Tuesday November 24, 2020
20-10-20

Post-Brexit trade deal still possible as negotiations poised to resume

Dover is the UK's top trade gateway - or bottleneck
Dover is the UK's top trade gateway - or bottleneck

The EU and the UK are poised to return to the negotiating table and resume talks on a post-Brexit trade deal as both sides adopted a more conciliatory tone following the rhetoric and negative sentiment expressed over the last few days which raised fears that an agreement was beyond reach.

Late last week, the UK government had urged the country's business sector to prepare for a ‘no-deal Brexit’ when the UK’s transition period from EU regulations expires on 31 December unless the bloc made a fundamental change in its approach to the deadlocked trade and security negotiations.

But the EU’s chief negotiator, Michel Barnier, is reported to have held a “constructive” video conference call with his UK counterpart, David Frost, yesterday afternoon to set out the structure of future talks.

The volte-face is a huge relief to freight and logistics industry bodies who continue to lobby for a UK-EU trade deal.

Elizabeth De Jong, Director of Policy at freight association Logistics UK, emphasised that a deal was vital for the transport and logistics industry and for the whole economy, which relies on fast and efficient supply chains. “To keep Britain trading, trucks must keep going through the borders with the least possible friction; a deal with the EU is vital to achieve this and to enable the sector to focus on maintaining its resilience during the COVID-19 pandemic and investing to improve performance,” she said.  

New ‘Border Operating Model’

As for recent Brexit-related developments, earlier this month, the UK government “ramped up preparations” for the end of the UK’s transition period after leaving the EU by publishing an updated Border Operating Model. This provides further detail on how the future Great Britain (GB)-EU border will work and the actions that traders, freight and logistics intermediaries, and hauliers involved in UK-EU trade will need to take before the end of this year and beyond.

The updated guidance “follows extensive engagement with the border industry and the £705 million package of investment for border infrastructure, jobs and technology, announced earlier this year”, the UK government underlined.

It said this publication “gives traders further information on the changes and opportunities they need to prepare for as a result of us leaving the EU Single Market and Customs Union. These steps will be needed regardless of whether we reach a trade agreement with the EU.”

Among the new elements in the updated GB-EU Border Operating Model are that it maps out the intended locations of inland border infrastructure, sites that “will provide the necessary additional capacity to carry out checks on freight.”

In addition, the document “confirms, after extensive engagement with industry, that a Kent Access Permit will be mandatory for HGVs using the short strait channel crossings in Kent. The easy-to-use ‘Check an HGV’ service will allow hauliers to check if they have the correct customs documentation and obtain a Kent Access Permit.”

Freight capacity agreements

Last week, in an attempt to mitigate the risk of disruption to key freight flows and supply chains as the UK and the EU adjust to new border processes at the end of the UK’s transition period from EU rules at the end of this year,  the UK government announced the signature of agreements with four ferry operators to provide freight capacity equivalent to over 3,000 HGVs per week.

The contracts with Brittany Ferries, DFDS, P&O and Stena, collectively worth £77.6 million, will focus on nine routes serving eight ports “in areas less likely to experience disruption” in the early weeks of 2021, the UK government said, in order to ensure that “vital medical supplies and other critical goods will continue to be smoothly delivered into the UK whatever the outcome of negotiations with the EU.”

These ports include Felixstowe, Harwich, Hull, Newhaven, Poole, Portsmouth, Teesport and Tilbury. The contracts will be in place for up to six months after the end of the transition period, the government added.

Time running out for cross-border commerce

Meanwhile, planning for Brexit Day by cross-border e-commerce players ranges from “excellent” to “chaotic,” according to a UK-based company specialising in software support services to the sector.

Hurricane Commerce, which provides solutions spanning data enhancement, duty and tax calculation, prohibited and restricted goods screening and denied parties screening, claims the discrepancy between those who have put in place robust plans and those who haven’t is huge - and that time is running out to get Brexit-ready.

The company underlined that postal authorities, carriers, e-commerce merchants and marketplaces all face a severe impact on their businesses if they are not able to provide complete and valid data on parcels from 1 January.

Martin Palmer, Hurricane Commerce’s chief content and compliance officer, commented: “This is not just about the UK and trading into the EU; it is also about the remaining 27 EU member countries and their cross-border trade into the UK.

“The phrase ‘My shipment is stuck in customs’ is often used by businesses and the ever-growing number of private citizens using international e-commerce retailers. The perception is that customs officers and their bureaucratic requirements are bringing the world to a grinding halt.”

He continued: “The reality is quite different. Most customs authorities operate sophisticated, automated clearance facilities taking just a few moments for a shipment with the correct data to clear customs. The real problem is usually that the exporter or importer has not complied with the requirements to import a shipment into a country and have failed to supply full and accurate data and documentation.

“The problem is only going to be exacerbated by Brexit. We know that while some postal operators, carriers and e-commerce merchants are ready for the changes, many more are a long way from being prepared. The state of readiness ranges from the excellent to the chaotic.”

Palmer warned that anyone who leaves their Brexit preparations until the last minute is asking for trouble.

“We are now less than 80 days away from this seismic change in the trading relationship between the UK and the EU. Customs authorities themselves are having to scale up massively to cope with the huge increase in requirement for customs declarations and there will inevitably be some major challenges as both sides get used to the new norm.

“It therefore means the more prepared those involved in cross-border e-commerce trade are, the more likely your parcels are to get to their destination as seamlessly as possible after 1 January.”

SourceUK government, Hurricane Commerce, international media, CEP-Research
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