Sunday, January 10, 2021
Baffling Brexit rules threaten export chaos
The quiet of January trade combined with more direct routes being found between Ireland and the European mainland have mitigated the impact of Brexit, but that does not mean that businesses are feeling the effects nor that things are not going to get worse.
As the Observer reports, leading business groups are urging Ministers to go back to the negotiating table to sort out the “baffling” array of post-Brexit rules and regulations that now threaten much of the UK’s export trade to the EU.
The paper says there is mounting anger among UK firms at cross-border friction they were told would not exist. As a result, British manufacturing and trade organisations met Cabinet Office minister Michael Gove in an emergency session on Thursday to discuss problems resulting from the deal struck by Boris Johnson with the EU before Christmas.
They add that although the prime minister had hailed what he claimed was a “zero-tariff” and “zero-quotas” deal that would allow free and simple access to the single market. Less than a month on, Britain’s EU departure appears to be anything but pain-free:
In the first week after the UK finally left both the single market and customs union, the parcels firm DPD suspended some of its services, bookseller Waterstones halted sales to customers in the EU and UK fishermen warned they would not be able to sell their fresh produce into EU markets because of delays at borders.
There were also problems with consignments between Great Britain and Northern Ireland as new border checks caught many businesses unawares. Luxury food store Fortnum and Mason also told customers on its website: “We are temporarily unable to deliver to Northern Ireland or countries in the European Union”, while Debenhams has temporarily shut its online business in Ireland.
Some of the problems are being blamed on a rushed deal, and others on the sheer complexity of arrangements including “rules of origin”, some of which have not been finally determined. Only goods made up largely of parts that originate in the UK qualify as tariff-free.
Stephen Phipson, the chief executive of the manufacturers’ organisation Make UK, is especially damning. He said much still needed to be negotiated between the UK and EU:
“Industry welcomed the trade agreement that avoided the catastrophe of no-deal, as tariffs and quotas would have been a disaster for exporters. However, this is only a starting point, as there are still substantial issues that need ironing out, with many months, if not years, of tough negotiations ahead.
“There are customs experts with 30 years’ experience who are baffled by what the new regulations mean, let alone small- and medium-sized businesses who have never had to deal with the kind of paperwork that is now required. The great fear is that for many it will prove too much and they will simply choose not to export to the EU.”
He also raised fears about the UK car industry, which could be adversely affected by tariffs if EU rules relating to the origins of components used in car manufacture cannot be met. “Having built up seamless and complex supply chains over decades, the automotive sector in the UK is facing a jolt to its systems that places its very future under threat,” he added. “While there is no suggestion multinationals will close plants overnight, we have already seen decisions to build new models placed elsewhere. As those models that have been built in the UK for many years come to the end of their life, we are likely to see a slow puncture for the sector of investment drifting away.”
The paper also quotes Sam Lowe, a senior research fellow at the Centre for European Reform, who said there were problems that could grow over coming weeks and months:
“The new import/export formalities are proving problematic for many companies. The lack of obvious queues at the border disguises the fact that many trucks are stuck in depots, unable to head to the ports due to their clients failing to provide the necessary documentation and information.”
So yet another Boris Johnson megashambles, undermining our economy and causing chaos wherever he goes.
As the Observer reports, leading business groups are urging Ministers to go back to the negotiating table to sort out the “baffling” array of post-Brexit rules and regulations that now threaten much of the UK’s export trade to the EU.
The paper says there is mounting anger among UK firms at cross-border friction they were told would not exist. As a result, British manufacturing and trade organisations met Cabinet Office minister Michael Gove in an emergency session on Thursday to discuss problems resulting from the deal struck by Boris Johnson with the EU before Christmas.
They add that although the prime minister had hailed what he claimed was a “zero-tariff” and “zero-quotas” deal that would allow free and simple access to the single market. Less than a month on, Britain’s EU departure appears to be anything but pain-free:
In the first week after the UK finally left both the single market and customs union, the parcels firm DPD suspended some of its services, bookseller Waterstones halted sales to customers in the EU and UK fishermen warned they would not be able to sell their fresh produce into EU markets because of delays at borders.
There were also problems with consignments between Great Britain and Northern Ireland as new border checks caught many businesses unawares. Luxury food store Fortnum and Mason also told customers on its website: “We are temporarily unable to deliver to Northern Ireland or countries in the European Union”, while Debenhams has temporarily shut its online business in Ireland.
Some of the problems are being blamed on a rushed deal, and others on the sheer complexity of arrangements including “rules of origin”, some of which have not been finally determined. Only goods made up largely of parts that originate in the UK qualify as tariff-free.
Stephen Phipson, the chief executive of the manufacturers’ organisation Make UK, is especially damning. He said much still needed to be negotiated between the UK and EU:
“Industry welcomed the trade agreement that avoided the catastrophe of no-deal, as tariffs and quotas would have been a disaster for exporters. However, this is only a starting point, as there are still substantial issues that need ironing out, with many months, if not years, of tough negotiations ahead.
“There are customs experts with 30 years’ experience who are baffled by what the new regulations mean, let alone small- and medium-sized businesses who have never had to deal with the kind of paperwork that is now required. The great fear is that for many it will prove too much and they will simply choose not to export to the EU.”
He also raised fears about the UK car industry, which could be adversely affected by tariffs if EU rules relating to the origins of components used in car manufacture cannot be met. “Having built up seamless and complex supply chains over decades, the automotive sector in the UK is facing a jolt to its systems that places its very future under threat,” he added. “While there is no suggestion multinationals will close plants overnight, we have already seen decisions to build new models placed elsewhere. As those models that have been built in the UK for many years come to the end of their life, we are likely to see a slow puncture for the sector of investment drifting away.”
The paper also quotes Sam Lowe, a senior research fellow at the Centre for European Reform, who said there were problems that could grow over coming weeks and months:
“The new import/export formalities are proving problematic for many companies. The lack of obvious queues at the border disguises the fact that many trucks are stuck in depots, unable to head to the ports due to their clients failing to provide the necessary documentation and information.”
So yet another Boris Johnson megashambles, undermining our economy and causing chaos wherever he goes.
