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A year since Brexit: Will new UK import controls complicate trade further?

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By Alasdair Sandford
Drivers wait with their parked-up freight trucks at the Motis freight clearance centre at the port of Dover on the south coast of England on January 15, 2021
Drivers wait with their parked-up freight trucks at the Motis freight clearance centre at the port of Dover on the south coast of England on January 15, 2021   -   Copyright  Credit: AFP

The British government has repeatedly delayed implementing many controls on EU imports required under international rules as a result of Brexit. But that is about to change in 2022 — causing an additional headache for businesses adapting to the new world.

January 1 brings new customs formalities including some checks on products entering Britain from the EU.

Other requirements will follow in stages during the year.

While the EU immediately implemented border controls last January after the Brexit transition period expired, the British government had already announced that its controls would be phased in due to the pandemic. Deadlines were pushed back again in March, and once more in September.

The delays helped EU agri-food exports to the UK remain broadly the same in the first eight months of 2021 — according to the latest EU statistics — whereas UK exports to the EU plunged by over a quarter.

Meanwhile, EU exporters are worried that the toxic state of relations between the UK and the EU — and particularly with France — may spill over into the world of commerce, threatening to damage cross-border trade still further.

More red tape, higher costs

"Dutch agriculture and horticulture has a great interest in preserving open borders with the UK; annually we export more than €8 billion worth," reads the latest Brexit bulletin from LTO Nederland, the Netherlands agricultural producers body (in Dutch). The country sends products to Britain across the board, from meat and vegetables to flowers and sugar.

The headline in LTO's report — "Brexit: No end in sight" — hints at the challenges ahead, given the imminent changes.

"In 2021, the importer across the [English] Channel only had to submit a few basic data to British customs. The importer could postpone the effective customs declaration for up to six months under certain conditions. That will end on January 1," it says.

On documentation requirements, the farmers' body goes on to warn exporters of the need to register in advance with UK systems, some of which "unfortunately leads to a lot of bureaucracy".

From the new year, customs declarations can no longer be deferred. Pre-notification of agri-food imports will also be required. From July 1, health certificates will be needed and physical checks on food products will take place at border control posts.

"Obviously the fact that you need to carry out checks and controls, that means that this will increase the times that lorries have to wait, it will increase logistical and administrative costs for both sides," says Daniel Azevedo, director for commodities and trade at the European farmers' body Copa-Cogeca.

He told Euronews that the European Commission has been holding regular meetings with member states and operators, as well as liaising with their UK counterparts to ensure traders are ready.

FoodDrinkEurope, representing food and drink manufacturers in the EU, says the new requirements are "complicating the logistics of deeply integrated supply chains".

"There is also inherent uncertainty around the UK’s plans because of the repeated delays to their introduction and many businesses are naturally sceptical that the situation could change again," their spokesperson told Euronews.

"The lateness of these details is particularly challenging as the details will need to be translated and communicated to producers and hauliers at the busiest time of the year for many of them."

The trade body expressed concerns over "groupage" movements -- where several exporters send goods in one lorry -- could cause problems as incorrect paperwork "is likely to delay everything on the truck entering the UK".

It also highlighted the challenge for small and medium-sized businesses (SMEs) in particular, "that only trade within the EU" and will "need to quickly become accustomed" to the new requirements.

UK-EU rows 'could impact trade'

There are fears among EU exporters that the poor state of UK-EU relations will do nothing to help smooth the transition and could make things worse. In the months since Brexit took effect, London and Brussels have clashed repeatedly over issues ranging from trade in Northern Ireland to coronavirus vaccines.

"The deadlines are regularly shifting and the ongoing disagreements between the United Kingdom and the European Union can still lead to major accidents. In other words: damage to trade between the two," LTO Nederland says, citing deadlock over a post-Brexit ban on EU-UK trade in seed potatoes.

