UK proposes interim EU customs arrangement to allow negotiation of trade deals

Brexit and UK services industry
By David Wood, Senior Policy Director, Policy Leadership at ICAS

16 August 2017

On 15 August the UK Government published a paper on the UK/EU customs relationship.  

How the UK will trade with the EU

The paper on future customs arrangements:

  • seeks the freest and most frictionless trade in goods possible between the UK and the EU whilst allowing the UK to forge new trade relationships with partners in Europe and around the world;
  • proposes a transitional UK/EU Customs Union mirroring the current EU arrangements while a new set of unique UK/EU arrangements are negotiated and implemented.  The objective is to provide greater certainty in the short term and avoid a “cliff edge” for UK and EU businesses in March 2019;
  • for the longer term, proposes to replicate as much as possible of the existing EU Customs Union but with the UK free to set up trade relations with others – which will be “compatible” with the new UK/EU arrangements.  This would be achieved through:
    • simplified and streamlined customs arrangement between the UK and EU, through reducing or removing barriers to trade and implementing easy to use technology-based customs procedures; or
    • a new customs partnership with the EU where the UK’s approach is aligned with the EU so as to avoid the need for a UK-EU customs border;
  • concedes that while interim arrangements are in place no new trade deals with others will be struck, though the UK will carry on negotiations to get the new arrangements on the “shelf” so they are ready to be agreed when new longer-term arrangements are in place;
  • sets out a backstop position of getting ready for a worst case outcome of no transition or longer term deal though this is clearly not the preferred option;
  • sets out the desire to avoid a “hard border” between Ireland and Northern Ireland, which is further expanded upon in the UK Government’s position paper “Northern Ireland and Ireland”;
  • notes that, whilst customs is a reserved matter, the UK Government is committed to working with the devolved administrations in relation to the practical impact of new customs arrangements in the different parts of the UK.
  • simplified and streamlined customs arrangement between the UK and EU, through reducing or removing barriers to trade and implementing easy to use technology-based customs procedures; or
  • a new customs partnership with the EU where the UK’s approach is aligned with the EU so as to avoid the need for a UK-EU customs border;

Government looking for input

The Government is seeking views on the paper, and will publish a White Paper ahead of a Customs Bill in the Autumn of 2017.

This paper focuses on trade in goods only, it is hoped that the Government will shortly set out its plans in relation to the provision of cross-border services.  

ICAS has been working with the Professional Business Services Council to provide relevant information to Government on the importance of professional services.

This is the first of a series of papers on Brexit. These papers will:

  • set out the Government’s thinking on possible UK positions and its preferred way forward; and
  • discuss possible negotiating positions to share information within the UK and seek views.

ICAS will wish to comment on some of the papers within our areas of experience and expertise, and we will call for input from members on such papers, through CA Today.

Topics

  • Political landscape
  • Business
  • Brexit

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