Brexit free-trade paper met with mixed response

By Gwen Ridler contact

- Last updated on GMT

The Government’s Brexit white paper was published on Thursday (12 July)
The Government’s Brexit white paper was published on Thursday (12 July)
The UK Government’s white paper, proposing a free-trade area for goods to create frictionless trade post-Brexit, has been met with mixed responses from across the food and drink industry.

The Food and Drink Federation’s chief executive Ian Wright said the Government was right to make frictionless trade with the EU a priority, but questioned how a common rulebook would work in practice.

“Businesses and consumers urgently need clarity and confidence in the process for both following and deviating from EU rules,” ​said Wright.

“It is welcome that the UK will seek to participate and influence EU technical committees and have access to RASFF, but many questions still remain around our valued relationship with the European Food Safety Authority. The devil is in the detail.”

The white paper has also suggested a system of trusted traders, also known as authorised economic operators (AEOs) in Europe, whereby businesses demonstrate that they have both the policies and physical arrangements required to guarantee that goods have been transported securely and are properly accounted for. 

According to the paper: “Where a good reaches the UK border, and the destination can be robustly demonstrated by a trusted trader, it will pay the UK tariff if it is destined for the UK and the EU tariff if it is destined for the EU.”

Meeting customs obligations

Malcolm Dowden, legal director at law firm Womble Bond Dickinson, pointed out that to qualify for AEO status, businesses would have to show at least three years’ experience of meeting customs obligations. Dickinson said that test could not be met by about 131,000 businesses, according to Her Majesty’s Revenues and Customs estimates.

Furthermore, securing trusted trader status for a company could be a long and drawn out process, which could take up to two years to complete.

“The government's white paper cannot guarantee that AEO status granted in the UK would be recognised by the EU,”​ added Dowden. “Consequently, it merely expresses the hope that the UK will be able to "agree mutual recognition of AEOs.

“In the event of a ‘no deal’ Brexit, or of a deal that did not include mutual recognition, the trusted trader concept that underpins the white paper suggestions would not provide frictionless trade.”

The Freight Transport Association (FTA) reacted positively to the contents of the white paper, but warned for the solutions outlined to work there would need to be a “similar level of imagination and optimism for the UK’s European trading partners”.

Several areas of concern

FTA’s deputy chief executive James Hookham pointed out several areas of concern which still needed urgent attention, should trading between the UK and the EU were to continue without minimal disruption.

 “Of most concern is a lack of clarity over how road transport will be able to operate in the future,”​ said Hookham. “A permits system is mentioned in passing, but is really not an option if the thousands of vehicle movements which currently happen to and from the Continent and Ireland are to continue with minimal delays.

“The paper needs to provide more clarity on the status of skilled EU workers after Brexit – with more than 45,000 heavy good vehicle drivers from Europe currently working in the UK, loss of their working status would leave the industry severely exposed.”

The UK Warehousing Association’s chief executive Peter Ward said he was “pleased”​ that the Prime Minister was “living in the real world”​ and had listened to the needs of the business community.

‘Avert any major upheaval’

“Since the referendum result was announced more than two years ago, UKWA has stressed the need to retain frictionless trade with the EU and it appears from today’s document that the Government is attempting to avert any major upheaval in the way goods are traded between the EU and the UK,”​ Ward added.

“It remains to be seen however, whether this white paper is a fanciful wish list aimed primarily at uniting a divided government – that will gain firstly the wider support of parliament, the country, and ultimately Brussels – or whether indeed it is purely a starting point for negotiation.”

The National Office of Animal Health (NOAH) welcomed the Government’s blueprint for UK relations with the EU and proposed regulatory alignment in industrial goods and agricultural products.

NOAH chief executive Dawn Howard said: “We have previously supported the proposal for a close working relationship, even associate membership, of the European Medicines Agency.

“In addition, the recognition of the importance of our manufacturing sector and bespoke provisions for animal medicines, reflecting their unique status is good news for the future supply of animal health products, animal welfare and food security in the UK.”

Related topics: Legal, Supply Chain

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