Two years have passed since the UK signed a trade deal with the EU, but small businesses such as Doncaster-based Apothecary-87 still face difficulties trading across the English Channel.
Sam Martin's range of premium beard oils and hair balms took off rapidly when his company was founded in 2012 but export growth came to a shuddering halt when the EU -UK trade agreement came into force on December 31, 2020.
Before the UK voted to leave the EU, his business was 75 per cent exports and the rest in the UK, but now it's less than that because of the costs and difficulties of getting products to those countries.
The British Chambers of Commerce said in a report that Martin's frustration was typical of small and medium-sized companies that were now facing structural rather than temporary problems with the deal.
More than three quarters of companies that were affected by the deal said it was not helping them increase sales, while more than half said they faced difficulties adapting to the new rules for trading goods, according to a survey by the British Chambers of Commerce.
Shevaun Haviland called for an honest dialogue with the government over how to improve the deal.
There are very few easy fixes to the many problems that businesses face trading with Europe, but it is disappointing that almost two years after the TCA was first agreed that nothing has been done to find solutions to some of these issues
A Swiss-style deal with the EU to eliminate checks on plant and animal products, a Norway-style deal to reduce VAT on low-value imports and ongoing recognition of EU industrial and electronic product standards are some of the demands made by the British Chambers of Commerce.
An EU-UK deal for VAT and an agreement to deepen EU co-operation on product regulation should be considered by Britain in the future, according to the British Chambers of Commerce.
Boris Johnson said that there would be no non-tariff barriers to trade when he announced the eleventh-hour deal with the EU.
Martin said that Apothecary-87 faced a number of challenges, including higher import costs caused by a weaker pound, longer lead times for obtaining ingredients, the need for cosmetic import licences, and payment of import VAT.
He said that online retail customers in the EU that had previously bought a single £10 product were facing VAT and handling charges that more than doubled or tripled the price, while barber shops in Italy and Spain were forced to obtain cosmetic import licenses for up to 1,000 each.
Martin called on the government to do more to smooth the passage of exports to the EU.
Small businesses can send products worth less than 150 to the EU if the UK agrees with the EU to remove the need for a Fiscal Intermediary.
How leaving the EU affected the UK.
The analysis shows that exports to the EU are lower than they would have been without the non-tariff barriers. The variety of goods traded has fallen since the new rules came into effect.
The responses to the annual membership survey had become embittered as businesses realized that the barriers posed by the TCA were not temporary, but permanent.
He said that there was a heightened sense of anger that nothing was being done to relieve the costs.
To maintain reliable deliveries to clients, some businesses have shifted their distribution networks to Europe.
40% of the business's exports are to EU clients, according to MarkNewton, the company's Managing Director. It is now easier to sell to the US than it is to the EU.
Even though a full-time staff member was hired to help with the paperwork, there were still delays. I was hoping that I wouldn't be able to open in the EU. I thought we could get the processes down pat. He said that it added cost and subtracts from the margin.
It was recommended.
He said that the TCA is a growth blocker. The blue-chip clients have stuck with us, but with our EU competitors they are saying that they don't want to do business with the Brits.
The findings from the two years on should provide pause for thought by decision makers, as they have become more dissatisfied with the agreement.
The sudden introduction of non-tariff barriers has led many businesses to conclude it does not allow free trade.
The government said that the TCA had opened new opportunities for businesses in the UK and around the world.
A new export support service and an ambitious export strategy were launched by the UK.
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