Business, Forwarding, Freight News, Logistics

Brexit transition deal agreed but no word on Customs

[ March 20, 2018   //   ]

Brexit secretary David Davis and EU chief negotiator Michel Barnier said on 19 March that they had reached a broad agreement on a Brexit transitional deal but without giving any detail of future customs arrangements between the UK and EU.

The transitional period will be from ‘Brexit Day on 29 March 2019 to 31 December 2020.

The thorny issue of the Northern Ireland-Ireland border has also been ‘parked’ with the EU side mooting its suggested ‘backstop’ arrangements with Ulster remaining partly in the single market and the customs union. However, Theresa May has written to European Council President Donald Tusk saying that more work is needed and suggesting that there could be “safeguards” for Ireland as part of the final deal.

Any suggestion of a ‘hard border’ in the Irish Sea is likely to anger the Ulster DUP politicians that Theresa May’s minority government depends on.

Hard line Brexiteers may also be displeased by the plan to grant EU citizens arriving in the UK during the transition period the same rights as those already in the UK.

The deal does however envisage that the UK would be able to set up its trade deals with third countries during the transition period – assuming that is feasible but that the UK would remain party to existing EU trade deals with such countries.

The Freight Transport Association (FTA) said it was relieved that an announcement had been made, but warned that there is still much to agree on the detail.The EU’s “nothing is agreed until all is agreed” principle still leaves logistics operators uncertain over the future, it added.

Deputy chief executive ” James Hookham, pointed out: “There is still a huge amount of technical agreement required to ensure that trade can continue to move between the UK and the European Union with as few delays as possible, if industry and businesses are not to be left with huge breaks in their supply chains, at the end of the transition period.

“By ratifying the transitional period to run over the next 20 months, negotiators will be granting business a welcome breathing space in which to formulate plans and learn new processes for trade after December 2020.  However, this timescale and its detail is still to be formally ratified by both sides, and with the inherent risk of a ‘no deal’ outcome at the end of negotiations, business should be wary of complacency and plan accordingly.”

However, he added that the deal did appear to give more time to agree new border procedures and to allow UK to continue to employ EU nationals up until the end of the transition and beyond.

Business still needed to know what customs and trade procedures look like after the transition period, namely the customs duties and taxes, the formalities required in the UK and the arrangements for border inspections of goods, the number of trucks that will be allowed to cross the border and the arrangements for the recognition of drivers’ licences and qualifications.

He concluded: “Clarification in these two areas is a good start but we are still a long way from achieving low friction trade after Brexit.  The transition period is welcome but it still leaves a lot for government and industry to achieve in an incredibly short space of time.”

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