The EU Green Deal has taken the odd knock due to events but as a recent video shows, this is still firmly on the agenda.
One of the EU’s contributions at an environmental conference in November was to announce a change in the management of plastic waste. From 2026, EU countries will no longer be able to send unwanted plastic to countries outside of the OECD.
Helpful for biodiversity and public health, although there will be an effect on the UK. We currently export about half a million tonnes of plastic waste a year to third world countries, often via the Netherlands and Belgium.
Within a couple of years this will no longer be possible, so alternative routes will need to be found, or better solutions.
Reprieve On Electric Car Tax
Another environmentally related arrival is the electric car and a two way tariff was about to begin on their export to, or import from the EU.
A waiver agreement between the EU and UK has looked likely for some time and is now confirmed. Previously agreed tariffs on electric car exports in both directions will be postponed for three years.
The root cause is a continuing need across Europe to import batteries for electric cars. The hoped for battery manufacturing capacity within Europe has not materialised and will not for some time.
With batteries making up around a third of each car’s value, the chance of keeping within 45% of parts by value being EU, or UK made looked unlikely.
There were concerns in Brussels, about setting a precedent and discouraging battery making within the EU. This could still bring less than ideal conditions to the deal but the principle will happen.
Economic Overlap
The governor of the Bank of England has raised concerns on economic growth, stating this was “lower than in much of my working life”. The government’s forecaster also slashed their growth forecast for the UK.
An end of year EU announcement also blamed economic sluggishness in 2023 on high prices and tight monetary policies. The difference is in expectations of recovery, with the EU believing 2024 will bring business growth and higher employment.
Several economists have suggested the EU will be more able to reduce fiscal support and increase public investment. They also have less of a problem with a demographic shift in the workforce, which affects productivity.
Workforce composition has tended to see higher levels of young and older workers everywhere but particularly in the UK. Those groups often work shorter hours and with doubtless exceptions, are not as productive as middle years staff.
Setting Forecasts Aside
Many point out that forecasts from the OBR, or Bank of England are just estimates and often wrong. They believe UK sectors can prosper in the current situation.
British defence exports back that up, with recent growth in the Middle East and Europe. Five-year exports to Europe increased from £0.8 billion in 2018 to £2.2 billion in 2022, not including Ukraine, where they are part of a military assistance package.
We have seen similar stories in other sectors, such as advertising, consultancy and IT, which demonstrate that a global and European market do exist for the UK.
The ATA carnets for the EU we supply have grown in number, indicating continued trade. Nobody is suggesting the UK’s position is easy and effort is needed but business opportunities have not gone away, including in Europe.