Brexit, an unprecedented “big bang” for French companies

Trucks wait to board the Eurotunnel freight shuttle in Coquelles, near Calais (Pas-de-Calais), on December 16.

Around 150,000 French companies, “For many SMEs”, carry out 34 billion euros of trade with the United Kingdom, according to the ministry for the economy. Whether or not there is a Brexit agreement, the 1er January 2021 will complicate their task, at least administratively. “Whatever the situation, things will change for businesses, as trade between the UK and the EU (EU) will no longer be done freely. The border will be restored and, with it, customs formalities for import and export, as well as health formalities ”, explains Bercy.

For French companies, this is a ” big Bang “, estimates Bernard Spitz, director of the international center of Medef. Almost one in four companies that trade with the UK has never traded outside the EU borders and is therefore not prepared to handle these customs formalities. Bercy half-heartedly recognizes that it will be necessary to support them in their efforts. The situation for companies today is different depending on their exposure to Brexit. Preparation was able to start early for a number of large groups ”, underline the experts of the ministry.

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On the administration side, no less than 600 customs officers were recruited this year to manage this extra work, and a hundred more should join in 2021 the various entry points for cross-Channel traffic on the continent. Indeed, if the United Kingdom is only the sixth customer of France and its seventh supplier (France, it is its fifth supplier), 80% of trade flows between the EU and London pass through France. .

On the economic front, the impact of Brexit for businesses promises to be smaller than the paperwork madness. Everything still depends on the outcome of the negotiations underway in Brussels, which could lead to the introduction of customs duties on certain products or goods and, consequently, to a possible contraction of trade. This loss of markets would be likely to reach, in the event of a “hard Brexit”, 3.6 billion euros for French firms, or just over 10% of current exports.

Several sectors affected

In the event of a trade agreement, these losses will be halved, reaching only 1.9 billion euros. France would be the third most affected European country, behind Germany and the Netherlands, and ahead of Belgium. The sectors most affected by a “hard Brexit” would be transport and equipment, with export losses over one year of around 759 million euros, chemicals (477 million euros), machinery and electrical equipment (426 million), the agri-food sector and tobacco (305 million). With a variant in the event of a “soft Brexit”: “The podium would remain the same, but the fourth position would be occupied by the precious metals and jewelry sector”, says the French credit insurance company Euler Hermes.

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