Brexit  

Changes to the Brexit trade deal are now inevitable

Alex Altmann

Alex Altmann

A quick fix should see these customs checks being carried out at the ports of Liverpool or Cairnryan for the time being. But this issue just demonstrates one of the many unworkable provisions of the new trade arrangement with the EU that needs urgent review.

The biggest part of the UK economy, the services sector which covers over 80 per cent of our economic output, has unfortunately fallen victim to the tough negotiating timetable as well.

The tariff-free trade deal with the EU only covers goods, not services. The UK services sector now finds itself in a place where it was before the treaty of Maastricht was signed in 1992, which is outside the EU single market.

Regulated service providers, such as the financial services, medical providers, architects, or engineers, are hit the hardest.

Access to the largest single market area in the world will only be granted if the service provider is established in at least one EU member state to allow local authorities to oversee professional standards and insurance requirements.

Many financial service providers saw this coming in their worst-case scenario planning and started setting up branch offices straight after the Brexit referendum and relocated thousands of their staff from the City of London to Frankfurt, Paris and Dublin.

However, most British businesses do not have either the funding or the expertise to restructure their business in such a way to maintain EU market access, with damaging effects to the UK economy.

Trade always finds its easiest way. The Brexit trade deal has imposed barriers, unworkable measures, and high compliance costs for businesses, which is turning trade away from the UK.

The reputational damage to Britain as a centre for global business is irreversible. But if the UK government begins to listen to the business community and trade experts, it can work on important changes to the Brexit trade deal to improve an unacceptable status-quo of UK/EU trade.

 Alex Altmann is a partner at Blick Rothenberg in London and Chairman of the British Chamber of Commerce in Germany