Green light for first three UK freeports

The government has given the go-ahead to Britain's first three freeports, with several others due to be approved in the coming months.

Busy container port

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Ports at Teesside, Plymouth and Solent will each now be eligible for up to £25 million in seed capital funding from the government, as well as “potentially tens of millions of pounds” in locally retained business rates.

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South coast to benefit from first three Freeports

Levelling Up Minister Dehenna Davison said: "We are taking full advantage of the freedoms of leaving the EU and these freeports in Teesside, Plymouth and South Devon and Solent will attract new business to often overlooked areas, creating thousands of jobs.Plymouth and South Devon and Solent will attract new business to often overlooked areas, creating thousands of jobs."Now they are up and running, these Freeports will harness local expertise to grow vital industries and turbocharge our national economy."Freeports will generate prosperity and spread opportunity throughout the UK by driving innovation and throwing open our doors to trade with the world."

North-West, Midlands and East of England next in line?

Then-Chancellor of the Exchequer Rishi Sunak now prime minister launched the plan to establish eight freeports in March last year.In addition to the three that have now been approved, others in Liverpool, East Midlands Airport, Felixstowe and Harwich, the Humber region, and Thames are due to get the green light soon.Ministers have also said that they plan to establish at least one freeport in each of Scotland, Wales and Northern Ireland as soon as possible.Freeports benefit from a range of measures designed to promote local regeneration, including tariff exemptions, tax breaks and relaxed planning and customs regulations.

Welcome news for exporters

Marco Forgione, Director-General of the Institute of Export & International Trade (IOE&IT), described the first round of approvals as "great news" for UK trade prospects.“We’re delighted to hear about the launches of the Plymouth, Solent and Teesside freeports. The news is a big boost for traders during a time of significant economic uncertainty," he said.“IOE&IT has backed this initiative from the start and we have worked closely with the freeports. For instance, we supported the launch of the Centre for Digital Trade and Innovation in Teesside Freeport. This is just a start though, particularly with further sites to be announced in Scotland and Wales.“This initiative will ensure trade plays a central role in the economic recoveries of all the regions of the UK. Government, industry and freeport operators now need to work together to raise awareness of the benefits and how businesses can make use of them.“We will continue to work with all the freeport operators across the UK to ensure more launches can take place as soon as possible in 2023. Indeed, we are delighted that our hands-on support enabled Liverpool Freeport to confirm its first designated customs site operator this week."

EU concerns

However, the news of the freeport approvals has not gone well with everyone. According to the Financial Times, the European Union fears the ports could lure investment away from the bloc.The newspaper said Brussels officials wanted to ensure the policy was in line with the post-Brexit Trade and Cooperation Agreement (TCA), which facilitates tariff and quota-free trade between the UK and EU. The UK declined to harmonise its regulations with Brussels but agreed to prevent “distortions of trade or investment” by ensuring a “level playing field for open and fair competition”. Sam Lowe, a partner specialising in trade at consultancy Flint Global, told the FT that it was “difficult to see” how freeports would become a problem between the EU and UK.“The EU has explicitly exempted goods that benefit from ‘duty drawback’ in other trade deals, so the commission knew what it was getting into — and it has the mechanism in the TCA to address this, if it becomes a problem,” he said.

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