Friday, June 12, 2020

Muted Reaction as UK Stops Full Checks on Imports Post-Brexit but EU Fails to Reciprocate

Negotiations Continue but No Extension to Transition Period Possible
Shipping News Feature

UK – The news that the government will not implement full import controls after the Brexit transition period expires received a positive response from the freight and logistics sector as a whole. However as this applies only to imports, and the EU immediately responded by saying it would not mirror the process, and would implement full checks on goods being exported from Britain, perhaps the announcement elicited a more muted reaction than would otherwise have been the case.

The announcement came as the government formally confirmed it will neither accept, nor seek any extension to the transition period. The decision to delay controls, probably for 6 months, came after this morning’s meeting of the Withdrawal Agreement Joint Committee, the last formal moment to agree an extension to the transition period, at which the UK Government confirmed its long-standing position that no such extension would be sought. A statement read:

”There will be no further opportunities to extend the transition period. The UK will regain its economic and political independence on 1 January 2021 at the end of the transition period and uphold a key demand of the British people.”

So how did the relevant industry bodies react to the news that the government has seemingly finally understood that the mechanics to introduce those import checks has to be delayed, presumably accepting that, as many in the industry have been telling it, the infrastructure is not in place and the delays resulting would simply make the situation untenable?

First up is Robert Keen, Director General of the British International Freight Association (BIFA) who says that his members, the freight forwarders that handle a significant proportion of that trade, will also be hoping that the transfer of the Border and Protocol Delivery Group from HMRC to the Cabinet will have the galvanising effect of ensuring the readiness of the border for the end of the transition period. He commented:

“A recent survey of our members, revealed that the majority of respondents believed that an extension to the transition period is desirable, if no trade deal is agreed by December 31st 2020, and UK trade with the EU is conducted on WTO lines. With that option now off the table, we hope that a trade deal between the EU and UK can be agreed before the end of the year.

“Even with a phased transition for the new border processes, and the promise of an additional £50 million investment in Customs IT infrastructure and training, we remain concerned on a number of issues, including the recruitment of staff qualified and experienced in Customs procedures, and the lack of available time to train newcomers, which is not a five-minute job.

“In effect we have a plan, but as always, the devil will be in the detail. For instance, how long will it take to build the infrastructure that the government recognises will be required? And it remains to be seen whether the EU will reciprocate with a similar phased transition for UK exports to the EU.”

As we say the latest statement from Brussels seemed to kill that hope, with the general opinion there that, whilst Britain is not prepared to institute the necessary procedures, that is not the case on the other side of the Channel. A similar reaction came from Road Haulage Association (RHA) chief executive, Richard Burnett who said, whilst welcoming the news, that the EU position would need reconsidering:

“Thank goodness they’ve listened to us, we wrote to Michael Gove at the beginning of the Covid crisis in March, saying that there needed to be a delay as businesses simply wouldn’t be ready. We stressed that there needed to be an implementation period for transition and I guess that’s exactly what this is going to be.

“At the moment our sense is that they [the EU] are stonewalling. They’re playing the same tactics as before and that means that we’ll have to prepare for a no-deal free trade agreement. We’ll also have to revisit plans such as Operation Brock to park trucks up in Kent, just in case we have to adhere to a complete customs process on the other side.

“The six-month relaxation, as we see it at the moment, will provide more time for businesses to prepare. The past few months have clearly shown that we have been able to maintain imports but the big issue is preparing UK businesses to be able to export.”

By contrast the Freight Transport Association (FTA) was considerably more upbeat and hopeful that the two sides would now get down to the business of ensuring trade between Britain and the European bloc would find a happy medium, with Alex Veitch, Head of International Policy at FTA, commenting:

“Today’s announcement is very welcome news for the logistics industry. Government has listened to our concerns and made allowances to enable our sector to recover from the Covid-19 pandemic and plan effectively and in good time for a new trading relationship with Europe and will come as a huge relief to the 200,000 or so companies whose businesses are based on access to the EU market. They will now have time to learn and adapt to new procedures.

“As a sector, logistics has been fully focused over the past few months on ensuring that the UK’s economy has been supplied with all the items it needs to cope with the unprecedented challenge of Covid-19. FTA wrote to Michael Gove in March and again in June to express our concerns over the number of issues which remain to be resolved to ease the UK’s trading departure from the EU and it is encouraging that he has recognised our concerns and acted to mitigate them.

”Of course, there is still much to be agreed, both from a UK and EU point of view, as we leave the European Union. The proposal is measured and balanced, so that logistics businesses will not feel the full shock of a sudden cut-off at the end of 2020. We are grateful to government for listening to the concerns of the industry and look forward to working with them over the coming months to agree the detail of the processes which will be used to keep the UK trading from 1 January 2021.

”Our flexible, highly skilled sector stands ready to make a success of Brexit and today’s announcement has provided more clarity. We now urge negotiators on both sides of the table to progress towards a Free Trade Agreement to complement the measures announced today.”

The fact is however that, having accepted the UK is unprepared to handle incoming freight in a manner it wished to, there is seemingly no need for the EU to adopt a similar policy. The number of ports in the UK, particularly the Channel ports, would, as we have seen previously, soon become choked with traffic if Customs procedures take longer than at present.

The systems currently in place have developed over time as trade with Europe has grown, upsetting the balance will certainly result in problems. On the continent however, if the EU takes the stance it seems to currently, then British trucks could be in for extensive delays when carrying export traffic, whilst foreign hauliers will be reluctant to send accompanied vehicles to the UK for fear of unwarranted delays when returning home.

If this is to be the pattern there will be a sharp rise in both the number of unaccompanied trailers making the transit, and in the rates charged for carrying accompanied freight.

Photo: Truck queues such as we have seen before need to be avoided. Courtesy Black Pig.