Government releases Brexit positioning paper – our Director General responds on BBC

Tue 15 Aug 2017
Posted by: William Barns-Graham
Trade News

Westminster and Union Jack

The government today released a Brexit positioning paper making clear some of its stances regarding what it hopes to achieve from the negotiations regarding trade.

Speaking to the BBC this morning, our Director General Lesley Batchelor declared that the Institute welcomes greater clarity from the government on its plans, but maintains that we will have to wait and see what the results of the negotiations will be.

The European Parliament’s Brexit Coordinator Guy Vershofstadht has already responded via Twitter describing the UK’s plans as ‘a fantasy’.

Transition period and a ‘temporary Customs Union’

 The headline from the paper was the proposal for a transition period that would establish a ‘temporary Customs Union’ between the EU and the UK. Whether this would be a continuation of the existing union the UK is part of, as part of its current membership of the EU, or whether it would mean something more akin to unions between the EU and Turkey, San Marino or Andorra, remains to be seen.

It is believed that the temporary union would be a bespoke arrangement and one that would have to be put in place before the negotiations are due to end in March 2019.

With some of the typical features of a Customs Union like tariffs, customs procedures and trade policy also owing to the UK’s membership of the Single Market, it remains to be seen how this new temporary customs union will come about. 

It is quite apparent that the UK wants the ability to negotiate new trade deals with non-EU partners to be a part of this new Customs Union relationship, but whether an agreement will be reached on this will be a key negotiation point.

Streamlining customs procedures to negate the need for a customs border?

The announcement also came with a vision for streamlining customs procedures to ‘negate the need for a customs border between the UK and the EU’. These procedures typically cover two key elements of trade: security & regulatory issues including licensing, checking for stowaways or smuggling and other checks; and financial issues like collecting duties and taxes.

While the financial element can be managed by declarations being made remotely, the security aspects would encompass concepts such as pre-notification of shipments and would require extra admin for haulers and carriers. With technologies like vehicle recognition developing quickly to allow more mobile compliance checks and smuggling prevention, and with ‘spot checks’ still likely for vehicles with suspect loads, this ‘streamlining’ could theoretically work, but would require the acceptance of all the EU member states.

How we’ll keep you up-to-date with all the developments

As always the Institute will be sure to keep you up-to-date with the latest developments in the Brexit talks. You can read the thoughts of our young president Arne Mielken about the paper here.

Our main advice is to plan ahead for the different potential outcomes in order to safeguard against any sudden impact on your ability to do trade around the world.

Our post-Brexit workshops are an excellent starting point for this, while learning the skills of trade – like completing export documentation and understanding how WTO rules work – will only become more important.

What are your thoughts?

And we’re always keen to hear from you about your opinions of the UK’s Brexit negotiating stance. As ever, please do get in touch by our Twitter handle - @ioexport – or on our contact us page.