14 March 2017

EU External Affairs Sub-Committee: Customs admin and delays a serious concern for firms after Brexit

Lords said a UK-EU trade deal must avoid the imposition of tariffs on trade in both directions and that the Government must try to agree a transitional arrangement with the EU since the two-year deadline for an agreement might be too ambitious and therefore it'll be very difficult to be met.

Key findings

• The manufacturing and primary commodities sectors are important employers, particularly outside the South East of England, and goods make up the bulk of the UK’s trade. Ensuring that these industries do not face additional barriers to trade will be essential to driving growth across the UK, as envisaged in the Government’s industrial strategy.
• The manufacturing and primary commodities sectors are integrated into efficient EU-wide supply chains. Supplies and components may cross the Channel multiple times during production, and tariffs on UK-EU trade in goods could be imposed every time, increasing costs. Many UK businesses cannot easily substitute their imports from the EU, or find alternative export destinations.
• Leaving the EU customs union would be likely to result in a significant additional administrative burden for companies and delays to consignments of goods, incurring additional costs. The customs agreement proposed by the Prime Minister would be unprecedented and it is unclear whether it will be possible outside a formal customs union.
• There may be significant benefits in the UK continuing to participate, where possible, in EU agencies such as the European Medicines Agency and the European Aviation Safety Agency. The Government should clarify whether it would accept being subject to some form of oversight and dispute resolution to so do.
• The Government should give serious consideration to a transitional agreement, as it begins its negotiations.

• Report: Brexit: trade in goods

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