EU to UK vs. UK to EU Exports: Comparative Challenges Post-Brexit

The question of whether EU exporters to the UK are experiencing similar difficulties to those in UK to EU exports often surfaces as a topic of discussion, particularly in the context of business-to-business (B2B) transactions. Generally, the answer is no, and this is largely due to the specific circumstances surrounding the UK's departure from the European Union (Brexit) and the ensuing changes in customs border controls and VAT regulations.

Customs Border Controls and UK Preparedness

One of the primary reasons why EU to UK exports are not facing the same level of difficulties as UK to EU exports is the timing and readiness of the UK to implement necessary border controls. The UK was not fully prepared to operate the required border checks until July 2021. This period of uncertainty and adjustment meant that many EU companies had time to adapt their operations without the immediate need for extensive regulatory changes.

Moreover, the UK's exports to the EU account for only about 5% of the EU's total exports. EU suppliers, on the other hand, represent a much larger share of the UK's exports, accounting for 45% of UK exports. This asymmetry in trade volumes made it easier for EU countries to make adjustments, as only a small percentage of their total exports were impacted.

Adapting to New VAT Rules for Online Sales

While the EU successfully adapted to the new VAT rules for online sales, which made their lives more complicated, UK-based businesses have been caught off guard. The implementation of these new rules required significant changes, affecting not only EU countries but also suppliers from other parts of the world. However, for EU suppliers, the challenge is more manageable given their existing infrastructure and familiarity with the customs procedures and ferry services.

Impact of the Brexit Rhetoric on Truck Drivers

The anti-Pole/Bulgarian rhetoric during the Brexit campaign has had a lasting impact on the relationship between EU and UK customs authorities. Many EU-based truck drivers, heavily reliant on distance-based payments, have expressed distrust towards British customs and civil servants. This mistrust, stemming from past experiences, has led to a reluctance among some drivers to continue transporting goods to the UK. Some truckers have even increased their charges, with some charging up to ￡500 for an empty return journey to the EU, due to the additional documentation required.

Comparison of Export Difficulties

The challenges faced by UK-based exporters to the EU are, in many ways, less substantial than those experienced by EU exporters to the UK. According to data, exports to the EU only represent about 5% of EU trade, meaning that the overall disruption is relatively smaller for EU countries. Additionally, the EU took proactive steps to prepare and expand their existing systems to handle increased customs and compliance requirements. For instance, they set up new ferry services to Ireland to bypass the UK, thereby reducing the burden on the UK's customs infrastructure.

The Irish ports and communities have also benefited from these changes, as the rerouting of goods through Ireland is aiding in the smooth operation of supply chains. As a result, the UK has taken a light touch approach to imports, recognizing that their preparations were insufficient and focused on getting the basics in place within six months.

Conclusion

In summary, while both UK and EU exporters have encountered challenges post-Brexit, the difficulties are not of the same magnitude. EU to UK exports are experiencing fewer issues due to the countries' ability to adapt and the lesser impact on their trade volumes. The UK's ongoing preparations and the light touch on imports are expected to mitigate the immediate challenges. However, for efficient supply chains, it's crucial for all parties to continue to adapt to the evolving customs and VAT regulations.