Trade Deals - There are 73 days to go before we leave EU.
The UK has signed an agreement in principle with Japan, marking its first major trade deal since leaving the European Union (EU).*
Following Brexit day, on 31 January 2020, the UK has been free to strike its own deals for buying and selling goods and services around the world
Yesterday evening was the first time I had seen the government advertise about leaving the EU and how people needed to become familiar with new forms for trade.
The EU Transition period ends on 31 December 2020. Kent’s position as the gateway to Europe means that the UK’s readiness for the end of the EU Transition phase relies heavily on Kent’s readiness. KCC say that they are working hard with both national and local partners to prepare for all eventualities. Their preparations for 1 January 2021 are according to them being driven by the objective to minimise disruption to local communities and to keep the county open for business. Their plans are being shaped by national planning assumptions and are as robust as they can be against a continually evolving background and working across directorates to ensure that the County Council can meet its statutory obligations and Kent’s public services can continue to be delivered. 1.3 KCC has worked closely with colleagues from the Government’s Border and Protocol Delivery Group (BPDG), Department for Transport (DfT),Her Majesty’s Revenue and Customs (HMRC) and the Department for Environment, Food and Rural Affairs (Defra), to address the potential issues that could be realised as a result of congestion caused by delays across the ‘Short Straits’.
By the way, the ‘Short Straits’ is the Dover crossing which will be likely to be the crossing worst hit with estimates suggesting that up to 60% of current flow will face significant disruption on day one, rising to up to 70% within 3 months. This is expected to impact on the supply of goods currently being imported and exported through the Dover Straits, including food and medicine. According to at least one newspaper report* the ability to export food could face severe constraints through a combination of prohibitive tariffs, regulatory burdens and logistical barriers. This could include tariffs up to 50 % for lamb exports, of which around 95% of all UK exports go to the EU, along with the prospect of markets for Scottish seed potatoes being completely closed off.
Scotland’s £117 billion service industry, including financial services largely based in Edinburgh would face significant disruption and barriers to trade with £5bn of service exports to the EU. Scotland would be seen as a third-country service provider under a no deal departure meaning for example that UK professionals’ qualifications would no longer automatically be recognised in member states. According to another newspaper report, 3 days ago, the Chambers of Commerce said that a UK – EU deal is critically important. ***
So let’s take a look at what Kent is doing….
Local Resilience and Preparedness 2.1 The Kent Resilience Forum (KRF) and government departments continue to work together to ensure contingency plans are in place to manage and mitigate any disruption to local residents, communities and businesses. The Coronavirus pandemic and the Government’s acquisition of a new site at Sevington in Ashford has led to significant changes being incorporated. 2.2 A single Command and Control structure to manage both the ongoing response to the Coronavirus pandemic and the response to the end of the EU Transition period has been agreed. Kent Police, Kent Fire & Rescue and Kent County Council share the strategic lead for this structure, each providing a strategic commander. In addition to this, preparations continue for the management of any potential winter related emergencies such as heavy snow or winter flooding. 2.3 A multi-partner (including participation by Government departments) exercise, Exercise Lundy III, was held in September 2020 using an innovative combination of a small number of partners physically gathered in a COVID-19 secure environment alongside a remote platform so that over 90 other partners could learn and contribute. This exercise incorporated learning from previous exercises and experience and identified priority areas to be addressed going forward. Further training and exercising for specific aspects of the plans is scheduled for October and November. 2.4 As well as preparing for the potential impact of the end of the transition period in January, preparations are also underway to manage the timetable for the introduction of import checks from 1 July 2021.
On 23 September 2020, the Chancellor of the Duchy of Lancaster, Michael Gove, gave a statement to the House of Commons outlining the Reasonable Worst Case Scenario (RWCS) planning assumptions for the ‘Short Straits’ at the end of the EU Transition period. The assumption is that from 1 January 2021, 30-50% of trucks traveling via Port of Dover and Eurotunnel might not be ready for new border requirements, when taking into account empty trucks that will not have the same border requirements. This could reduce flow across the Channel crossings to 60-80% of normal levels, and lead to queues of up to 7,000 trucks in Kent.
It is recognised that trader readiness is key to avoiding significant congestion and that levels of readiness are not currently where Government had hoped they would be. The Government has a programme of business and trader readiness activity – including direct e-mail contact with over 200,000 VAT registered businesses, phone contact with 10,000 EU-only high value traders (who account for 92% of the value of EU trade), one-to-one follow up interventions with unready traders, a programme of webinars aimed at both UK and EU traders, and targeted action on key sectors. 3.3 The Government has published the document ‘The Border with the European Union: Importing and Exporting Goods’. This sets out the core model that all importers and exporters will need to follow from January 2021 and will be updated on an ongoing basis. 3.4 The Government has developed a haulier communications campaign which will start in October 2020. This will include direct messaging to the haulage sector. In addition, from November 2020, 45 Information and Advice sites will be launched. These will be used to raise awareness of the new border requirements and the ‘Check that an HGV is ready to cross the Border’ service. In advance of Transition, these sites will be used to raise awareness and train hauliers on the use of the system. From January 2021, these sites will pivot to delivering advisory border readiness checks and re-routing unready hauliers who cannot make their loads ‘border-ready’. In parallel, Government is continuing to deliver their haulier outreach programme to UK and EU hauliers at events, exhibitions and via targeted webinars and industrialised led events. The Kent Access Permit 3.5 The Government is clear that it wants to deter unready trucks from entering Kent. In essence, the Government does not want hauliers to attempt to cross the Short Straits if traders have not completed the necessary EU formalities toensure their goods can successfully cross the border. Automating readiness is a key plank of the Government’s plans. The Government is developing a digital service – ‘Check that an HGV is ready to cross the Border’ (previously known as ‘Smart Freight Service’) – that will help to automate the process of establishing the border-readiness of an HGV.
The Government expects this service to beoperational for January and it will be mandatory for freight using the Short Straits. The service will be staged: a) An HGV driver or haulier will use a web portal to answer questions about whether they have the correct documentation needed to cross the border. b) If the HGV driver/haulier has declared that they have the correct documentation, and they intend to cross the border via Port of Dover or Eurotunnel, the web portal will issue them with a Kent Access Permit (KAP) and instruct them to proceed on their journey. If the HGV driver/haulier does not have the correct documentation, the web portal will instruct them not to proceed with their journey and will provide guidance on how they can become border ready.
Department for Transport will define through the Statutory Instrument process the roads in Kent which freight access will be conditional on having a KAP (which will reflect the traffic management plan). The KAP is issued digitally from the Government’s new online system to an HGV, based on self-declared information regarding whether the driver has all the documentation they need to take goods across the Short Straits. d) On arrival in Kent, enforcement agencies can use an operator app to scan a vehicle registration number (VRN) to determine whether an HGV is border ready and has been issued with a KAP. e) If an HGV is using the conditional roads in Kent without a permit, enforcement agencies can fine the driver up to £300.
Finally, when UK was an EU member it was automatically part of around 40 trade deals which the EU had struck with more than 70 countries. In 2018, these deals represented about 11% of total UK trade.
So far, 19 of these existing deals , covering 50 countries or territories, have been rolled over and will start on 1 January 2021. This represents about 8% of total UK trade, based on 2018 figures.
Any existing EU agreement that is not rolled over will cease on 31 December and future trade will take place on WTO terms until a deal is reached.
The UK government is also holding trade talks with countries that do not currently have EU trade deals: the US, Australia and New Zealand.