Businesses in Scotland are experiencing “significant challenges” in exporting goods to the EU as a result of considerable non-tariff barriers which have arisen due to the post-Brexit UK-EU trading relationship, according to a new report by the Constitution, Europe, External Affairs and Culture Committee.
The Committee is calling for the new UK Government to negotiate improvements to the trading relationship to better facilitate UK-EU trade.
The findings are part of a report focused on how trade in goods between the UK and EU is working under the UK-EU Trade and Cooperation Agreement (TCA). The Committee also looked at the opportunities to improve the trading relationship.
The report highlights that non-tariff barriers have placed “considerable administrative, resource and cost pressures on businesses”, and “harmed exports”. Key amongst these barriers include the requirements for customs formalities and regulatory checks for all exports from the UK to the EU.
The Committee considers the challenges facing Scottish businesses to have been a consequence of leaving the EU as well as the type of Brexit which the TCA has delivered.
In order to address these trade barriers, the Committee identifies that there will be a need to seek closer regulatory alignment with the EU. It says that the reduction of trade barriers will therefore depend on the extent of alignment the new UK Government is prepared to commit to in negotiations with the EU.
A key recommendation of the report is that the UK Government seek a veterinary agreement with the EU to significantly reduce border checks and the administrative burden on exports of agri-foods. The Committee say this could significantly reduce barriers to trade for many Scottish businesses.
Further recommendations to reduce barriers to trade include a mutual recognition agreement with the EU on conformity assessments, and the linkage of the respective UK and EU emissions trading schemes. In each case, the Committee say that greater regulatory alignment with the EU will likely be necessary.
The Committee also believe that the UK and Scottish governments need to provide greater support to businesses in managing the complexity of the current trading environment. In particular, it highlights that support is needed for businesses to comply with changing EU regulations, and to navigate the customs and regulatory requirements of trading with the EU.
The Convener of the Constitution, Europe, External Affairs and Culture Committee, Clare Adamson MSP, said: “It’s clear to us that the UK-EU trading relationship under the terms of the TCA has presented significant challenges for Scottish businesses exporting to the EU post-Brexit.
“These barriers to trading with the EU have resulted from the decision to leave the EU, but also from the post-Brexit trade agreement with the EU.
“While the EU may noy be willing to substantially renegotiate the agreement, there are nevertheless significant opportunities to improve the trading relationship, including through our important recommendations such as the need for a veterinary agreement with the EU.”
The Convener added: “We heard overwhelming evidence that the non-tariff barriers resulting from the TCA have placed considerable administrative, resource and cost pressures on Scottish businesses, with many withdrawing from the EU market as a result.
“These challenges have been particularly acute for exporters of agri-food products, which are required to meet the EU’s Sanitary and Phytosanitary measures, as well as SMEs, who have been less able to absorb the additional costs and regulatory burdens.
“Therefore, it’s clear that there is a need for the UK Government to negotiate improvements to the trading relationship to better facilitate UK-EU trade, including through the formal review of the TCA in 2026.”
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