New trade proposals welcomed by UK businesses
Future trade relationships between the UK and the EU are on the minds of many businesses. The UK government has attempted to clarify its intentions in a new policy paper discussing trade with Europe.
16 August 2017
The UK government has issued a paper outlining its ambitions for Brexit and the future of customs arrangements between the UK and the EU. In the paper, the government said that it hoped to keep trade as free as possible and forge new trade relationships with Europe.
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The government's paper outlines two basic options for future EU-UK customs arrangements. The first is streamlined, keeping the additional requirements for EU-UK trade to a minimum, but implies that some form of customs declaration will be required. The second proposes a new customs partnership with the EU, which is radical and has not been tried before. This would remove the need for customs processes at the border, although there would be a need to align UK and EU customs procedures.Robert Keen said, “The second option would certainly resolve the Dover Straits issue, as well as that of Northern/Southern Ireland trade.“To accommodate any of the proposals laid out in the paper, EU negotiators would have to change that stance and it will be interesting to see if that happens, or whether those on the EU side of negotiations determine that the UK is trying to have its cake and eat it.
Read David Sapsted's article on Establishing Right to Remain – which discusses the uncertainty over immigration which the UK faces following Brexit – in the Summer 2017 issue of Relocate Magazine.
For related news and features, visit our Brexit section.
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Free trade a bold step by UK government
Attempting to maintain frictionless customs arrangements has been seen as a bold move given the EU’s public stance on the single market. The bloc has stated that withdrawal from the EU means a withdrawal from its free trade agreements.Businesses have reacted positively to the government’s intentions, despite sounding a note of caution given potential resistance by the EU.Robert Keen, director-general of the British International Freight Association (BIFA), said, “BIFA believes the paper shows that there now appears to be a united position in the Cabinet in favour of a more businesslike approach to Brexit and the need to facilitate trade with the EU.“BIFA policy ever since the 2016 referendum has favoured retaining something as close to the single market as possible. In reality, certainly since the 2017 General Election, this has meant remaining in the Customs Union, or something as close to it as possible preferably, in the long run, but certainly during any implementation period, after the UK leaves the EU.Related stories:
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The government's paper outlines two basic options for future EU-UK customs arrangements. The first is streamlined, keeping the additional requirements for EU-UK trade to a minimum, but implies that some form of customs declaration will be required. The second proposes a new customs partnership with the EU, which is radical and has not been tried before. This would remove the need for customs processes at the border, although there would be a need to align UK and EU customs procedures.Robert Keen said, “The second option would certainly resolve the Dover Straits issue, as well as that of Northern/Southern Ireland trade.“To accommodate any of the proposals laid out in the paper, EU negotiators would have to change that stance and it will be interesting to see if that happens, or whether those on the EU side of negotiations determine that the UK is trying to have its cake and eat it.
UK businesses desire a free trade agreement
Alison Horner, VAT partner at MHA MacIntyre Hudson, a financial accountancy and business adviser, explained, “Without decisive action, we appear to have only one outcome, defaulting to the World Trade Organisation’s (WTO) customs duty tariffs. The government’s understanding of the practical implications of this outcome is finally becoming evident, which should be reassuring for businesses.“A Free Trade Agreement (FTA) is what all UK businesses who deal with European trade really want. It’s also better for UK consumers, who, without an FTA, could for example be faced with an additional 10 per cent customs duty cost when they buy a European car. Businesses trading with the EU may also encounter administrative snarl-ups similar to those seen recently with holidaymakers at passport control in some EU destinations.“The proposals are only a starting point, and we think that the retail and motor industries, in particular, will lobby hard for a sensible agreement, as it affects both importers and exporters of goods throughout Europe. In the meantime, businesses should continue to assess the potential worst-case scenarios and review WTO tariff codes for their intra-EU supply chains, just in case.”Read David Sapsted's article on Establishing Right to Remain – which discusses the uncertainty over immigration which the UK faces following Brexit – in the Summer 2017 issue of Relocate Magazine.
For related news and features, visit our Brexit section.
Access hundreds of global services and suppliers in our Online Directory
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