainty, the Government delivered the Christmas present many businesses were hoping for with a free trade deal with the EU.
Business and industry experts have broadly welcomed the deal, although it will still need to be signed off by all 27 EU member states in the European Parliament.
The deal promises that there will be no tariffs or quotas imposed on exports from or imports to the UK, allaying fears in many quarters of a no-deal that could have seen widespread price increases.
Helen Dickinson, chief executive of the British Retail Consortium (BRC), welcomed the announcement of the deal, saying: “After years of campaigning for zero-tariff trade, we welcome the announcement of a free-trade agreement between the UK and EU. This protects consumers on both sides of the Channel from billions in import tariffs on everyday goods. Given that four-fifths of UK food imports come from the EU, today’s announcement should afford households around the UK a collective sigh of relief.”
She added: “The UK and EU governments have taken a crucially important step in agreeing a zero-tariff agreement, to the benefit of customers all over Europe. They must now work to implement this new arrangement as soon as possible, ensuring there are no tariffs from day one, and finding new ways to reduce the checks and red tape that we’ll see January 1. The BRC and the rest of the retail industry will be scrutinising the terms of this deal in the coming days.”
To put the landmark agreement into a KBB context, Tom Reynolds, chief executive of the Bathroom Manufacturers Association (BMA), said: “The news just before Christmas that there will be no new tariffs on UK-EU trade was very welcome. A large portion of bathroom products sold in the UK come from the EU, and for the few companies manufacturing on these shores the EU is a vital export market. It great this trade can continue without duties.
“However, we need to be realistic that even with a deal, the new year brings new trade barriers. Importers from the EU will be subject to much additional customs paperwork. BMA is still analysing new technical barriers to trade, for example, on conformity assessment where it looks like double-testing and marking will be required from 2022.”
The deal was also welcomed by Richard Hibbert, national chair of the Kitchen Bathroom Bedroom Specialists Association (KBSA), who said: “The Brexit deal is very welcome and takes away the threat of significant tariffs, which is a huge boost for independent retailers. There may well still be some price increases to come, but at the moment it is early days, and all of the details are not yet know.”
But Hibbert also voiced concerns over the supply chain. He said: “It will be a learning curve for us all as many suppliers that import kitchen products do not seem to know what the impact will be. The market is already experiencing delays on deliveries due to the pandemic and the recent port closures. We may experience issues with getting spares in good time in the future, as it will not be viable for these to be delivered ad hoc when required, as they are now.
“We have all had to adapt to changing circumstances over the past 12 months and the Brexit deal means there is more to come. It is unfortunate that after so many delays, the Government urged businesses to get ready with only weeks to go, and then the deal finally came a few days before Christmas.
“It will be some time before we can assess the impact. In the meantime, it is business as usual and the KBSA remains a source of information and guidance for independent retailers wishing to keep up to date.”
Concerns over supply chain delays were echoed by the BRC’s policy advisor William Bain, who said: “This is the biggest imposition of red tape that businesses have had to deal with in 50 years.”
Around four million lorries pass through Dover, Calais and the Channel Tunnel every year. Under new rules, goods entering the EU from England, Scotland and Wales face new paperwork and checks, including: customs declarations, rule of original checks and product safety certification.
A recent survey of our kbbreview100 expert panel of retailers showed that 75% of them believe supply shortages would be the biggest challenge the industry faced during 2021 and new red tape that could impede the flow of goods into the UK will do little to allay those fears.
And although the UK Government is delaying full control on goods entering the UK from the EU for a further six months, goods entering the EU from the UK were subject to full checks from January 1.
Commenting on the trade deal, Dame Carolyn Fairbairn, director-general of the Confederation of British Industry (CBI), said: “If agreed by parliament, this deal unlocks a transition period, guarantees rights of the four million citizens living abroad in the UK and EU, and opens a pathway to a new EU/UK partnership. It would keep trade flowing freely across the island of Ireland and, most importantly, avoid a damaging no-deal scenario.
“Yet business has serious concerns about the direction of the future UK-EU relationship. Decades of free and frictionless trade with the UK’s largest market, forged by thousands of firms big and small, must not be abandoned. Frictionless EU trade and regulatory alignment is vital for UK prosperity and jobs.”
On behalf of the EU, European Commission president Ursula von der Leyen said: “It was worth fighting for this deal because we now have a fair and balanced agreement with the UK, which will protect our European interests, ensure fair competition, and provide much needed predictability for our fishing communities. Finally, we can leave Brexit behind us and look to the future. Europe is now moving on.”