In France too, there are fears that the recent antagonism between London and Paris may have a negative impact on trade. Post-Brexit tensions have blown up into full diplomatic rows, notably over fishing licences and migrants crossing the English Channel.

Askorn is a small firm specialising in artificial body parts and surgical equipment, based near Rennes in Brittany. Supplies to UK hospitals are worth 20% of its business.

In 2020, as deadlocked negotiations between London and Brussels raised the prospect of a "no-deal" outcome on trade in the run-up to the end of the transition period, the company planned ahead.

It decided to open a branch in the UK, to keep trade as frictionless as possible. UK customers order directly from the British subsidiary rather than from France. Cross-channel deliveries are concentrated into fewer, larger consignments than before Brexit.

Manager Denis Pichon says the new arrangements have worked well "in 98% of cases". But a couple of recent events — he describes them as a "hiccup" — have given him pause for thought.

"We had a very few problems shipping additional not in bulk of our shipments, but when we needed to ship additional goods to the UK, in two instances we had our parcels refused and sent back to Brittany. To be honest, we don't know exactly the reasons this happened," he told Euronews.

The timing of the two refusals — the first in September, another in October — came as already fraught relations between the British and French governments boiled over.

"I hope that our politicians will work together to find good solutions and stop bickering with each other... I don't know whether they were linked or not, but it surprised me that for the first six months of Brexit we never had an issue... and the small issues came at a time when they were fighting against each other, and I do hope it was not linked," Pichon says.

Laurent Kerlir, a dairy farmer based in southern Brittany, also fears that the cross-Channel political stand-off could exacerbate the challenges posed by new trading requirements.

He is preparing for the new sanitary checks due to be imposed on exports to Britain during 2022. The local industry has already lost business due to Brexit.

"Right now it's a bit early to tell what effect they (the checks) will have. Unfortunately, we detect a certain tension between France and Britain on several issues. We hope that won't have too much of an impact... we hope they'll concentrate on talking and they won't get stuck in a way which aggravates problems," he told Euronews.

"It's a perception we have, but we're worried about these tensions that are rising between France and England and which could have repercussions on trade between our two countries."

'No.1 export market'

The UK National Farmers' Union (NFU) said in September that the repeated delays to post-Brexit import controls had given EU exporters a competitive advantage, allowing them to "maintain access to the UK market relatively burden-free".

It was "crucial to have a level playing field", the NFU argued, calling for "this asymmetric border control issue to be sorted out and for more notice to be given for any changes to delays".

"Delay only postpones the inevitable disruption that full import checks means for the UK’s trade with the EU," Joe Marshall of the Institute for Government wrote at the time. Neither EU exporters nor the British government seemed prepared, he added.

Two and a half months later, a survey by the Federation of Small Businesses early in December found that three-quarters of British firms were still not ready for the new import controls.

Further delay may not be a practical option. As the Institute for Government points out, this would only prolong uncertainty, and — in failing to impose checks — it is unclear "how long the government can continue to treat EU imports more preferably than those from the rest of the world".

The UK is reportedly due to begin trials of new digital border technology, to reduce trade friction for importers. The EU is also working on its own scheme to make clearing goods easier, which could help British exporters into the bloc.

"Hopefully if the electronic system, the digital system in the UK when it will be implemented, border controls and checks, if it works then we do not expect a major disruption," says Daniel Azevedo of Copa-Cogeca.

FoodDrinkEurope is calling for both the EU and the UK to move towards digital export health certificates (EHCs) — "this would somewhat mitigate the administrative burden for the veterinary authorities in members states, food businesses and transport companies," it says.

In the meantime, the food and drink manufacturers body underlines how much is at stake from the forthcoming border controls.

"The UK is our no.1 export market, ahead of the US and China. The geographical closeness also means a great emphasis on just-in-time supply chains and greater proportion of shorter shelf-life produce. Thus the challenges posed by border controls are much greater and more costly."

This article is part of a five-part series looking at the impact of Brexit, one year on.