Brexit-related red tape has caused a sharp decline in goods trade between the UK and EU, and the situation is worsening, according to a report by Aston University Business School. The study found that UK goods exported to the EU were down 27%, and imports fell 32% between 2021 and 2023 compared to pre-Brexit estimates.

Smaller British producers have particularly struggled, with many ceasing exports to the EU due to increasing regulations. Exporting costs have surged, with pallet deliveries to the EU now costing £230-£250, compared to around £130 before Brexit. Administrative fees and other Brexit-related complications largely drive this increase. Agrifood (food produced by agriculture), textiles and materials manufacturing, including wood and paper, have been most affected.

The variety of British goods exported to the EU has also dropped, with 1,645 fewer products being sent to every EU nation. Trade with distant EU countries, including Commonwealth members such as Cyprus and Malta, has been hardest hit.

However, certain sectors, including tobacco, railways and aircraft, have shown resilience, particularly in larger EU economies like Germany and France.

While bulk deliveries have recovered, significant progress is not expected until the new European Commission is in place and the UK finalises its industrial and trade strategies next year.

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