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Home / World / Although the UK has reached a trade agreement after Brexit, companies will still suffer damage

Although the UK has reached a trade agreement after Brexit, companies will still suffer damage

LONDON — Business groups are calling for more time to adjust to the new UK-EU trade agreement, saying that the new rules that will take effect next week may disrupt the previously free-flowing annual trade of more than $590 billion in goods.

The UK and the European Union said on Thursday that they have signed an agreement on future relations, laying the foundation for the 2016 UK referendum to withdraw from the EU. For companies, this is a relief. They worry that the four-year political negotiation may end without a trade agreement, which will result in the two sides imposing tariffs on goods.

However, despite the suspended sentence, for nearly a century and a half, starting from January 1, food, cars and other goods transported between the EU and the UK will still face customs inspections and need to meet different standards and regulations.

The British government estimates that there will be an increase of 21

5 million customs declarations each year, nearly 600,000 a day, and companies say this will take time and money to organize. Some companies will need to pay inspection fees, seek import licenses and figure out how to calculate VAT. Britain’s food and animal exports to the EU will be inspected upon arrival, and certain professional qualifications will no longer be automatically recognized. Some companies said that they do not fully understand how to respond because they have not yet seen the details of the trade agreement.

In order to predict the queue time and the large amount of new paperwork in the UK and European ports, business groups are now calling on the UK and the EU to help companies cope with changes and alleviate any new frictions in trade, including giving companies time to adapt to the new rules.

Tony Danker, director general of the Confederation of British Industry, said: “It’s so late that both sides must take immediate measures to maintain trade. It’s vital.” The business lobby hopes for six months. The grace period to allow the company to adapt to the new rules without penalty.

Adam Marshall, the director general of the British Chamber of Commerce, said that companies face a “huge task of adapting to the new arrangements one week before the new arrangements take effect.” He said that many companies are already responding to this pandemic, and that it’s Christmas. The staff was hired during the holidays and the new regulations were gradually adopted.

The American Chamber of Commerce in the European Union also called for the gradual adoption of new rules, saying that member states are worried about how quickly they need to adapt. At a briefing on Thursday, an EU official said when asked about the possible leeway for the company: “The agreement has no grace period… We think the company has a lot of time to prepare for this.”

A spokesman for the British government said that it is preparing for the upcoming changes, including investing in employment, technology and infrastructure in border areas. He also said that border control will be implemented in phases.

Thursday’s transaction did not fully address the service industry, such as the UK’s huge financial sector, which will automatically enter the EU market on January 1.

Pfizer and other pharmaceutical companies worry about additional paperwork and shipping interruptions the company

GlaxoSmithKline PLC has stored medicines, and automakers including BMW Stock company

Overstocks have accumulated, and aircraft manufacturer Airbus SE has asked suppliers to keep more parts.

Airbus said on Thursday that it is happy to avoid the potential damage of a no-deal situation, but it still needs to analyze the impact of the agreement on its business.

Simon Cotton, chief executive officer of Johngins of Elgin Ltd., a Scottish cashmere garment manufacturer, said: “Although the free trade agreement is a major relief, doing business in Europe is still more complicated than it was in the EU. “He cited additional documents on various issues, including how EU customers get tax refunds.

According to law firm Clifford Chance (Clifford Chance) estimates that the extra red British company may cost British companies about 17 billion pounds a year, or about 23 billion U.S. dollars, while EU companies will spend about 14 billion pounds.

Meat exporters based in the European Union and the United Kingdom will now require a certificate confirmed by a veterinarian to prove that every package they sell meets each other’s health standards. British exporters stated that there are not enough veterinarians to obtain the certificate.

A staff member restocks at the meat counter of the Selfridges department store in London.


Kirsty O’Connor/Zuma Press

Since November, Delamere Dairy has been storing packaging and ingredients at its base in northern England due to anticipated delays at the border.

“We are worried about the potential destruction of the port. When you need packaging for packaged products, you don’t want your packaging to be seven miles long,” said Ed Salt, Delamere managing director. Even though it is mainly sold in the UK, the company sends goat milk back to Germany for packaging before returning to the UK.

It must also heat treat the pallets used to transport the products to comply with EU regulations for pallets from outside the group.

EU companies’ sales of goods and services in the UK exceed the sales of UK goods and services in Europe. However, merchandise trade between the United Kingdom and the European Union accounts for a higher proportion of its GDP, about 13%, while European exposure to the United Kingdom accounts for nearly 3% of GDP.

However, certain areas of the European Union are particularly easy to trade with the UK.

A freight train was unloaded in Cuxhaven in northern Germany.


Patrick Stolaz/AFP/Getty Images

According to data from the Organization for Economic Cooperation and Development, the United Kingdom accounts for 10.5% of Ireland’s exports and 27% of Ireland’s imports, while Germany’s trade surplus with the United Kingdom is 29 billion pounds, mainly because it sells nearly 600,000 cars every year. British.

With the exception of the US$88 billion two-way auto trade between the UK and the EU, few industries will feel this disruption.

The UK is Europe’s second largest car market and the country’s largest seller, Ford Motor Company the company

, BMW, Volkswagen Stock company

Daimler Stock company

-Mainly assemble vehicles in the European Union.

Last year, about 13% of the cars produced in Germany were sold to the United Kingdom, and the United Kingdom is Ford’s third largest market worldwide, accounting for about 30% of its sales in Europe.

At the same time, British-made parts and components, including Ford’s engines, are exported to European factories, and cars produced by these factories will be sold all over the world.

The European Automobile Manufacturers Association stated that it is impossible to conduct a comprehensive assessment of the trade agreement until all the details are made public, but “there are still major challenges.”

It said: “In the form of new customs procedures, trade barriers will seriously affect trade in goods.”

Heralding a potential bottleneck, Japanese automaker Honda Motor the company

After a lack of key parts, an automobile factory was idled in England in early December. It blames the congestion in British ports, Brexit and Christmas-related inventory pressures, and the devastation caused by the pandemic.

Before Britain was originally scheduled to leave the EU single market, trucks lined up across the English Channel. (Originally released on December 15, 2020)

Some car companies, such as Aston Martin Lagonda Holdings PLC, have stated that they may fly parts to the UK to avoid future interference. The fictional British spy James Bond’s automaker purchases 50% of its parts abroad.

Analysts pay special attention to Ford, Toyota and other mass producers the company

And France’s PSA Group,

It deploys a timely supply chain where the arrival of parts is closely coordinated with assembly.

For example, Toyota usually only stays on the production line of its British car factory for four hours. In 2015, French ferry workers went on a three-week strike, interrupting operations for two months.

Calum MacRae, an automotive analyst at GlobalData, said: “When you have been operating a factory on a single market concept for two decades, the problem becomes more and more complicated.”

Write to Alistair MacDonald, email: alistair.macdonald@wsj.com

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