A: A-Z of Brexit implications on logistics - by James Hookham, Deputy Chief Executive, FTA

Posted on: Friday, 7 October 2016 by Alice Bayford

A is for Access

Getting your head round all the issues thrown up by Brexit is a big job, so FTA is helping with an A-Z of the most pressing concerns starting with A for Access to the Single European Market.

Access is the term used to describe the ease with which British businesses will be able to continue selling goods and services to customers in the rest of the EU after the UK has finally left the club. This is a really big deal! In fact, it is many thousands of really big deals for the businesses involved. Britain’s import and export trade with the rest of the EU last year totalled £357.8 billion so changing the terms of access to the single market matters for many FTA members.

British businesses will still be able to sell to European customers, of course, and buy from European suppliers but there is a risk this will it will come at additional cost and with strings attached that will make goods less competitive than they are now. Additional costs could come from new Customs tariffs that the EU imposes on British exports, which could add up to 20 per cent to the price of British goods in Europe, and so-called non-tariff barriers, like new documentation required to prove where goods were made, and that other standards have been met for Customs purposes. Producing them for inspections at border crossings also introduces delays and uncertainties on shipments.

The final shape of the new Access deal will also have a decisive influence on two other big Brexit issues: the extent to which current EU-based Domestic legislation can be amended or dropped, and the continued ability of UK businesses to employ and recruit European workers to work here. That is because of the trade-off between the free movement of goods (meaning no tariffs or paperwork) and the free movement of people, better known as immigration. At the moment the EU minimises the tariffs and paperwork on goods movement but requires unfettered movement of people across borders as an essential pre-condition. This is the central point of disagreement between Britain and the rest of the EU and the political success of any new access deal will depend on the extent to which these competing factors can be optimised to everyone’s satisfaction.

The Government has said that it will reach its own agreement with the EU rather than model itself on one of the other non-EU countries that enjoy differing degrees of access to the single market depending on the extent to which they adopt EU rules, like Norway, Switzerland, Turkey or even Russia. FTA fears that the precise terms of the new deal won’t be known until quite close to the end of the two-year negotiating period allowed under Article 50 of the Lisbon Treaty, leaving little time for business to prepare and avoid the perils of Customs procedures, and life without non-UK workers. Or they may have to accept that much EU legislation will continue to apply domestically as the price of securing good Access to the European single market and its pool of qualified and available workers.

You can find out more about what Brexit means for logistics via FTA's dedicated Brexit centre where you can find the latest news on Brexit and logistics, see what FTA is doing and join our regular webinars and events around the potential effects on your business.

 

(The views and opinions expressed by the authors of these blogs are theirs alone, and do not necessarily reflect those of the Freight Transport Association)

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