Brexit: Trade Minister warns of no-deal impact for Czech business

The UK is set to leave the EU on Dec. 31, but talks continue on a future relationship between the two parties

Tom Lane

Written by Tom Lane
Published on 14.12.2020 10:13 (updated on 14.12.2020)

Exporters based in the Czech Republic could be heavily impacted by a no-deal Brexit, according to the Minister for Industry and Trade Karel Havlíček.

Speaking to Novinky, Havlíček warned of the damage the failure of the EU and the UK to get a trade deal could have on Czech companies, with the UK the fifth largest market for Czech exporters.

Currently, the two sides are negotiating and agreed yesterday to extend the deadline on talks, with the Brexit transition period coming to an end on Dec. 31.

“The introduction of customs duties on exports and imports will be felt very negatively by our companies. In particular, we may be concerned that the customs burden and possible regulatory barriers will reduce the competitiveness of our exporters in the UK market compared to domestic producers." said Havlíček.

The COVID pandemic has damaged economies across the globe with stores and hospitality establishments being closed and travel restricted to various degrees.

Havlíček says this makes it even more important that there are no large tariffs on goods travelling between the two countries.

He added:

"Especially today, when we are trying to keep our economy going through a coronavirus pandemic, it is showing how important it is for our prosperity to maintain open markets and how crucial our integration in the EU is."

Luďek Procházka, director of Gerlach, the largest Czech provider of customs services, told Novinky that he expects delays at the border crossing when the transition period ends, citing customs declarations and a change in how products will be labeled.

"Hard Brexit can make the Czech Republic the seventh most affected country in the EU. We risk a fall in GDP of up to one percent. London is set to impose an average duty of 5.7 percent on EU goods. However, the import of vehicles will be burdened by Britain and the EU with a 10% duty, which will damage the Czech car industry, "said Procházka.

The UK voted to leave the European Union in 2016 and signed a withdrawal agreement earlier this year, with a transition period in place until the end of the year.