We’d like to advise the UK’s EU traders to brace themselves as fears of leaving the EU without a withdrawal agreement could lead to a period of disruption, delay, and confusion when it comes to importing and exporting.
The UK and EU leaders are trying to abstain from Ireland returning to a physical border, the dispute over this is just one of the many reasons we cannot reach a deal, and it is a dispute which must be concluded in order to reach a withdrawal agreement.
These differences of opinion exist not just between the UK’s PM and the EU but are echoed throughout the conservative party itself, including the cabinet.
Furthermore, a withdrawal agreement would have to be established by January 2019 for the UK to leave the bloc in time for March. Because of this, tensions are rising and time is becoming scarcer.
The government has released some technical notices which highlight the temporary turmoil a “no-deal” exit would have on EU traders. Such notices contain firm advice, urging export/import agencies to consider alternatives to road transport when forwarding goods to and from the EU.
The reason being, lorry operator licenses distributed by UK authorities which are currently issued without limit, are essentially valid across the EU member states, thanks to our membership to the European Union Single Market.
This is because operator licenses for Lorries currently issued by UK authorities, which are unlimited in number, are effectively valid across the European Union due to our EU Single Market membership. Yet, if we do leave with no deal, the road transport operators from the UK will have to seek admittance to the EU by acquiring the European Conference of Ministers of Transport Permits (ECMTP) instead.
The government have expressed concern that if a no-deal exit does take effect by March, this will leave little time to negotiate these arrangements, and it is possible that a spike in demand for these permits may exceed supply.
This is due to the number of permits the UK can presently issue equates to 5% or less of the industry’s demand.
Contrary to what we expected, the government’s technical notice made no mention of plans for freight forwarding between the UK and Republic of Ireland, in the event of a “no deal” exit.
The government’s documents also recognise that air freight and planes could be grounded if we leave without any type of deal.
Currently, with a broad scope of EU legislation, airlines registered in one member-state can operate in another without the need to acquire permission in advance of doing so, but in the case of no withdrawal agreement, this arrangement will cease to exist.
The government has said it intends to provide permission for EU flights to continue landing at British airports and expects our European partners to reciprocate, but they have not yet said they will do so. Failing that, the government says it will try to negotiate a temporary deal with the EU to keep planes flying or bilateral agreements with all European countries, but these will obviously take time to conclude.
Even if a withdrawal agreement is reached, UK businesses could be waiting many months for certainty about long-term trading arrangements with the EU. It is now almost certain that detailed talks on the future trading relationship will only reach a conclusion well into the envisaged transition period. This is currently due to end in December 2020 but there has been recent speculation that it could be extended for a few months.
In the case of a long-term trading regime being ratified, many options could include the UK: remaining in the EU’s Single Market and/or Customs Union, perhaps obtainable by joining the European Economic Area; signing a Canada-style deal of free-trade with the bloc; or by devising a unique arrangement, such as that imagined in the Prime Minister’s Chequers proposals.
It is becoming ever more apparent as we draw closer to March 29th, that there are two major systems which could rule business trading with EU counties, or at least for the time being.
First, there is the chance turbulent no-deal outcome, which will present obstacles such as delays and tariffs. The second being ‘business-as-usual’ which would be the result of a withdrawal agreement. Still, there is no certainty yet as traders and forwarders wait patiently for some kind of consensus of agreement.
Although we prefer the outcome of the latter, neither situation is strictly ideal for British traders.
Do you use Road, Air, or Sea Freight to transport your goods and products? If you would like to discuss alternatives, don’t hesitate to contact us at email@example.com