It is approaching three years since the UK and the EU finally sealed the deal that would, supposedly, protect free trade across the Channel.
The so called Trade and Cooperation Agreement hammered out by Boris Johnson and Ursula von der Leyen on Christmas Eve 2020 was a lot better than the “hard Brexit” alternative, but self evidently desperately poor compared with what had gone before. A survey today from Bibby Financial Services reveals that 58% of SMEs — the bedrock of the British economy — that trade internationally are struggling with tariffs, customs and other barriers. It is the single most frequently cited challenge, ahead of the cost of doing business oversas and currency fluctuations.
The survey does not break down which countries the respondents export to, but given the EU still accounts for almost half the total, it is fair to assume a good chunk is heading to our nearest neighbours.
In the long run, economics invariably trumps politics and for a country desperately seeking the elusive elixir of growth, a return to the Single Market and the Customs Union is an obvious easy win. Nothing will happen this side of an election, but after that all bets are surely off.
As time goes by, reality is knocking the rougher edges off Brexit. The French and the Spanish want British expats and long-term holiday makers to return because they spend money and invest in parts of those countries that are otherwise economically challenged. So they are prepared to scrap the post-Brexit Schengen rules that limit visits to 90 days in 180.
A return to the Single Market is a much bigger play. The sticking point will be Brussels’ inevitable insistence on full freedom of movement, a red line unlikely to prove politically acceptable given the febrile political mood on immigration. Can that circle ever be squared? It looks a long shot but the political tectonic plates are moving.
On a low-growth Continent there is so much to be won for all parties from a return.
