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American Shipper

Industry seeks ‘frictionless’ post-Brexit customs environment

A group of 14 trade associations is calling on United Kingdom and European Union negotiators to ensure a seamless customs transition period once the U.K. officially exits the EU in March 2019.

   In the run-up to the European Union summit being held in Brussels today and tomorrow, a group of 14 trade associations stressed in a joint statement Wednesday that a Brexit transitional period must be quickly agreed upon in order to protect competitiveness in both the EU and United Kingdom, and to ensure a “frictionless” customs and trade environment going forward.
   The trade associations that issued the statement include the British Chambers of Commerce EU and Belgium, Community of European Railways, European Association for Forwarding, Transport, Logistics and Customs Services, European Association of Automotive Suppliers, DigitalEurope, European Community Association of Ship Brokers and Agents, Association of European Vehicle Logistics, European Shippers Council, EurTradeNet, Freight Transport Association, Global Shippers Forum, International Road Transport Union, Spirits Europe and World Shipping Council. 
   According to the group, the biggest concern for British and EU companies, most of which have highly integrated supply chains and transportation networks on both sides of the English Channel, is to avoid a so-called “big bang” or “cliff edge” scenario during the transitional period following the U.K.’s exit from the union.
   The trade associations strongly urged EU and U.K. negotiators to put legal certainty and predictability for business and trade at the top of their negotiating agenda, adding that negotiators should not lose site of the damage that will be inflicted if business and economic activities are not protected.
   The United Kingdom is on course to leave the European Union at the end of March 2019. In a referendum on June 23, 2016, 51.9 percent of the participating U.K. electorate voted to leave the European Union, while 48.1 percent voted to remain. Turnout in the referendum was 72.2 percent, according to the U.K.’s Electoral Commission.
   In preparations for Brexit, the group of trade associations said that its “priority for customs is the guarantee of a seamless transition period after March 2019, which replicates the current commercial, regulatory and trading environment.
   “The transition period should last until the commencement of a long-term EU-U.K. partnership agreement, the details of which must be known sufficiently in advance for businesses to adapt and implement any changes,” it added. “That agreement must promote an economic and trading relationship that maintains and improves the mutually beneficial ties between the EU 27 and the U.K.”
   The World Shipping Council (WSC), which represents the global container carriers, pointed out that there are a significant number of regulatory details associated with cargo movement in Europe that determine how information flows and how the related processes take place. These include “what, how and by whom information is transmitted” for advance cargo risk assessment (similar to the U.S. 24-hour rule), how the cargo is processed at discharge, and how the cargo is declared for a customs procedure such as importation. 

   “There are processes in place today that are well understood, and those need to be maintained in order to have a smooth transition period after March 2019,” WSC said. “Also, carriers and all supply chain partners need certainty about what the rules will be in the future. For example, will the U.K. after Brexit have the same advance cargo risk assessment process as the rest of the EU, or something else?”
   The European wine and spirits industries – including spiritsEUROPE, along with the Comité Européen des Entreprises Vins, the Scotch Whisky Association and the U.K.’s Wine and Spirit Trade Association (WTSA) – also sent a joint position paper to Brexit negotiators, calling for minimal disruption of trade flows and stressing the need for a transitional period.
   They stressed how there are historic and economically significant wine and spirit trade flows between the EU and U.K., and for the continued success of EU and U.K. businesses, it is vital that this trade is maintained after Brexit with minimum disturbance. According to the group, each year 2.3 billion euros ($2.7 billion) of U.K. wine and spirits products go to the EU 27, while 2.9 billion euros ($3.1 billion) of European wine and spirits go to the U.K. And in terms of strictly wine imports, the U.K. is the world’s second largest importer of wine by volumes and value.
   In the joint position paper, the wine and spirits associations said a comprehensive customs agreement needs to be reached to avoid border tariffs, processing delays, possible conformity assessments, and related administration costs.
   “Wine and spirit businesses on both sides of the channel unanimously agree that politicians need to provide clarity to ensure businesses have time to adapt to Brexit, including agreeing to a comprehensive customs agreement to avoid the imposition of tariffs where they currently do not exist and to minimize disruption to historic trade flows,” WTSA CEO Miles Beale said in a statement.
   With regard to the EU summit, leaders will look at a number of the European Union’s most pressing issues, including migration, defense, foreign affairs and digitalization, the European Council said on its website.
   However, commenting on Brexit, European Council head Donald Tusk told a news conference Wednesday, “I don’t expect any kind of breakthrough tomorrow,” according to a report from Reuters. He did say, however, that closing the first phase of talks – on a financial settlement, citizens’ rights and Northern Ireland – was possible by December if Britain makes some concrete proposals.

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