Small EU businesses voice ‘major concerns’ over lack of progress in ongoing Brexit talks

The comments come with formal talks between the EU and UK set to resume in Brussels on 17 August.
European Parliament Audiovisual

By Martin Banks

Martin Banks is a senior reporter at the Parliament Magazine

03 Aug 2020

SMEunited, the body representing small European businesses at EU level, has written to Brexit chief negotiators Michel Barnier and David Frost, urging them to strive for a “robust trade agreement.”

The letter, seen by this website, says such a deal should “support the integrity of the single market while maintaining close business relations between the EU and the UK.”

The letter is accompanied by SMEunited’s “set of principles” for any future trade agreement.

The letter states, “Currently, the lack of legal certainty and predictability for the immediate and medium-term future, as well as the lack of progress against the clock are major causes for concern.”

It goes on, “An agreement on a level playing field that complies with European social and environmental standards will allow EU and UK SMEs to continue their activities uninterrupted, prosper and grow”, said SMEunited president Alban Maggiar.

The Brussels-based organisation, in its letter, emphasises the importance of “common principles for regulatory approaches, as part of a standards strategy, to ensure reciprocity in technical standards.”

“Currently, the lack of legal certainty and predictability for the immediate and medium-term future, as well as the lack of progress against the clock are major causes for concern” SMEunited

“Full road connectivity between the UK and the EU must be guaranteed, to allow SMEs from both sides to operate without any delays or barriers. Administrative burdens, additional legislation and tariffs or costly and time-consuming customs procedures need to be avoided so far as possible.”

SMEunited adds that “clear rules” on the provision of cross-border services are required, in order for companies providing services or having suppliers in both markets to be able to plan ahead.

Any new agreement by the EU and UK should include a “standalone SME chapter” ensuring “transparent and easily accessible” information especially on tariffs and the rules of origin.

“An SME contact point or information portal should support small and medium-sized businesses to overcome the challenges and grasp opportunities of the FTA to the fullest.”

The letter says the demands are required by SMEs “on both sides of the channel.”

Elsewhere, Charles Grant, director of the UK-based Centre for European Reform, says the biggest impact of no deal would be “political.”

“Although a thin FTA would harm the UK economically, it could be an interim measure. In the long run, when emotions over Brexit have subsided … rational actors on both sides may see the benefit of closer economic, political and security cooperation” Charles Grant, Centre for European Reform

Grant said, “An acrimonious end to the transition would hit economic confidence and make it very hard for the UK and the EU to build close cooperation on trade or security for years to come.”

The UK will remain in its transition period until 31 December but the two sides want to reach a deal by October to allow the European Parliament a chance to sanction it.

Grant adds, “Although a thin FTA would harm the UK economically, it could be an interim measure. In the long run, when emotions over Brexit have subsided – when leavers no longer suspect remainers of trying to block it, and EU governments have stopped fearing that a slash-and-burn UK economy will outperform them – rational actors on both sides may see the benefit of closer economic, political and security cooperation.”

Meanwhile, a pro-Brexit group has warned that regardless of whether there is a deal or not the UK “will still be caught up in a regulatory struggle with Brussels.”

Jayne Adye, director of Get Britain Out, said, “Michael Gove [UK Chancellor of the Duchy of Lancaster] has the means and opportunity to change the Withdrawal Agreement and roll back the strings still attached to the UK post-transition period, without the need for Parliamentary approval.”

She added, “Almost every week we discover more about the dangers and flaws hidden within the Withdrawal Agreement.”

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