Czech-British trade in decline because of Brexit

Czech exports to Great Britain went down by nearly a tenth and imports were 13 percent lower in August, the reason being uncertainty about Brexit, statisticians' data have shown.

Czech exports to Great Britain have fallen by 4.5 percent since the beginning of the year, according to the data.

The fact that six months before Great Britain leaves the EU and entrepreneurs have no idea about what is going to happen after March 29, 2019 makes entrepreneurs act cautiously and revise their contracts, said Miroslav Diro, from the Chamber of Commerce.

The Confederation of Industry sees non-tariff barriers, such as state interventions, import charges and other trade obstacles, as the biggest threat. Firms with high value-added activities and bigger certification claims are more concerned about Brexit.

Hard Brexit would certainly have a negative effect on Czech companies and their trade with Great Britain, said Confederation of Industry spokeswoman Eva Velickova. If border controls were resumed after Brexit there would be delays at the borders and companies' costs would go up, she said.

According to a DHL export survey among 300 exporters, the share of exporters expecting Brexit to have an adverse effect on Czech exports has increased by 4 percentage points annually to 58 percent.

Of a total of 39 percent of Czech exporters to Great Britain, exports of 91 percent of companies do not exceed a fifth of the overall export volumes.

Now it is hard to predict the impacts of hard Brexit on Czech exports, said the Chamber of Commerce. Great Britain is a significant trading partner for the Czech Republic, which does not only apply to direct exports.

"Many companies supply components to Germany, for instance, where they are processed and Germany re-exports the goods to Great Britain," said Diro. Brexit may have a significant impact on the re-export and affect companies that are not preparing for it, he added.

Brexit will mainly influence specific exporters, according to the Chamber of Commerce. In the short run, it will not apparently affect Czech employment, GDP growth or inflation.

Source: CTK

Tereza Řezníčková
section Aktuálně