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Brexit 100 Days Study: Companies Break Trade with Great Britain

D.He attacked the Brexit companies more clearly than he feared. Four months after the new rules on foreign trade with Great Britain were launched, two-thirds of companies assessed negative results earlier than expected, according to a recent survey by the British Chamber of Commerce in Germany (BCCG) consulting firm KPMG. . German companies with business in Great Britain focused. As a result, 17 percent decided to suspend foreign trade with the island altogether.

“The current results are a clear warning signal,” said BCCI President Michael Schmidt. “The fact that companies are considering or deciding to end foreign trade relations altogether shows the extent of the continuing unresolved issues between the two countries.”

KPMG Board Member for International Trade Andreas Klans warned that this was not a temporary development. The volume of trade between Great Britain and Germany has been declining rapidly since the 2016 Brexit referendum. “In the first 100 days, the implementation of Brexit led to a further deep decline in sales and revenue due to additional administrative costs, increased customs duties and taxes and transportation costs.”

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After the decision to leave the EU, Brussels and London fought hard for four and a half years to reach an agreement for a new trade regime. On Christmas Eve, they found a solution just a week before the scheduled departure date.

Detailed information on the effects is not yet available, especially since the infection is currently causing changes in the flow of substances. British foreign trade with the European Union fell sharply in January. In February it recovered from the previous month, but was lower than the 2020 value.

“Foreign trade with Great Britain has become significantly more expensive,” Glans said. Logistics and freight costs, customs systems, and the setting up of additional warehouses will all contribute to this. This particularly affects businesses with low margins. You have to send costs to customers, but lose competitiveness. However, for many online stores, shipping has become so expensive and complicated that it is no longer worth it.

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The effects on the British food industry are particularly severe. In February, the Food and Beverages Federation’s latest figures showed that exports to the EU fell by 41 per cent to சதவீதம் 53 million (மில்லியன் 61 million) from 53 per cent.

Food is subject to particularly stringent entry checks and must provide additional certifications and veterinary documentation. It is very difficult to export individual product groups. Milk and cream exports fell by 96 per cent and poultry exports by 80 per cent.

In the opposite direction, trade has hitherto been less affected. Great Britain will not implement future rules and related import restrictions until early 2022. “There will be another wave by the end of this year,” Clans warned.

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Sales and profit growth underscore the effects of Brexit. Of the companies surveyed, 50 percent recorded a decline in sales and 44 percent recorded losses. The surveyed companies cover different industries and company sizes. Glans said automation, manufacturing and mechanical engineering are all severely affected by the changes.

Respondents named additional administrative costs (76 percent), new or additional customs duties and fees (45 percent) and freight rates (38 percent) as the biggest operational challenges. Many EU-centric companies in their work are facing many of these problems for the first time.

It is only in the last few weeks of negotiations that the so-called rules of origin attached to the contract have become particularly complex. Accordingly, there was little time to prepare the necessary processes. Accordingly, only trade in goods produced in whole or in part in the respective other trade area is obligated.

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Take laundry as an example: the design is made in Germany, the fabric is made here. Sewing in Southeast Asia takes place before the piece is sent back to Germany for quality control. Such a laundry is not exempt from customs duties as it has added value outside the EU when exported to Great Britain.

“Because of the complex terms and time-consuming methods, every fourth company since Brexit has voluntarily accepted a truly avoidable tariff permit,” Glans said. Although a product does not actually have to be destroyed by customs, in many cases the evidence is that companies accept customs.

The consultant did not expect any improvement in the medium term. Other markets are currently opening up good opportunities for that. “China and the United States are the most important markets for German foreign trade, and they are growing.”

Nevertheless, Schmidt identified one positive aspect of the difficult situation: more and more companies settled in Germany. “We are getting more and more inquiries from British companies who want to settle in this country in order to maintain trade relations with Germany.” However, this development cannot hide the fact that trade relations between the two countries have been reduced. Temporarily.

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