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EU trade difficulties unchanged, business leaders say

Businesses are finding the trading relationship with the EU as difficult as they did 12 months ago, according to the Institute of Directors (IoD), with SMEs facing challenges ‘across the board’.

Following EU Exit and the trade challenges posed by COVID-19, the Growth Hub’s specialist Manufacturing Service re-focused much of its support over the last three years to helping businesses with supply chain management.

But businesses are finding the trading relationship with the EU as difficult as they did 12 months ago, according to the Institute of Directors (IoD), with SMEs facing challenges ‘across the board’.

In response to an IoD survey in July 2022, 47 per cent of its members indicated they were finding EU trade challenging. A year on, this figure has remained constant, with 46 per cent of members still agreeing with the statement, according to a follow-up survey.

While complaints from large businesses now centre around access to skills and travel, the challenges for SMEs are more evenly spread across the board. Over half (55 per cent) of SMEs still cite customs changes as a key difficulty, while 45 per cent are still struggling with non-tariff related barriers to goods trade.

Separate research last year found that half of importers lacked confidence dealing with EU customs requirements.

Emma Rowland, Trade Policy Advisor at the IoD, commented:

“The consensus from many businesses, particularly large ones, is that they are starting to get used to some of the regulatory barriers to trade, such as customs controls and labelling. However, our latest data shows there are still issues that need to be addressed. The fact is trade between the [EU and UK] is no longer completely seamless.”

In 2020, our Manufacturing Team highlighted the importance of developing a supply chain strategy by segmenting elements of the supply chain by their influence on profitability and risk:

  • Low risk, low value add items: Cut costs on non-critical products by reducing administrative burden or streamlining procurement
  • Low risk, high value add items: Maximise profitability through tendering and regularly reviewing pricing and supplier relationships
  • High risk, low value add items: Consider holding more stock, looking for alternative suppliers, and substituting or switching to activities which add higher value
  • High risk, high value add items: Look at building stronger, longer-term and more innovative partnerships with suppliers, or explore the potential to make in-house or buy local.
Look back at our advice for EU importing

GC Business Growth Hub was part financed by the European Regional Development Fund (ERDF) 2014-2021, as part of a portfolio of ERDF-funded programmes designed to help ambitious SME businesses achieve growth and increase employment in Greater Manchester. Eligibility criteria was applied. The 2014-2021 ERDF  fund was allocated by the European Union that finances convergence, regional competitiveness and employment and territorial co-operation.

Department for Levelling Up, Housing and Communities (DLUHC), formerly the Department for Communities and Local Government was the managing authority for the European Regional Development Fund Programme, which was one of the funds established by the European Commission to help local areas stimulate their economic development by investing in projects which will support local businesses and create jobs. For more information, visit European Regional Development Fund: Documents and Guidance - GOV.UK (www.gov.uk)

If you would like to know more please contact us at bgh@growthco.uk

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