Richard Price, Fruit Marketing
Brexit deal done – what it means for traders and e-commerce
With the deal agreed, this week we look at its key points and consider some implications and immediate considerations for traders. There’s also a section providing useful sources of information.
The “Trade & Cooperation Agreement” has been hailed as a good thing. With no tariffs or quotas on most goods, it is better than no-deal – and it’s something that provides a basis for future negotiations.
But unlike most deals, it makes trading with the EU more difficult, rather than easier. Control of borders means more red-tape for traders and transporters. And with little time to make final preparations some disruption is likely in the short term.
Significantly, the deal applies to goods only (approx. 20% of the UK economy) with nothing yet clear on services (80% and growing). So, amongst other things, E commerce businesses will need further clarity on future approaches to regulations on data-transfer, financial services, and on mutual recognition of professional qualifications.
Apart from fishing, the other two outstanding areas resolved were “the level playing field” and “dispute resolution”. These two are intertwined and could remain issues for years to come. The level playing field agrees that an independent body can judge whether diverging regulations/standards are significant enough to allow either side to respond to protect their interests This triggers the dispute mechanism where tariffs or quotas can be applied – so-called ‘re-balancing’. This is stricter than in other recent EU trade deals and means that the threat of tariffs will be an on-going feature of the relationship.
Here’s more information on some of the key issues.
Cross border transport of goods
You will need to complete customs declarations for exports to EU countries, and there will be a phased approach (January to July 2021) for imports from the EU to the UK. If you don’t have the resources to do this in-house (most don’t) then appoint a customs agent, freight forwarder or fast parcel operator as soon as possible.
It’s estimated there’ll be a five-fold increase in declarations so this specialist resource may be in short supply! For help in this regard, have a look at the following links. https://www.chambercustoms.co.uk/
You’ll need a GB EORI (Economic Operation Recognition Identification) number to move goods to or from the UK, and if undertaking any EU customs processes, you’ll also need an EU EORI. You’ll need to know the commodity code or category of your goods and you’ll need licences and/or proof of origin for certain categories. See here for more https://www.gov.uk/export-goods
Travel to the EU on business is visa free for stays of up to 90 days in any 180-day period. You’ll need at least 6 months on your passport and adequate travel insurance to cover healthcare. Your EHIC card is valid until it expires, and the UK government advises a new global card or GHIC will be confirmed soon (no details as yet though). There’s no need for an international driving permit if you have a UK licence card, but you will need a green card to evidence adequate motor insurance. Personal and business travel to Ireland remains unaffected by Brexit.
Published by the International Chamber of Commerce in many languages, these are a common set of rules/guidelines aimed to facilitate trade by clarifying contractual obligations for international trade partners. Typical examples of Incoterms rules for any mode of transport include Delivered at Terminal (DAT), Delivered Duty Paid (DDP), and Ex Works (EXW).
The UK government is waiting (and hoping) that the EU will recognise UK data laws as equivalent to its own. There is an interim period of grace which allows data exchange to continue as it did before Brexit, but as yet there’s no further agreement.
Of course, high standards of personal data processing and privacy are key to maintaining trust in the digital economy. As yet there’s no guarantee on which data protection rules will apply to UK businesses processing data from the EU, and vice versa.
So far, the EU has not confirmed it will recognise UK regulations for financial services as equivalent to its own. There’s hope on both sides that agreement can be reached but, in the meantime, traders who export services may have to apply to specific countries to operate there.
At present, UK professional qualifications are no longer automatically recognised in the EU as they used to be. So, whether you’re an engineer, therapist or lawyer you may now find it harder to supply your service across the EU. Indeed, you may need to apply to individual countries to check if your qualification is recognised.
Useful sources of further information
There are a number of sources of additional information and help for those who need it. As well as E-Channel, these include government, chambers of commerce, Road Haulage Association, channel ports, BBC, Royal Mail and more. See below.