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Navigating the new rules post Brexit

Passendo signs new strategic partnerships as it continues growth trajectory, entering the Italian and German markets 36

By Astrid Geeraerts, Head of Investment at Flanders Investment & Trade 

The EU has historically been the UK’s largest trading partner, so it’s been critical for many UK businesses that they can continue to seamlessly export to EU countries following the introduction of the UK-EU Trade Cooperation Agreement.

It was no surprise, especially when combined with the impact of the global pandemic, that UK exports to EU countries declined in the first year of post-Brexit customs regulations. The raft of post-Brexit customs regulations and bureaucracy that businesses need to navigate to enter the bloc has created a complicated system for UK exporters.

However, while Brexit initially impacted UK exports to the EU, the full-year trade figures for Flanders in 2021 showed that UK exports to Flanders are displaying strong signs of recovery after their initial post-Brexit decline. At a time when the economic outlook is currently looking more uncertain as a result of the crisis in Ukraine and the ongoing impact of the pandemic, this is one good sign for businesses on both sides of the Channel that trade is looking healthier again.

UK exports to Flanders initially slumped by 15.8% in 2020 following the UK’s departure from the EU. Thanks to the entrepreneurial attitude of UK businesses, exports to Flanders and other EU countries are now looking up again. The latest figures from Flanders Investment & Trade show a significant increase in UK exports to Flanders of 18% in 2021 on the previous year (2020).

This month (9-12 May) saw HRH Princess Astrid and a ministerial delegation lead the Belgian Economic Mission to the United Kingdom as part of its continued commitment to trade relations between the two countries. With more than 400 participants, 214 companies and organisations and four days of activities, the mission was one of the largest ever organised by Belgium anywhere in the world.

Following the formal departure of the UK from the EU, many UK exporters have looked for a single access point for the EU. A key consideration for UK businesses is identifying a region in the EU that can offer them strong onward trading opportunities to help them navigate post-Brexit trade.

With a myriad of post-Brexit customs regulations to understand and comply with in each EU country, many UK businesses have looked for an easy, single-entry point to export to the UK. For exporters in the UK, Flanders has offered a financially attractive single gateway route to exporting to counties across the EU too. Thanks to the region’s affordable real estate prices, absence of business rates, fast setup, excellent transport connections and its variety of grants and subsidies, its well-placed to provide a base for UK businesses looking to export onwards to other EU countries.

As well as seeing imports to Flanders from the UK bounce back in 2021, Flanders also outperformed the EU average for global exports (+18.93%) last year, exporting €380.5 billion worth of goods globally. This showcases Flanders as a powerhouse for both EU and international trade.

Flanders saw record levels of investment from UK companies in 2021, as British businesses sought to set up a base in the region as a single-entry point to the EU customs union. This was a 63.33% increase on the previous year. Flanders Investment & Trade, the official government body for the Flanders region, has been supporting UK businesses through the challenges that Brexit has presented to exporters to the EU over the past two years.

For UK businesses who need advice as they navigate post-Brexit trading and customs regulations, FIT has provided webinars and online resources, as well as access to experts who can answer legal queries and make introductions to organisations such as banks and potential business partners.

Despite the uplift in trade and exports to Flanders, uncertainty and questions post-Brexit customs formalities and UK export and import formalities are still the top three topics of enquiries we continue to receive from UK businesses in 2022. Two years on from the UK’s exit from the EU, there is still widespread confusion about post-Brexit customs regulations that are continuing to cause a headache for exporters and importers alike.

This April, the UK government announced a delay to post-Brexit checks on EU food imports which were set to be introduced on July 1st. At Flanders Investment & Trade, we’ve welcomed this delay. A flexible approach is needed to ensure businesses in the UK and the EU can continue to trade in the current economic conditions and outlook without further customs confusion to navigate.

However, UK exporters should make sure they’re prepared for when these new measures do come into effect. Now scheduled to be introduced at the end of 2023, businesses who will be affected should make sure they have the support they need to manage these new regulations in plenty of time.

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