The Growing Pains of Brexit, 50 Days In | Wolf Street

The UK’s fishing industry is one of the hardest hit sectors, despite the disproportionate attention the sector, which represents just 0.5% of the economy, received in the final stages of negotiations. Prior to Brexit, about 80% of fish caught in the U.K. was exported to the EU. But on January 1 the industry started to unravel. In no time fishing ports from Scotland to Cornwall were up in arms about border delays and unanticipated changes in regulations, causing fish to be left rotting by the roadside or deliveries to be aborted.

The arts and entertainment industry, which is worth an estimated £111 billion to the U.K. economy each year, is hurting. According to the Creative Industries Council, it employs over 2 million people. Already hammered at home by Covid-induced lockdowns and social distancing rules, which led to the closure of cinemas, theaters, art galleries, and museums, and to the cancellation of live events, tours, and festivals, the industry woke up on January 1 to discover that the Brexit deal has made it almost impossible for British bands, artists, or musicians to resume touring in Europe, even once Covid has died down.

Manufacturers are also running up against major obstacles, as they discover that the UK government’s claim that the trade deal with the EU guaranteed zero-tariff, zero-quota trade between the two partners is not entirely true. Those protections only apply to goods traded between the EU and UK that originate from whichever side exported them. The rules of origin included in the trade deal aim to ensure that goods imported from, say, India into the UK can’t be sold on to the EU tariff-free. Complying with these rules is notoriously hard – especially for processed agricultural or industrial goods, which typically include ingredients or components from around the world.

It’s still too early to know with any real precision just how badly this is impacting UK exports to the mainland. But the initial signs are not encouraging. In early February, the Road Haulage Association (RHA) said loads on lorries going through British ports to the EU had fallen by as much as 68% in January 2021 compared to January 2020. More than half of the companies reporting a drop in exports blamed the deterioration on Britain’s departure from the EU, according to IHS Markit.

The Growing Pains of Brexit, 50 Days In | Wolf Street