Following the EU’s announcement of its mandate, the UK has in turn published its negotiating stance for a comprehensive free trade agreement with the EU. As the Descartes’ corporate Headquarters are in Canada it’s nice to see that the UK Government recognises Canada as a friendly country and officially seeks to follow Canada’s example  as it seeks a Free Trade Arrangement with the EU along the same lines as those “ already agreed by the EU in recent years with Canada and with other friendly countries.”.

Within the announcement, it is not surprising that the UK expects the agreement to use the WTO Trade Facilitation Agreement and the World Customs Organization (WCO) Revised Kyoto Convention as a basis for any trade facilitation; indeed these ideas are already fully reflected in the EU Union Customs Code along with  a drive towards digitalisation. As for the “other international precedents” mentioned, we wait to see which ones the UK Government may have in mind, but it is clear that the UK does not expect all the facilitations and fabulous technical solutions to be available from day one, instead looking forward to “cooperation on measures to improve the efficiency and ease of making declarations over time”. Also note the use of the phrase “ease of making declarations” NOT “removal of making declarations”. 

With specific reference in the mandate to “key trade routes between the UK and EU”  and recognising “the practical constraints of ’roll-on roll-off’ trade” we also need to wait and see what solutions the UK will propose, with HMRC still working on projects around RoRo, NCTS, Safety & Security. Will there be similar arrangements to those planned by France in Calais’ ‘Ready for the Day 1 No-Deal’ scenario and the mandating for pre-lodgement of declarations along with the planned use of ANPR or will it involve more inland customs reporting locations for discharging of Transit and filing of customs declarations? Right now companies are looking at External Temporary Storage Facilities as a way of mitigating potential delays for RoRo traffic through UK ports.

The proposed agreement annexes on specific forms of cooperation and trade facilitation will indeed make interesting reading if or when they are agreed. It should be remembered that this is contained with a commitment that “The Government will not extend the transition period provided for in the Withdrawal Agreement.”. What is perhaps concerning is that the document goes on to say that if there is no outline of an agreement which is likely to be finalised by September, then the Government “will need to decide whether the UK’s attention should move away from negotiations and focus solely on continuing domestic preparations to exit the transition period in an orderly fashion”.

If the two sides decide to continue negotiations after June then we once more face the situation where the potential uncertainty continues until September or even beyond, thus causing business to delay acting. This would be very risky, we strongly recommend that companies prepare for Brexit now, based on current known processes rather than wait until some future simplifications or facilitation is in place. If these become available later then they can still be taken advantage of, but if simplifications are not implemented at least companies can be confident they have the correct systems in place to manage their UK-EU supply chains, even if the negotiations do not give everything that is hoped for.

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Written by Martin Meacock

Director, Product Management