Foreign trade: the effects of Brexit are already visible

If the United Kingdom leaves the EU without an agreement, its companies will no longer be able to benefit from the trade agreements it has signed with third countries. This is a major risk for many companies, which are thus reluctant to send their goods to certain distant destinations.

The business world feared it, and British Prime Minister Theresa May confirmed it on Tuesday, February 12: she will not propose a new agreement for Britain’s exit from the EU to the vote of MPs before her next meeting with European leaders, scheduled for “the end of the month”.

This means that a deal will be adopted at best four weeks before March 29, the official date of Brexit. At worst, according to recent rumours coming from the House of Commons in Westminster, after the European Council of March 21…
A very close D-day

This information has made many British companies jump. “For them, D-Day is actually much closer: mid-February if they are sending shipments to the Far East,” explained Greg Clark, the minister for business, energy and industrial strategy, before a parliamentary committee.

The minister, who has already warned that he will resign if his government decides to let the U.K. slide into a “hard Brexit,” elaborated on his reasoning, “If you send goods for Japan or South Korea, they will get there in six weeks. Both countries have a free trade agreement with the EU, which will immediately lapse in the event of a hard Brexit. “

He continued, “So you don’t know if the goods you sent over the oceans will be allowed in when they arrive. And, if so, what customs duties will have to be paid. “Before concluding, “People say that things are always decided at the 59th minute of the 11th hour, but it’s important to understand that that deadline is not March 29…”
Between 35 days to 40 days to North China

According to the Shippo Shipping Group, it takes between 10 and 14 days for a container ship from the U.K. to reach the east coast of North America, 30 days for the west coast, between 35 days to 40 days for northern China. “In the case of an exit without an agreement, this means in practice that ships could arrive in ports and still find the market they were aiming for closed,” says Ben Digby, director of international trade at the Confederation of British Industry (CBI), the equivalent of Medef.

About the author

Leave a Comment