EXCLUSIVE Britain is no longer in the top ten for trade with Germany as Brexit bites

BERLIN, Sept. 8 (Reuters) – Britain loses its status as one of Germany’s top ten trading partners this year for the first time since 1950, as Brexit-related trade barriers make companies in the economy Europe’s largest looking for business elsewhere.

The UK left the European Union’s single market in late 2020, after more than four years of disputes over the terms of its divorce, during which corporate Germany had already begun to maintain ties with Britain. .

In the first six months of this year, German imports from Britain fell by almost 11% year-on-year, to 16.1 billion euros ($ 19 billion), according to data from the Federal Bureau of Investigation. ‘Statistics reviewed by Reuters.

Although German exports to Britain increased by 2.6% to 32.1 billion euros, this could not prevent a decline in bilateral trade, 2.3% to 48.2 billion euros, which which caused Britain to drop to 11th place from ninth and fifth place before voting to leave the EU. in 2016.

A December 2020 survey in the German trade association BGA showed that one in five companies was reorganizing supply chains to switch British suppliers to EU ones.

This trend was increasingly marked, although British companies were even worse off, said Michael Schmidt, president of the British Chamber of Commerce in Germany, and made no change unlikely before the end of this year.

“There are more and more small and medium-sized businesses that stop trading (in Britain) because of these (Brexit-related) obstacles,” Schmidt told Reuters.

The sharp decline in the first half was also motivated by the effects of setbacks before new obstacles, such as customs controls, occurred in January.

“A lot of companies anticipated the problems … so they decided to go ahead with imports by increasing stocks,” he said.

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Although this effect boosted bilateral trade in the fourth quarter, it reduced demand earlier this year, while problems with new customs controls also complicated trade from January.

A breakdown of the data showed that German imports of British agricultural products fell by more than 80% in the first six months, while imports of pharmaceutical products fell by almost half.

“Many small businesses simply cannot afford the additional burden of keeping up to date and complying with all applicable customs regulations, such as health certificates for cheese and other fresh produce,” Schmidt said.

But new trade realities had hurt British companies even more than German ones, which were more accustomed to dealing with different customs regimes around the world, as many had been exporting to various non-European countries for decades.

“In Britain, the situation is different,” Schmidt said, adding that many small businesses there had mainly exported to the EU, so they had to start from scratch when faced with new customs controls.

“For many small British businesses, Brexit meant losing access to their most important export market … It’s like shooting yourself in the foot. And that explains why German imports from Britain are in free fall now “.

He expressed hope that part of the decline could be temporary. “Normally, companies are always in a good position to adapt quickly, but that takes time.”

($ 1 = $ 0.8455)

Report by Michael Nienaber, edited by John Stonestreet

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