EU, UK businesses face trading issues amid post-Brexit chaos
With the start of 2021, businesses in the UK and EU are struggling to trade due to post-Brexit trade deal. As Britain left the 27-nation European Union at the end of 2020, UK firms are dealing with new expenses in the form of border checks and custom declarations for the past one week.At a time when countries across the European Union are working to reviving their economy, businesses are facing the implications of Brexit deal. Various British retailers, food delivery, logistics and courier companies are halting or reducing their shipments into the EU in the wake new tariffs and border procedures.
On Friday, international delivery company DPD paused its parcel delivery from the UK to EU. The delivery giant released a statement over the matter, asserting that new border regulations and increased paperwork have put extra pressure on their turnaround and transit time. DPD added at around 20 percent of delivery packages had incomplete or incorrect data, so they had to be returned to senders, due to which it was forced to pause its service.
Danish logistics company DFDS, on Friday, said that a large number of its trucks were either delayed or refused due to lack of correct paperwork. British retailer Marks & Spencer has suspended around 400 products from its food halls across 20 stores in Northern Ireland, citing new UK-EU import legislations. M&S also stated that it was facing difficulties in supplying products to its stores in France, Ireland and Czech Republic due to the rules of origin regulations in the deal. Trading between Northern Ireland and rest of the UK will also see new border checks as part of the Brexit terms.Many businesses were unprepared for the regulatory and logistical impact of Brexit. Even as a tariff free Brexit trade deal was agreed by the government on December 24, a number of UK businesses including food and clothing are facing levies.
According to the Governor of the Bank of England, Brexit deal is likely to cost the UK economy about 2 percent of GDP in the coming years. Financial analysts have also indicated that the British economy can fall in the double-dip recession due to the crisis. The country imposed its third nationwide lockdown in the last week of December 2020 due to the new COVID-19 strain. Amid the ongoing post-Brexit chaos, the British government has warned businesses and traders of increasing disruptions in the coming weeks.