The UK government has been urged to continue talks with the EU to ensure companies in the country can benefit from a level playing field with their European counterparts.
In the week that the European Parliament formally ratified the Trade and Cooperation Agreement (TCA) that has been acting provisionally since the end of the transition period in January, lawmakers in the UK have warned that further discussions will be needed in order to reduce non-tariff barriers to trade and prevent businesses from being forced to move their activities from the UK to the EU.
Meanwhile, a trade group in the aerospace sector has also warned of the negative effect of how Brexit will impact its members' activities, which could also push many companies to relocate their activities.
MPs highlight new barriers to trade
The UK government welcomed the vote in Brussels to approve the TCA, with prime minister Boris Johnson describing it as the "final step" in the long Brexit journey. However, other groups in Westminster have warned there is still a lot of work to be done to improve the existing deal and provide businesses with the support they need to continue trading with the EU.
For instance, a new report from the House of Commons' Environment, Food and Rural Affairs Committee raised concerns over some of the difficulties facing British exporters of products such as meat and seafood - especially those working with highly time-sensitive goods such as live products.
It noted that despite the fact many of the initial teething problems related to Brexit have been overcome, smaller exporters are still being particularly hard-hit by new trading rules, which could render many businesses unviable and see factories and jobs forced to relocate to the EU.
The committee therefore urged the government to take a "pragmatic" approach to help reduce non-tariff barriers such as red tape and additional checks in order to create a level playing field for UK goods.
Among its recommendations were for the UK to prioritize the digitization of crucial documentation such as Export Health Certificates and establish a fund for the creation of new distribution hubs. This would allow smaller exporters to group consignments into single lorry loads in order to reduce transportation costs and delays.
Chair of the committee Neil Parish said: "As it stands, the playing field is not even, and the government must ensure that the new timetable to introduce import checks is adhered to.
"It must be pragmatic in seeking an agreement with the EU to reduce the red tape that harms both sides, and in the meantime, crack on with giving practical support to small British businesses to sell their produce abroad."
Aerospace industry raises concerns
Meanwhile, new concerns have been raised by the UK's aerospace sector about the impact the Brexit deal is having on operations. Trade group ADS stated UK firms could lose business to the EU because the current Brexit deal does not address issues related to the design approval process for aircraft components.
The organization explained that months after the deal was agreed, UK companies are still struggling to get EU approval for British-designed parts. Responsibility for certifying these components shifted from the European Union Aviation Safety Agency (EASA) to the UK's Civil Aviation Authority (CAA) as part of the Brexit process, but the EASA has yet to grant the CAA full recognition, which has resulted in more red tape and higher costs.
Bloomberg reports this has meant major companies such as Airbus and Rolls-Royce have been forced to shift design-approval functions to the continent to get round the issue. However, some other firms are unwilling to do this until they have clarity on what the long-term environment will look like.
Jonathan Hawkings, policy director at ADS, told the news provider companies are in "no man's land" until the situation gets resolved, which could drive business elsewhere.
He added: "If UK companies are unable to demonstrate how they'll get approvals but a competitor in the EU can, there's a real risk that work just moves to the EU27."
This is not the only Brexit-related issue facing the sector. Aerospace firms in Northern Ireland are seeing further challenges after the creation of an effective trade border in the Irish Sea that means checks will be required on goods moving within the UK.
Bloomberg noted that while the sector is ordinarily exempt from tariffs, the Brexit deal does impose duties on raw materials entering Northern Ireland that are then processed to form another product. ADS claims this affects up to 90 mostly small companies in Northern Ireland, costing a total of around £65 million pounds a year.
