Businesses hit by falls in EU trade due to new post-Brexit red tape should “take a ten-year view”, Dominic Raab has said.
Speaking to the BBC on Sunday, the foreign secretary was challenged over fears that new regulations, coming into force since the UK broke with EU rules December, is hitting manufacturers and exporters hard.
When the deal was struck in December, Boris Johnson said that “if anything allow our companies and exporters to do even more business with our European friends”.
But companies are being clobbered with higher costs due to extra border checks and paperwork, referred to as “non-tariff barriers” to trade.
A survey of 470 exporters to the EU by the British Chamber of Commerce found that almost half (49%) had experienced difficulties with new border rules.
A report in the Guardian earlier this month also revealed that, according to the Road Hauliers’ Association, the volume of exports going through British ports to the EU fell by 68% in January, compared with January 2020.
There is growing concern the worst is yet to come for firms because, as agreed in the December deal, additional UK import controls will be introduced in April and July as part of a staged approach to new rules.
But Raab sought to blame Brussels for the fallout and urged critics to take a “ten-year view” of Britain’s trading position.
Pressed on BBC One’s Andrew Marr Show about the potential dip in trade, he said: ″First of all, of course you are right to say that the EU regulatory requirements and the red tape, the paperwork that they will apply to the UK will be the same that apply to other businesses around the world.
“If they ramp that up and don’t take a sensible, smart approach to that then of course it will have an impact. It will also have an impact on them.
“I think if you take a ten-year view as well as looking at the short term risk, which is right to do, actually the growth opportunities of the future are going to come from emerging and developing economies around the world, in particular the Indo-Pacific.”
He trumpeted Britain “having the freedom and the latitude to create bespoke Britain-friendly terms in relation to FTAs (free trade agreements)” post-Brexit.
Almost all analyses have said that trade deals with other countries around the world will be unable to replace the boost the EU single market offered Britain.
An analysis by the European Commission earlier this month concluded the Brexit trade deal will wipe £45bn from the UK economy over two years.
It estimated that while UK output would fall by about 2.25% per cent by the end of 2022, the EU’s would also take a hit - but by a much smaller 0.5%.
Raab added: “You’ve got to look at this in the round, but of course we also want to manage those short-term challenges and reduce and mitigate as far as we can the bureaucratic obstacles that the EU is imposing.”
The prime minister and government have repeatedly denied the December deal will damage trade. But ministers have announced small firms hit by regulations can apply for a share of a £20m Brexit support fund.
It comes as London lost its long-held title of Europe’s largest share trading centre, after Amsterdam hoovered up business lost by the UK.
Exchanges in the Dutch capital traded £8.07bn a day in January, more than London’s £7.54bn, according to figures from Cboe Europe exchange, which operates in both cities.