Brexit: Uncertainty Continues in the United Kingdom

Brexit: Uncertainty Continues in the United Kingdom

Brexit has become a constant source of uncertainty in the United Kingdom. Although three years have now passed since the signing of the Trade and Cooperation Agreement (TCA) between London and Brussels, the effects of the UK’s exit from the European Union are still being felt.

From inflation to the economy to the debate on irregular immigration, Brexit has left a significant mark on the country.

Challenges for Spanish companies

Spanish companies trading with the UK face a constant exercise in prevention and damage reduction. While some companies have managed to adapt, many are forced to deal with bureaucracy and constant changes in regulations.

An example of this is Spanish Ham Master, a company dedicated to the import and sale of acorn-fed Iberian ham. Despite its success, José Sol, owner of the company, has had to hire a manager to deal with the new documentation required as of 2024.

This situation is common for many Spanish companies trading with the UK.

Sanitary and phytosanitary controls

From January 31 next year, sanitary and phytosanitary controls on agricultural and livestock products traveling between the UK and the EU will come into force. These controls have been delayed several times due to fears that they will cause chaos for importers and further increase commodity prices.

Health certificates for medium-risk animal and plant products from the EU will be introduced from that date. However, physical and identity checks, together with the application for the mandatory documents, will not be carried out until April 30 next year.

Finally, on October 31, 2025, all security declarations imposed by the Brexit Trade Agreement will be reclaimed.

Onerous changes

In addition to sanitary and phytosanitary controls, British companies face other changes that entail higher costs. For example, the European Union has begun to implement the Border Carbon Adjustment Mechanism, which requires British exporting companies to report on the greenhouse gas emissions embodied in the production of their products.

From January 2026, new taxes will also be implemented. These changes, coupled with the lack of knowledge about the new EU VAT rules, represent an additional challenge for Spanish and British companies.

The impact of Brexit on trade

A survey conducted by the British Chambers of Commerce reveals that 60% of the companies consulted consider trade with the European Union to be more complicated compared to the previous year. In addition, half of the companies do not agree with the idea that the UK’s exit from the EU would help increase sales.

According to the report by economist Jun Du for Aston Business School cited in the British Chambers of Commerce study, the UK has experienced a significant contraction in its trade capacity since the Brexit trade deal came into effect, with an estimated loss of 20% to 42% of exported varieties in the first fifteen months.

Future prospects

The trade agreement signed between the United Kingdom and the European Union provides for a review of its clauses from 2025. The leader of the Labour opposition, Keir Starmer, has promised a renegotiation with the EU if he becomes a government.

However, the EU institutions have made it clear that they are not keen to reopen the treaty. While the European continent has already turned the page on Brexit, uncertainty persists in the UK.

Conclusions

Brexit continues to be a source of uncertainty in the UK. Spanish companies trading with the country face constant challenges and onerous changes. Sanitary and phytosanitary controls, as well as new taxes and regulations, represent an obstacle to trade between the United Kingdom and the European Union.

Despite this, companies must adapt and find ways to minimize the impact of these changes. The future of Brexit remains uncertain, but companies must remain flexible and look for solutions to maintain a strong trading relationship between the two blocs.