Small businesses are finding trading with the EU increasingly difficult, according to the latest survey from the Institute of Directors.
Although nearly half of all businesses find EU trade either quite or very challenging, small businesses say that day-to-day trading with the EU is getting harder, whether they deal with services or goods.
Goods in particular are getting harder to trade, with 45 per cent of SMEs saying it’s challenging compared with 36 per cent one year ago, and a similar rise for SMEs selling services (43 per cent vs 34 per cent).
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However, difficulties with immigration, business mobility and travel, continue to be the top reason why firms are finding EU trade difficult. Nearly three quarters of IoD members cite these changes as negatively impacting their business. For SMEs, the biggest bugbear is the increased paperwork from customs changes.
Emma Rowland, trade policy advisor at the Institute of Directors, said that although larger businesses are starting to get used to some of the regulatory barriers to trade, such as customs controls and labelling, the restrictions to business mobility, especially being unable to tap into the EU jobs market with 500 million potential candidates is chafing.
Last December, nearly 80 per cent of firms which trade with the EU said the current Brexit deal is not helping them increase sales or grow their business, with more than half of firms (56 per cent) facing difficulties adapting to the new rules for trading goods with the EU and 45 per cent for trading services. Over 90 per cent of firms surveyed by the British Chambers of Commerce were small and medium-sized businesses.
The Trade and Cooperation Agreement (TCA), signed between the UK and the EU in January 2021, comes up for renewal in 2026.
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