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Ministers must restart trade negotiations with Brussels immediately to resolve the “puzzling” set of post-Brexit rules and regulations that now threaten much of the UK’s export trade to the EU, major business groups have said.
Amid mounting anger among UK companies over cross-border friction that they were told would not exist, UK trade and manufacturing organizations met with Cabinet Office Minister Michael Gove on Thursday in a session of emergency to discuss the problems resulting from the agreement reached by Boris Johnson with the EU earlier. Christmas.
The prime minister had hailed what he claimed was a “zero fee” and “zero fee” agreement that would allow free and simple access to the single market. Yet less than a month later, Britain’s exit from the EU appears to be anything but painless.
A prominent figure involved in the talks with Gove described the new rule book as a “complete shit show.” Another said Gove seemed “very concerned” upon hearing reports of problems, after a week in which Marks & Spencer was among the leading companies in warning that increased red tape would increase costs. The source added: “He [Gove] He seemed to realize the seriousness of the situation that is developing and that it is about to get worse. “
Gove admitted on Friday that there would be a “significant additional disruption” at UK borders as a result of Brexit customs changes in the coming weeks.
In the first week after the UK finally left the single market and customs union, parcel company DPD suspended some of its services, Waterstones bookstore halted sales to customers in the EU and UK fishermen warned that they couldn’t sell their fresh produce. in EU markets due to border delays.
There were also problems with shipments between Great Britain and Northern Ireland, as the new border controls surprised many companies. Luxury food store Fortnum & Mason also told customers on its website: “We are temporarily unable to deliver to Northern Ireland or European Union countries,” while Debenhams has temporarily closed its online business in Ireland.
Some of the problems are attributed to a hasty agreement and others to the enormous complexity of the agreements, including “rules of origin”, some of which have not been finally determined. Only products made up largely of parts originating in the UK qualify as duty free.
Stephen Kelly, Executive Director of Northern Ireland business organization Manufacturing NI, said: “The reason the UK and the EU originally agreed that there would be an 11-month implementation period was so that people could understand what it was needed and to ensure their business was fulfilled. But we didn’t have that. We had seven days before everyone had to be ready, and one of those was on Christmas Day.
“There is a big problem with companies in Britain unaware of their new responsibilities. We have the triple blow here of Covid, Christmas and the new customs rules that arrive at once with no time to adapt. “
Johnson assured Northern Ireland business owners in November 2019 that they would have “unrestricted access” to the rest of the UK. “There will be no forms, no checks, no barriers of any kind,” he said. If someone told you they had to fill out forms, “tell them to call the PM and I’ll tell them to throw that form away.”
The government also faced pressure over its Brexit deal from the SNP. Ian Blackford, the party leader in Westminster, called on the UK government to “pay compensation to Scotland”, claiming that a “multi-million dollar compensation package” was needed to mitigate the costs of Brexit in Scotland.
Stephen Phipson, chief executive of manufacturers’ organization Make UK, said there is still a lot to negotiate between the UK and the EU. “The industry welcomed the trade agreement that averted the catastrophe of the no-deal, as tariffs and quotas would have been a disaster for exporters. However, this is just a starting point, as there are still major issues that need to be resolved, with many months, if not years, of tough negotiations ahead.
“There are customs experts with 30 years of experience who are baffled by what the new regulations mean, much less small and medium-sized businesses who have never had to deal with the kind of paperwork that is now required. The great fear is that for many it will be too much and they will simply choose not to export to the EU ”.
It also raised concerns about the UK auto industry, which could be adversely affected by tariffs if EU rules regarding the origin of components used in car manufacturing cannot be met. “Having built complex and fluid supply chains for decades, the UK automotive industry is facing a system shake that puts its future in jeopardy,” he added. “While there is no suggestion that multinationals will close plants overnight, we have already seen decisions to build new models placed elsewhere. As those models that have been built in the UK for many years reach the end of their useful lives, we are likely to see a slow puncture in the receding investment sector. “
Dominic Goudie, head of international trade at the Food and Drink Federation, said talks need to restart between the UK and Brussels.
“When problems arise, there will need to be more talks,” he said. “The trade agreement provides the means to do it. It is a question of whether there is a will to do it ”(after so many months of conversations”).
Sam Lowe, a senior fellow at the Center for European Reform, said there were problems that could increase in the coming weeks and months.
“The new import / export formalities are proving problematic for many companies. The obvious lack of queues at the border hides the fact that many trucks are trapped in warehouses, unable to go to the ports because their customers do not provide the necessary documentation and information. “
