Five Urgent Issues at the Top of the New Prime Minister’s In-Tray

9th August 2022

The arrival of the summer recess marks a respite period for many, other than Conservative Party leadership candidates and members, from an intense period of policymaking affecting trade.

As a new Prime Minister takes office on 6th September, the in-tray on international trade issues will be daunting…

Firstly, the prospect of a fully-fledged trade dispute between the UK and the EU is drawing ever closer. The Northern Ireland Protocol Bill completed its Commons stages this week and was introduced into the House of Lords yesterday. This provides UK Ministers with the legal powers, domestically, to over-write the Protocol and introduce check free, friction free movements of goods East-to-West and West-to-East across the Irish Sea for Great Britain and Northern Ireland. The European Commission is expected to launch new legal proceedings against the UK Government within days for alleged breaches of the Withdrawal Agreement. Should the Bill become law – a prospect still many months away - the EU is expected to respond with further actions including safeguard measures (tariffs) on selected UK exports to the EU whilst the whole matter is resolved by the dispute resolution machinery in the Withdrawal Agreement and Trade and Co-operation Agreement. The BCC is prioritising a negotiated solution, but potentially affected companies should be taking advice now to mitigate their exposure to new costs on exporting goods to the EU, should matters worsen.

Secondly, the UK Government launched its consultation document yesterday on a Single Trade Window (STW) which is designed to be rolled out from December 2023 as part of the new Target Operating Model (TOM). This will incorporate border control processes for goods entering GB from the EU and the rest of the world, including those inbound measures which were deferred from entering into force in the latter half of 2022 (requirements for safety and security certificates, export health certificates, and documentary, identity, and physical checks on products of animal origin and plant products). In time, the STW is designed to provide a single user portal for a range of border and customs processes and greater efficiency in holding times for goods. A range of other countries are also progressing their Single Customs Window plans too, including the EU.

Thirdly, an autumn campaign on preference utilisation rates among SMEs is being prepared for roll out. The BCC is involved in discussions with the UK Government about outputs and delivery of this, following our research findings from members that awareness and ways to use new trade agreements, being made by the UK with other trading partners, was very low. The aim is to increase volumes of exports and numbers of companies exporting. Initially five markets will be prioritised: Australia, New Zealand, Singapore, Japan, and Norway. The Australia and New Zealand free trade agreements are expected to be ratified later in the autumn and take effect early next year after legislation at Westminster on procurement and amendments to the tariff schedule are passed.

Fourthly, an intensive series of negotiating rounds will be required to complete some and progress other key trade negotiations. Negotiations with India are expected to be completed in time for 24 October – the BCC has had sight of some negotiating drafts in key areas. Canada negotiations for a bespoke trade agreement are expected to conclude by the end of the year to tie-in with UK accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Negotiations with the Gulf Co-operation Council, Mexico and Israel are getting underway but may not finish into 2023.

Fifthly, delivering an export strategy which provides a pathway to stronger export-led growth will be key this year. The Office for Budget Responsibility forecast in last autumn’s budget that export growth would be between 8-9% this year. Trade data from the first half of this year puts UK export performance short of that growth trajectory. The BCC is putting plans to DIT to remedy that and boost export volumes.

So, a busy autumn ahead, as well as unpredictable events such as the impact of the war in Ukraine on supply chains. Keep in touch with the Sheffield International Trade Centre. Together with the BCC, we will guide you through this uncertain period and reach together better times ahead.

Please be mindful that Customs Compliance is becoming a very hot topic. The STW is based on compliant companies and trusted trader status. If you are unsure of what compliance to customs procedures means, the importance of 100% compliant customs declarations, the consequences of non-compliance, or if any of the above is raising question, please do not hesitate to contact Nick Patrick nick.patrick@scci.org.uk or Yulia Briscoe Yulia.briscoe@scci.org.uk at the Sheffield International Trade Centre.

Written by William Bain. Head of Trade Policy. The British Chamber of Commerce and Nick Patrick, Head of the Sheffield International Trade Centre


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