UK announces ‘innovative’ customs ‘partnership’ for post-Brexit trade, SMMT wants interim single market access

The SMMT and Freight Transport Association (FTA) have largely welcomed the first landmark UK policy paper outlining Britain’s Brexit negotiating strategy with the EU, which involves a proposal for an ‘innovative and untested’ new UK-EU customs ‘partnership’, which would avoid customs checks and enable ‘frictionless’ trade. This would involve importers from outside the UK and EU paying whichever tariff out of the UK or EU is higher, and then reclaiming the difference if the goods are sold in the region with the lower tariff. The plan also includes a transition period where UK customs arrangements remain equivalent to that of the EU; the SMMT, however, continues to call for full single market access during this period.

Customs arrangements are particularly crucial for the automotive industry, due to Rules of Origin requirements as well as ‘just in time’ production lines – and low margins that have little room for flexibility.

However, the SMMT warns that maintaining the substance of customs arrangements will not be enough, and that single market access is also essential for a smooth transition period. Hawes says:

‘To maintain frictionless trade and ensure business only has to adjust to one change, interim arrangements must retain membership of a customs union with the EU and full participation in the single market. Any other arrangement risks additional administration, delays and costs, undermining the competitiveness of UK exporters and increasing the costs of imports. We will continue to work with government to try and avoid such an outcome.’

The FTA, whose members operate half the UK fleet with more than 220,000 goods vehicles, was fully positive of the plans, but called for experts to play a greater role in negotiations to achieve the best deal.

Read more: Autovista Group