Richard North, 07/01/2021  
 


I suppose we can at least be grateful that no remainers, at the last minute, sought to interfere in the parliamentary process to prevent the "Brexit" implementing act becoming law last December, in the way that Mr Trump's supporters have stormed the Capitol building to stop Congress certifying the vote for Joe Biden.

Had the circumstances been different and parliament had sought to ignore the referendum result, we could possibly have witnessed scenes similar to those seen yesterday in Washington although, given the deferential nature of the public this side of the pond, I cannot visualise a British protester sitting in the speaker's chair.

For the moment, though, the chaos in the United States has provided yet another splendid distraction from charting the outcome of Brexit. I am, however, a little perturbed by the BBC's rendition of today's newspaper headlines, which declares: "Anarchy in the USA" and "the clap's back".

As if the Covid-19 figures were not bad enough, it seems we are also dealing with a resurgence of a particularly nasty STD – perhaps reflecting the diminishing impact of common antibiotics. Just maybe, though, the BBC meant something else, although I cannot think what.

Anyhow, despite being consigned to the inside pages – or cleared entirely from some papers, to make room for Trump's "coup" – the aftermath of Brexit continues and might even be intensifying.

Here, one particular headline caught my attention, another from the Financial Times, this one telling us that: "Brexit red tape prompts rethink on cross-Channel trade". The sub-head explains that "Deal between London and Brussels leads some UK SMEs to pause trade and others to give up on cross-border business altogether".

But the most interesting of the examples of businesses giving up the unequal struggle – or changing their trading patterns – it that of Shane Burnett, the founder of Premium Plus UK, a Bournemouth-based dental medical devices maker.

Last year he hastily opened a new subsidiary in Poland to handle his EU customers, which make up 65 percent of his client base. He says that "strict EU rules on importing medical devices" simply made it unviable to use the UK as a distribution hub for the products he imports from China. He has let four staff go in the UK as the business shifts across the Channel.

But what is especially significant is his comment that: "It would cost a fortune to do all that paperwork because now each EU customer becomes an 'importer' and that's financially unviable". He adds: "It makes much more sense to ship the whole lot into Poland in one big hit, do the customs and then distribute round the EU".

I find it difficult to read this sort of thing without an intense sense of irritation as this is the first reference in a national newspaper that I recall seeing to the crucial change that comes with the UK leaving the Single Market.

On this, I wrote at length on 1 July and again on 30 July 2019, touching on it before and since. But it was on my 30 July piece that I wrote:
Perhaps of greatest significance, no business will be able to prepare for the major change in status that comes with us leaving the Single Market. Whereas a UK enterprise can at the moment ship goods to EU Member States without formalities, after Brexit they will find that their goods come under customs supervision when they enter the EU, and can only be released for circulation by an importer, who must be an entity established (and resident) in the European Union.

This change has scarcely, if at all, been discussed in the UK but the change to requiring goods to be placed in charge of an EU-resident importer represents a major barrier to trade, and an active disincentive to EU buyers. For instance, while currently a UK exporter to the EU retains legal responsibility for standards conformity, post-Brexit the importer becomes liable, with significant cost and legal implications.
Then, specifically, I referred to the problem of customs declarations at the end of December last year, where I pointed to Article 170 (2) of the Union Custom Code which specifies that the declarant must be "established in the customs territory of the Union".

It is the "declarant" which then becomes responsible for settling any tariffs and fees and for arranging the release of the goods into free circulation within the Union, including dealing with any inspection requirements and related payments. This is no longer under the control of the exporter.

This explains entirely Shane Burnett's decision, and especially with products such as dental medical devices, which carry with them stringent regulatory provisions, requiring proof of conformity with EU standards.

Under the current regime, where the UK has been unable to secure a mutual recognition agreement on conformity assessment, if Mr Burnett was sending products direct to his EU customers, not only would each have to make their own declarations, but they would have to demonstrate regulatory conformity to the customs authorities before they were released for free circulation.

Belatedly, this was set out in detail in the UK government's Border case studies, but the complications should have been aired widely during the pre-Brexit debates, not least so that MPs had some glimmer of an idea of what they were letting us in for, in taking us out of the Single Market.

Instead, we got the idiot Johnson telling us that there would be no non-tariff barriers, while one shipper is currently reporting that UK consigners are still not "clued up" to the requirements. This is Tonga Freight which says that it has imported only about five percent of normal volumes, while many UK shippers have decided not to ship.

There is, however, always one. The moronic Spiked has published a text headed, "Take it from a trucker, Brexit is nothing to fear". This is from a truck driver, who has recently done work on the continent. He is qualified as a transport manager, and has studied transport management and logistics, So, he tells us: "I know a thing or two".

Armed with this knowledge, Mr Graham Brown - for that is his name – informs us that the main potential problem from Brexit – the one which is animating the media – is that some drivers might turn up to the border with incorrect documents, which could cause delays.

The main new document, he goes on to tell us, "is a customs declaration". These, he says, "are filled out by the exporter, although the driver will need to carry them, and operators have an incentive to work with customers to get these things right".

But, of course, the exporter doesn't fill in the customs declaration. As I've already remarked, the declaration is made by the importer and, for those sending goods to EU Member States, Article 170 (2) of the Union Custom Code specifies that the declarant must be "established in the customs territory of the Union".

This, of course, is only a small part of the additional burden imposed on importers, about which the FT has been writing, and we now also have growing complaints about other sectors, in particular fisheries products which are suffering badly.

But, as long as there are plenty of distractions around, the media (and the politicians) need not trouble themselves to confront the consequences of their activities (and inactivity). And the one thing both are extremely good at is finding distractions which help them stave off the need to confront reality.

What will they do though, when Mr Trump has gone and Covid is on the wane?

Also published on Turbulent Times.






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