Angus Brendan MacNeil MP: We still don’t have the trade agreements, infrastructure or support for business to cope with no deal at our seaports
4 min read
Delays at Dover are only the start - the Government has provided very little practical support to businesses that may soon need to follow significantly different processes, writes Angus Brendan MacNeil MP
The United Kingdom has a long tradition of maritime trade and this is reflected in its 50 or so major seaports. These handle around 70% of UK trade in goods, which in 2017 amounted to 481.8 million tonnes of cargo, worth £882bn.
Leaving the EU will place unique pressures on our ports, particularly in the case of no deal. No deal concerns have largely centred on EU trade and the prospect of lengthy delays at Dover turning much of Kent into a huge lorry park – but only around half the trade coming through our ports is with the EU. The rest is trade with global trading partners, such as China and the United States. One might be forgiven for thinking that trade with these countries will be unaffected by Brexit, but this could not be further from the truth.
During the 40 years that UK trade policy has been formulated by the EU, we have benefitted from numerous agreements the EU has negotiated with global trading partners around the world. Some 40 EU free trade agreements (FTAs) have lifted tariffs and other trade barriers. Numerous other agreements cover areas including customs procedures, and mutual recognition agreements which assess conformity with product standards.
Since the UK will no longer be covered by these after Brexit, the Department for International Trade has sought roll-over agreements to enable UK businesses to trade on similar terms after Brexit. So far, it has only managed this with 13 FTAs. The DIT is also yet to agree any of the Government’s 10 priority agreements on customs co-operation and granting “authorised economic operator” status to reputable bodies involved in trade. In addition, only some of the mutual recognition agreements have been replicated. This means that the established processes for trading with key non-EU partners are highly likely to change.
In March, the Government announced plans to remove tariffs on 87% of goods as an interim measure in the case of a no deal Brexit. Doing so, however, will not in and of itself prevent increased friction at UK ports in relation to trade with non-EU countries; roll-over agreements will still be needed because friction is also about regulatory checks and customs procedures.
'Ultimately, UK businesses will be the ones shouldering the burden of trade friction at UK ports in the event of no deal'
IT issues are also of considerable concern for UK ports. Delays in implementing the UK’s new system for handling duty payments and assessing customs declarations, the Customs Declaration Service (CDS), meant it would not have been ready for a no deal Brexit on 29 March. The new chancellor has urged HMRC to ensure it can “deliver a functioning [customs] regime” on 31 October; but, with just weeks to go, CDS is still not fit for purpose and we will be forced to rely on a stop-gap system.
Ultimately, UK businesses will be the ones shouldering the burden of trade friction at UK ports in the event of no deal. While large companies have the resources to work with logistics providers and freight forwarders, many small businesses lack such capabilities. The Government has published no deal trading advice, but my committee has heard that this information is difficult to use and offers little support to smaller businesses, who may not even know they are trading under EU FTAs.
We have also heard that the Government has provided very little practical support to businesses that may soon need to follow significantly different processes. If businesses do not understand how to export and import at the point of Brexit, this will cause major problems processing goods and customs declarations. Businesses may find themselves simultaneously struggling with both a new trading environment and inoperable IT systems.
To avoid chaos at UK ports, the Government must step up its no deal preparations to ensure that the lynchpins of international trade – businesses themselves – are informed and ready. A failure to do so would be irresponsible – both towards businesses and consumers.
Angus Brendan MacNeil is SNP MP for Na h-Eileanan an Iar and chair of the International Trade Committee
PoliticsHome Newsletters
Get the inside track on what MPs and Peers are talking about. Sign up to The House's morning email for the latest insight and reaction from Parliamentarians, policy-makers and organisations.
