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Brexit Central: Leaving the EU’s customs union could make us the world leader in effective trade

Date: 18 04 2017

Leaving the EU’s customs union could make us the world leader in effective trade

After losing the argument on the single market, hard line Remain campaigners quickly turned their efforts to the notion that if Britain leaves the customs union, there would be gridlock at our ports and GDP would suffer a huge fall.

As with most of the claims developed by “Continuity Remainers” and delivered by the broadcast media led by the BBC, this apocalyptic prediction is complete nonsense and demonstrates that they have little knowledge of how customs procedures actually work.

The new Leave Means Leave report, Brexit and a Future UK Customs System: A Blueprint for Frictionless Trade, launched at the weekend, tears apart the myth that Dover will be clogged up when Britain leaves the customs union.

There has been so much focus on what a trade deal with the EU looks like after Britain leaves the single market that much of the mainstream media have completely ignored the fact that businesses are far more concerned about customs clearance procedures within the UK and at the border with other countries than about any potential future tariffs with the EU. The establishment of these administrative procedures is far more important than the negotiation of a EU free trade arrangement of marginal significance and something that the Government should be focusing on now.

The report sets out how Britain’s exit from the customs union is not a catastrophe, but a huge opportunity for Britain to become a more effective force for trade when we leave the European Union. Exit fits very well with a vision for a post-Brexit Britain as a truly enterprise economy and a free-trading nation.

If customs procedures are to continue as smoothly as possible, the Government must ensure that relevant procedures are in place in advance of Britain’s formal exit from the EU.

A vital part of future customs clearance lies in utilising technology to create a frictionless, virtual border to ensure that trade can continue without undue obstacles. This will enable vehicles to pass through ports at ease. In addition to technology, if necessary, physical inspections could take place at a roadside station that would decrease the administrative burden, both on the exporter and on customs controls. Any customs duties could be dealt with in a similar manner to VAT where return and payments are made in arrears.

To remove the need for UK customs clearance on goods which will be processed and then shipped outside the UK, the report recommends creating an Export Processing Zone which would serve as a Free Trade Zone or free port.

The report recommends allowing businesses with Authorised Economic Operators (AEO) status to complete self-assessment on customs duties and other import charges themselves, which would support the virtual border concept and work to speed up the current customs declaration process. Customs clearance outside of the UK can often be time consuming, particularly for traders who have not got AEO status. To tackle this issue, the report recommends a trusted third party such as the Chambers of Commerce overseeing a new Trusted Trader accreditation process. This would relieve a significant strain on businesses – particularly on SMEs.

The report also proposes a new UK Customs Code to change several elements of the existing Union Customs Code. This would help to simplify cross-border business for UK firms, lower costs, reduce regulatory burdens and support businesses.

Britain is in a very positive position with regards to the customs union. With robust and long-standing systems in place for aspects such as export documentation, as well as the opportunity to streamline customs procedures on our own terms, the Government can immediately implement several procedures to facilitate our trade with the EU and the rest of the world.

There is also an opportunity to think about the position of Northern Ireland in respect of Free Trade Zone or Free Port status in order to deal with border trade issues and boost the Northern Ireland economy.

Pessimism and negativity from the continuity Remain campaign should be ignored. As the Leave Means Leave report sets out: leaving the customs union is a huge opportunity for Britain to address existing issues with customs clearance and become the world leader in effective trade.

April 17th, 2017: Brexit Central