New commission will have 'intensely practical focus' on business issues caused by UK-EU trade deal

Mon 12 Apr 2021
Posted by: William Barns-Graham
Trade News

brexit flags

A cross-party group of MPs has joined with business leaders to set up an independent commission to scrutinise and suggest improvements to the UK-EU trade agreement.

The group has been set up following the government’s closure of the Select Committee on the Future Relationship with the European Union after the trade deal was concluded at the end of last year.

The new group has been established as the House of Commons European Scrutiny Committee - which assesses all legal documents relating to UK-EU trade relations - has criticised the government for not allowing sufficient scrutiny of the Northern Ireland Protocol and last year's trade deal.

Trade deal

The EU-UK Trade and Cooperation Agreement (TCA) guarantees tariff- and quota-free trade with the EU for British businesses, but critics have called its Rules of Origin chapter – which firms need to comply with to avoid paying duties – complicated.

The deal also does not remove the need for firms to complete customs declarations – something which firms trading between the UK EU must now do as a result of the UK leaving the customs union.

While this requirement is being introduced in phases for UK importers, many European firms sending goods to the UK are charging British customers for new shipping and VAT costs that have resulted from Brexit.

According to the Office for National Statistics exports to the EU fell 41% in January and imports dropped 29% – the largest declines since comparable records began in 1997. 

Practical focus

Labour MP Hillary Benn, who chaired the previous select committee and will be a member of the new ‘trade and business commission’, told the FT that the new group would have “an intensely practical focus on the problems businesses are facing”.

Other members include Virgin Group chair Peter Norris, Conservative MP Roger Gale and former global managing partner of Allen & Overy, Andrew Ballheimer.

The first ‘evidence session’ is due to take place on Thursday and will look at whether losses caused by new trade barriers with the EU can be offset by new agreements with non-EU markets.

Consumer clarity

The consumer group Which? has also recommended that EU retailers should give a clearer indication of new import costs that their British customers now face, including VAT and shipping costs. 

A Which? survey, reported in the Guardian, found that one in 10 consumers have faced unexpected VAT demands, import duties and courier fees on top of the price of their goods.

The average charge was £41 although some rose to £300.

UK to join legal convention

In a more positive development for UK-EU relations, Brussels allow the UK to join the Lugano convention according to the FT

The decision benefit Britain’s legal services industry as it allows British courts to have their judgements on commercial disputes upheld in other jurisdictions.

Without this, Britain would be reliant on a patchwork of international agreements and companies could possibly need to duplicate legal proceedings in multiple markets, increasing costs.

Final decision

As reported in the IOE&IT Daily Update, the UK’s application was still under consideration by the EU, but other parties to the convention had backed its accession.

With negotiations on the EU-UK relationship completed, there is a recognition in Brussels of the practical benefits of having Britain in the pact.

The final decision on UK membership will lie with the European Council.