The European Union has released its Winter 2021 Economic Forecast (WEF), which forecasts that the post-Brexit economic growth of the United Kingdom is probably going to be decreased, regardless of the new free trade deal between the two parties. Despite the free trade deal (FTA) between the UK and the EU, goods moving between the UK and any EU country are now treated as cross-border transactions, requiring the filing of import and export declarations, effective as of 1 January 2021.
The WEF estimates that for the EU, on average, the exit of the UK from the European Union under the FTA will generate a loss of GDP of 0.5% by 2022. The UK, meanwhile, would experience a 2.25% drop in GDP over the same period. The FTA also mentions that Member States with a larger share of goods trade with the UK benefit relatively more from the FTA than those with a higher share of trade in services.
Although much attention has been paid to the new tax and tariff rules which will affect the cost and availability of goods and services, the most significant challenge, also the most expensive part, of Brexit is, that cross-border companies will also need to invest in the personnel and global trade management technology necessary to remain in compliance with border checks, customs rules, and adhere to each country’s individual product standards and regulations.