C is for Customs
For most people working in the international logistics sector the biggest impact of Brexit will be on the changes to the rules and procedures they need to observe for the movement of goods across borders. Britain imports more than she exports and the although much is made of the prospects for exporters in the political debate, the changes will be just as important to business sourcing goods from Europe and the forwarders and carriers bringing them into the UK.
So how will Customs procedures change after Britain leaves the EU?
The answer to that question depends on exactly what relationship Britain ends up agreeing with the European Union over future access to the European single market. Much of the current political debate is about the trade-offs of being part of Customs-free trading relationship (the Customs Union) and restricting the free movement of people and the jurisdiction of the European Court over British legal judgements, both of which appear to be essential outcomes for a lot of people in the Brexit debate.
There are, however, a range of options for the way the trading relationship Britain ends up having with Europe and each one will brings its own range of Customs rules and trade procedures. It will be the nitty gritty detail of these rules and procedures that will decide just how burdensome it will be for British companies to import and export goods. That’s not to say it won’t happen, just that a lot of people – many of them in FTA member companies – will be be working hard over the next few years to learn the new rules, sort out the procedures and make it all happen as close to the current levels of efficiency and reliability.
The options available fall into four broad categories.
1. Out of the European Union, but still in the Customs Union, like Turkey. This would limit what other trade deals Britain could strike with other non-EU countries
2. Out of the EU and the Customs Union but still in the European Economic Area (EEA), like Norway. This will probably require Britain to accept the free movement of people and be subject to the rulings of the European Court
3. Out of the EU, the Customs Union and the EEA, and striking a Free Trade Agreement (FTA) with either the EU en bloc or with individual EU countries, like Russia.
4. If none of the above applies then Britain can still trade with the EU under the World Trade Organisation (WTO) rules, like most African countries.
The issue for FTA members will be the change in procedures from what happens now, with Britain a fully paid-up member of the EU, the Customs Union and the Single Market. The four options are being vigorously debated by the media in terms of political consequences, however, virtually nothing is known about the precise requirements for goods passing into and out of the EU under the different relationships. So FTA is liaising with other trade bodies and institutions to work out exactly what importers and exporters would need to do under each of these four options: what forms, what paperwork, what declarations, what tariffs would need to be used?
Getting all this worked now doesn’t just mean we can be ready to tell members what to do when the eventual relationship is agreed. There is a bigger purpose: FTA believes the ease with which goods can be imported and exported should be as big a part of deciding which option the Government negotiates as the many other factors at stake. Using our analysis of the impact of Brexit on Customs and trade procedures, FTA will be working out with its members what would be the best set of arrangements for Britain to continue trading with Europe and the rest of world and making the sure the Government is fully aware of the consequences of its decisions.
We will be producing our first analysis and report in time for our Keep Britain Trading Conference on Wednesday 15 March 2017 at the Queen Elizabeth II Conference Centre in Westminster. This event aims to make sure you are Brexit-ready and understand the trade options available to the Government as it negotiates Brexit and their impact on operations, how we can make future free trade agreements more logistics friendly and the latest perspectives from the UK Government. Book your place today at this must-attend conference.
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