Potential Easing of Trade Restrictions for Businesses Engaging with the EU

Businesses involved in trade with Europe may experience a lifting of certain restrictions as early as next year, according to statements made by the exports minister.

The forthcoming review of the Trade and Co-operation Agreement (TCA) between the UK and the EU has sparked conversations about a potential “reset” in relations, as Gareth Thomas, the minister for services, small businesses, and exports, indicated that officials are already working on establishing a more favorable environment.

Thomas expressed optimism regarding this reset, stating, “I truly believe that a reset is achievable. It would benefit both Europe and Britain to explore how we can eliminate existing barriers together.”

He emphasized that current indications suggest a willingness from the EU for such a reset, and the UK government aims to capitalize on this opportunity.

Efforts are focused on resolving trade friction resulting from the conditions of Britain’s exit from the EU. The government is considering streamlining border checks, particularly sanitary and phytosanitary (SPS) checks on agricultural products, and fostering greater mutual recognition of professional qualifications to assist the service sector in the EU.

“By pursuing an SPS agreement, mutual recognition, and a TCA review, we have a chance to gradually reduce border friction and facilitate business operations,” Thomas added.

Acknowledging the significant damage caused to UK-EU relations over the past five years, Thomas noted that extensive efforts are underway to mend these relationships.

In the wake of recent budgetary changes, the government has faced criticism from the business community, particularly regarding increased taxes and upcoming employment legislation.

When asked whether the heightened operational costs in the UK might hinder exporters, Thomas responded, “This situation actually provides an additional incentive to focus on exporting. Pursuing new export opportunities is vital now more than ever.”

Amidst discussions surrounding potential increases in tariffs under the incoming US administration, Thomas reassured that any such developments should not discourage UK exporters. He stated, “Global challenges are persistent, but evidence consistently shows that securing export contracts enhances business stability. The advantages of exporting remain significant.”

Currently, approximately 10% of UK businesses are engaged in exporting, with initiatives launched by the previous government aimed at increasing this figure. Goals included doubling the number of small and medium-sized enterprise exporters, currently at 300,000, and achieving a target of £1 trillion in annual exports by 2030.

Thomas mentioned that the government plans to outline its export objectives in a forthcoming trade white paper anticipated in the spring. In the meantime, officials have revived an export support directory and conducted a series of seminars and workshops throughout the UK as part of International Trade Week.

He conveyed two primary messages to businesses, urging them to reconsider opportunities in Europe. He recognized that many companies have been deterred due to escalating costs and bureaucratic challenges, remarking, “Given that Europe is our closest and largest overseas market, not pursuing these opportunities feels like a significant oversight.”

Furthermore, he is examining how government support for exporters can be enhanced, particularly regarding the engagement of UK embassies and consulates with businesses in international markets, which he described as a “mixed picture” at present.

Thomas is also open to exploring grant support for small exporters looking to participate in trade shows, acknowledging the positive impact such assistance can provide, although he indicated resource constraints within his department. “I have been struck by how crucial this support has been for businesses stepping into exporting,” he noted.

He concluded by stating, “We have been focusing extensively on fostering domestic growth, and we are now turning our attention to strategies that assist businesses in seizing opportunities and expanding through exports,” which will encompass new free trade agreements with regions including the Gulf states, India, and Switzerland, alongside targeted aid for priority markets.

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