Brexit brings new challenges to international trade

Brexit has already caused a decrease in manufacturing in the UK. As the country gets prepared to establish a new trade deal with the EU, SMEs are feeling the pressure to adapt to the changing landscape of international trade.

The total value of UK trade in 2018 was valued at £1.3 trillion, and 49% of this trade was done with countries in the EU. With the UK exiting the European Union, there will inevitably be challenges to overcome regarding the changing landscape of international trade.

In the run-up to Brexit, the UK’s economy slumped due to a fall in manufacturing. Car production, in particular, showed a significant decrease, with the number of cars made in 2019 falling to its lowest since 2010. However, the sectors of aerospace, pharmaceutical, and plastics have also been detrimentally impacted. The agri-food industry is also predicted to be affected by Brexit. Two-thirds of its exported products are destined for European countries (equated to roughly £15 billion of food), and changes to regulatory standards could present a challenge to continuing this high volume of export.

The UK government now must decide between regulatory autonomy and following existing EU rules. The latter will facilitate international trade, while the first will see the UK in control of setting its regulations and standards, which will make trade harder as it will be less streamlined.

Currently, it is suspected that regulatory autonomy will be the path prioritized, which will inevitably present new barriers to international trade. There will be a need to establish new regulations surrounding the nature of trade between the UK and the EU, as it has already settled with other global countries. This will impact how British businesses manage commerce with the EU. This may require companies to comply with different rules, and new fees and tariffs may be involved. Specific industries will also likely have their own rules to adhere to, adding to the magnitude of changes that may take place. For SMEs in particular, this may act as a barrier to international trade due to a lack of knowledge of the evolving trade landscape.

Export Portal was established to facilitate international trade and make it easy for SMEs to operate in the global market. In addition to making international trade a safe and straightforward process, Export Portal is also dedicated to communicating the latest essential business updates to help equip SME owners with the knowledge they need to move forward and grow their businesses internationally.

New trade regulations needn’t prevent companies from trading; after all, they are there to facilitate them. With comprehensive knowledge of the changing procedures surrounding international trade, business owners can be confident maneuvering in this sector.