Trading with the United Kingdom has become more difficult for Europeam export companies. This is evident from the first hundred days after Brexit. COVID-related restrictions overlap the whole picture too.

Flemish companies have to incur on average 4.8 percent more costs to continue trading with the UK after Brexit. This is what a survey conducted by the Voka business organisation reveals to its members.

The United Kingdom left the European Single Market on New Year’s Eve, with a last-minute trade agreement under its arm. On Christmas Eve last year, Brussels and London agreed to limit the greatest chaos: there are no customs tariffs on the mutual trade of goods and no import quotas that set a ceiling on trade volumes. But the United Kingdom has become fully ‘foreign’. This means that customs controls have been in place since 1 January. And it means that the UK has a different regulation than the EU countries.

All these novelties make trade more expensive than last year. A third of European companies see costs increase due to additional customs formalities, according to the Voka survey. One in five suffers from additional regulation. And one in seven pays extra costs for parts coming from outside the EU.

The latter was the big Brexit surprise for many export companies in January. If a Flemish machine manufacturer imports parts from China and thereby makes a machine that he has shipped to a British customer, there is a chance that British customs will still tax the machine, because the product is not sufficiently European. Those rules were known, but at the beginning of this year they got a little snowed under in the relief about the trade agreement that was concluded on Christmas Eve.

These additional obstacles are palpable. Belgian goods exports to the United Kingdom fell by 35 percent in January, according to data from the National Bank. In the opposite direction, imports of British goods to Belgium fell by 54%.