Brexit a reality

Trade advocacy groups urge calm, clarity on rules of origin, and investment in trade agreements    British Prime Minister Theresa May on Wednesday made the official declaration that her administration will now begin exit negotiations from the European Union.
   A majority of British citizens voted to leave the European Union in June 2016, resulting in the United Kingdom becoming the first EU member to invoke so-called Article 50, the procedure for country members to leave the pact. The United Kingdom became a member of the group in 1973, which now includes 27 European countries.
   It’s estimated that it will take several years for the dissolution of the United Kingdom’s EU membership to be completed.
   “The talks will encompass a dizzying array of subjects, including trade terms, immigration rules, financial regulations and, of course, money,” the Washington Post reported.
   Industry groups, such as the British International Freight Association (BIFA), have urged calm at the outset of the country’s exit negotiations with the European Union.
   “In the run up to the U.K.’s eventual exit we will be working with government to try and ensure that the movement of the U.K.’s visible import and export trade does not become overburdened by over-complicated trade procedures,” said Robert Keen, BIFA’s director general, in a statement.
   “Clearly there are significant areas of concern for our members, which are responsible for much of the physical movement of that trade, over the eventual outcome, including the physical infrastructure, trade arrangements and Customs practices that will be reviewed as part of the Brexit negotiations.”
   Keen, however, said there should not be any rush to conclusions.
   “I have already gone on the record to warn about the huge number of pundits offering solutions when nobody really knows what is likely to happen in reality,” he added.
   BIFA said it plans to work closely with the country’s other trade groups, such as the Confederation of British Industry (CBI) and British Chambers of Commerce, to ensure the freight transportation industry’s concerns and positions are clearly presented to the British government.

Regardless of any future trade agreement between the U.K. and the EU, there will be significant changes to customs and border procedures for businesses.

   CBI has asked the country’s negotiators to press for:
   • A barrier-free relationship with the European Union, which is Britain’s largest trading partner.
   • A clear short-term regulatory plan, which is followed by long-term “balances influence, access and opportunity.”
   • A migration system which allows U.K. businesses access to skilled labor.
   • A renewed focus on global economic relationships, such as bilateral free trade agreements.
   Most importantly, CBI has requested that negotiators seek a “smooth exit from the EU, avoiding a ‘cliff-edge’ that causes disruption.”
   “Regardless of any future trade agreement between the U.K. and the EU, there will be significant changes to customs and border procedures for businesses – whether exporters or importers,” the British Chambers of Commerce said in a February report.
   There is also concern among the chambers’ members that Britain’s longtime status as a distribution hub for Europe will erode after the country’s EU exit, and whether British Customs will be able to handle the regulatory and procedural changes without additional IT and staffing support.
   The British Chambers said they support the U.K. government developing a new set of origin rules which are in line with the World Customs Organization’s 1999 Revised Kyoto Convention and other international agreements.
   “With our major manufacturers having increasingly international supply chains it is possible that well-known British products would no longer qualify as ‘Made in Britain’ if the rules of origin are not carefully drafted,” the chambers said.