The still uncertain form of the upcoming Brexit leads to growing caution in the mutual Czech-British trade. Especially with an outlook of a so-called hard Brexit, Czech companies are thinking more carefully about concluding a contract with their British counterparts. They fear that Brexit may be followed by many years of negotiations over the form of a trade relationship between the EU and Britain, which would make cross-border trade across the English Channel more expensive.
Although Britain may reduce the EU import tariffs, under the rules of the World Trade Organization which would have to follow in the case of hard Brexit, it would have to reduce tariffs to the same level for third party countries, so for countries outside the EU, too.
The United Kingdom, together with Austria, is now the only key importer to the Czech Republic whose volume of imports has decreased year-on-year. Imports from Austria fell by 1.6 percent year-on-year from January to November, but imports from Britain decreased far more, by 14.9 percent.
Caution in mutual trade is also evident in Czech exports. The United Kingdom is the only one out of the key export destinations of the Czech Republic where we exported a lower volume of goods in the period from January to November last year, by about 2.7 percent.
If the so-called hard Brexit occurs, it would further weaken imports from Britain to the Czech Republic as well as the export of Czech goods to the UK.