Business, Freight News, Logistics

Freight industry calls for Brexit breathing-space – updated

[ June 5, 2020   //   ]

The Freight Transport Association (FTA) is calling for the government to request an implementation period for whatever Brexit agreement is reached, to enable the industry to adopt and adapt to new trading practices with the EU – including implementation of the Northern Ireland Protocol.

Following his participation at the House of Lords Select Committee on 3 June, FTA policy manager for Northern Ireland, Seamus Leheny, said that with less than seven months until the end of the Brexit transition period, FTA and its members in Northern Ireland are deeply concerned by the lack of government engagement on the Protocol. Alongside the British Retail Consortium and Northern Ireland Food & Drink Association, FTA is urging the government to engage with business so that it can prepare for the successful implementation of the UK’s departure from the EU. A fully functional working group should be established immediately if the industry is to be ready for the post-Brexit trading environment on 1 January 2021.

Leheny said: “With the COVID-19 pandemic monopolising the industry’s attention, and following Stormont’s calls for an extension to the Brexit transition period, FTA is requesting an implementation period  once an agreement has been reached between the EU and UK, in which all necessary preparations for EU departure can be made. Businesses need clarity on the new trading agreement so they can prepare effectively for the massive changes that will undoubtably come.

“Northern Ireland’s future prosperity relies on the Protocol being implemented effectively with minimal disruption; frictionless trade must be maintained. Alongside other industry groups, FTA is ready to work with both Stormont and Westminster to ensure trade remains as resilient as possible in the months ahead.”

In a recent Briefing Paper, the UK Trade Policy Observatory (UKTPO) said that the Northern Ireland Protocol did not fully address the challenges which come from the special situation around the border in the Irish Sea. Businesses should expect more paperwork, bureaucracy and additional costs on trade between Northern Ireland and Great Britain when the transition period ends in seven months’ time, it warned.

Among the key stumbling blocks are the criteria for determining when a good is not at risk of moving into the EU market and would therefore not be subject to tariffs. Furthermore, permitting goods from Northern Ireland to freely enter Great Britain could impact on the UK’s trade relations with third countries and even lead to WTO disputes.

UKTPO associate fellow Dr Jerzewska said: “There is a shortage of detail in the Command Paper on which goods will be subject to tariffs and regulatory checks, on how customs controls would take place, and the procedures and paperwork that firms will need to adhere to.”

The paper also notes that by permitting goods from Northern Ireland to freely enter Great Britain, this could impact on the UK’s trade relations with third countries as it raises the possibility of different tariffs being applied on goods entering Great Britain depending on whether they come via Northern Ireland or directly. In so doing the UK could be opening itself up to the possibility of trade disputes.

Peter MacSwiney, chairman of specialist customs software firm Agency Sector Management (ASM) Chairman, also said that forwarders trading between Great Britain and Northern Ireland would have to implement systems to comply with the new checks by the end of this year, which was not viable.

He explained: “If we were speaking of having a working system in place by 2025, that would be one thing. Brexit is little more than six months away and, without official guidance, the freight community is genuinely concerned that trade between Northern Ireland and Great Britain, in both directions, will be severely affected.

“Although we do know there have to be Customs declarations, we do not know what the actual process is going to be, though the Government has said there is no need for a new physical Customs infrastructure in Northern Ireland.”

He continued:  “From the very earliest stages of the discussion, the industry has known that the movement of freight into, and out of, Northern Ireland was going to be a massive challenge post-Brexit, and the Covid-19 pandemic has dramatically compounded the problems,” MacSwiney said.

A 12-month extension of the transition period would be a practical solution, he added.

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