The point scoring has not so far been surpassed by common sense and cooperation, leaving issues for all to deal with.
Restrictions and uncertainty have impacted on most business sectors, although not in an equal way. The seafood industry has been hit, amid failures to negotiate fresh deals with EU countries, the wider food sector more so.
UK food and drink sales to the EU in February 2021 were 40% lower than in 2020, sales of milk and cream were down 96%, fresh meat almost 80%. The Food and Drink Federation has pleaded with Boris Johnson to engage in fresh talks.
Data tends to confirm that leaving the European Union is a primary cause, rather than the pandemic. Since the transition period ended, food and drink exports to non EU countries has risen, rather than almost halved.
The financial sector is also under pressure, with Amsterdam now holding Europe’s largest stock exchange. The London Stock Exchange Group and other significant players have decided to make Amsterdam their new home.
A Shared Concern
The economic outcome of Brexit is not one sided, with most of Europe going into a double dip recession in the first quarter of 2021. The pandemic naturally mattered but falling trade with the UK added to the problem.
Whilst this may seem like shared weakness, the opposite is also true. A few EU countries could see growth as elements of trade move to Europe but the majority will be worse off, they share our wish for change.
This includes UK companies who have decided that trading with Europe is no longer worthwhile and those making similar decisions in the other direction. They did not wish to stop, to lose established clients.
An Impractical View
Boris Johnson decided he wanted a “run of the mill free trade agreement”, rather than a close trading relationship. The underlying cause of this is a fear of common regulation, rather than encouraging business.
The political hope is to create frameworks for voluntary cooperation on regulation, with each side in theory trying to limit regulatory barriers, whilst still being free to make their own decisions.
An idea based on maintaining sovereignty but impractical. If you want a solid trade relationship, this must be based on trust as much as independence.
Providing financial services across borders is a case in point and the outcome is that the EU will restrict access, rather than grant equivalence. The reason parts of the City are relocating to mainland Europe.
An Open Market
Few people either side of the channel have desribed the UK-EU Trade & Cooperation Agreement as a comprehensive outcome. More or less a last minute effort, to be able to say that we have a deal.
We are free to trade with other parts of the world but nobody can summon a giant tug to tow Britain elsewhere. For a fair share of our physical trade and specialist services, Europe will always be a natural partner.
The EU have now voted to close Brexit in a legal sense but they and our government must in practice do the opposite. The volume of ATA carnets we have recently provided for travel to the EU is testimony to the wish to trade.
Hatchets need to be buried, the spirit of trade we have always had with Europe be revived. We believe this can happen, because the business community’s will is strong.