So, the transition period for Brexit is over, and the deal has been agreed upon. Now that the details have been released, how will Brexit affect the trade of goods? With the trade deal described by the Prime Minister, as “a comprehensive Canada style free trade deal between the UK and the EU”, how does this relate to businesses shipping freight internationally? The EU is the UK’s biggest trading partner, with a total of £439 billion worth of freight being traded, in 2019. This breaks down to 46% of our exports and 53% worth of imports. Before the transition period ended, all of these goods were able to move freely between the UK and the EU, with little paperwork, as well as the guarantee of no tariffs or quotas. Now, we have a few more barriers, but worry not, it is all manageable We have now left the single market and customs union, leading to more barriers. A key barrier will be more checks at the border, with HMRC estimating a rise from 55 million checks on freight, to 270 million. However, there will be new customs measures to speed up the process, as well as other actions taken by the government to help mitigate problems at the border, which will be discussed later on.
What does the deal mean for businesses?
As outlined in the Trade and Cooperation Agreement (TCA), there will be no tariffs or quotas on goods being shipped to the EU, as long as the ‘rules of origin’ is provided. This means that you must prove that the product was made in the UK. Furthermore, you need to be able to provide an EORI number – which stands for Economic Operator Registration and Identification number - as well as an 8-digit product classification code. You can get help with both of these codes on the government website: https://www.gov.uk/eori - EORI number https://www.gov.uk/guidance/finding-commodity-codes-for-imports-or-exports?step-by-step-nav=849f71d1-f290-4a8e-9458-add936efefc5 – Product classification code As long as the EU and the UK play fairly it is all pretty straight forward, however the conditions are subject to change. If either side imposes unfair conditions on the other, it is possible we may see a rise in tariffs and increase non-tariff barriers, such as extra paperwork. This is known as cross-sector retaliation, and it is the right to impose extra barriers if either side believes that the split (between us and the EU) is causing a distortion in trade. This acts as a safety net, to ensure both parties commit to a level playing field. The fair play commitment will be measured by regular reviews to keep things fair and up to date. It is also worth noting that the TCA rules on trade of goods between the EU and Northern Ireland will not apply. They will follow the Protocol on Ireland and Northern Ireland, to keep the soft border between the Republic of Ireland and its counterpart.
How will the government reduce problems at the border?
The government has implemented a few measures to mitigate border problems, however, these preparations have been affected by covid-19. The measures include:
Phasing in border processes over the first 6 months of 2021 – rather than introducing them all at once.
Building more infrastructure to accommodate for the extra time at borders – for example more lorry parks around the country.
Increased capacity in the customs intermediary sector – this is where we, at Parcel Direct, step in.
How can we help?
Despite the new trade deal, we will only require your EORI and product classification code in addition to the standard details of your shipment such as weight and frequency of postage. We will then handle the rest! Shipping your parcels nationally and internationally has never been more convenient, due to our network of depots around the country and strong partnerships with industry leaders.
Contact us on 03334 567567 or use our online form to request a quote or discuss how we can help your business.