The outcome of the UK’s Transition from the EU is still uncertain, depending heavily on the result of the current negotiations between the UK and the remaining EU States.
Whatever the final shape of any deal (or no deal), there will be winners and losers among UK companies and their trading partners internationally.
The implications of deal or no deal is such a broad topic that it is hard to answer the questions in a short article. The devil is in the detail – and the problem is that some of the detail is still not known.
There are the broad-brush questions – what are the concerns with a deal or a no deal and how may Ireland be affected politically? – but the overriding challenges are about all the multiple technical issues that will change after the Transition period.
What are the concerns if there is a free trade deal?
The problem is that we don’t know if there is a free trade deal yet, so companies are trying to quote prices for the coming year and do not know for sure if tariffs will definitely come into play — either for imports from, or exports to, the EU. Obviously it is better for our exporters if their customers do have to pay more because of the tariffs. Actually, whether it is the buyer or the supplier who pays the tariffs depending on the shipping terms, the fact of the matter is that if the buyer is used to having DDP (delivered prices), they are unlikely to want to pay duty all of a sudden.
The government is taking a staged timing approach to imports but the EU is not currently offering the same, so a lot of the impacts will be felt by exporters immediately in January.
Many firms fear the effects of complete free trade and how this might impact UK suppliers ultimately if cheaper products flood the market...
There are certainly some products that will be more drastically affected by tariffs than others, especially in the agri and food sectors. And of course where UK companies are shipping products directly from their factories outside Europe to their retail customers within the EU they will already be attracting the relevant duties that apply from those countries.
What are the concerns over Northern Ireland if there is a deal?
In respect of Great Britain to Northern Ireland – As set out in the Government’s Command Paper, The UK’s approach to the Northern Ireland Protocol, there will be some changes for goods movements into Northern Ireland from Great Britain. Food and agricultural products – and all goods classified as sanitary and phytosanitary – will be subject to specified processes.
These will uphold the longstanding status of the island of Ireland as a single epidemiological unit, while avoiding a hard border on the island of Ireland. The Protocol means that UK authorities apply EU customs rules to goods entering Northern Ireland.
This entails some new administrative process for traders, notably new electronic import declaration requirements, and safety and security information, for goods entering Northern Ireland from the rest of the UK. These are needed to make sure that tariffs are not paid on trade within the UK and that goods going to Ireland pay tariffs when they should.
The government asserts it will ensure these electronic processes are streamlined and simplified to the maximum extent, and guarantees that Northern Ireland businesses benefit from the lower tariffs delivered through its new Free Trade Agreements with third countries. As some of the detailed procedures will depend on the outcome of discussions within the UK-EU Joint Committee, further details will be set out in due course.
In dealing with these new processes, traders in Northern Ireland will have access to a new, free UK Government service, the Trader Support Service, which will undertake those digital processes on behalf of traders. Once registered with the Trader Support Service, businesses will need to provide digitally the appropriate information on the goods being moved, and the new service will deal with all associated requirements for free. This support service will deal with the costs and burdens from the process of moving goods into Northern Ireland. Each business’s EORI number will provide them with a unique reference ID for the service. All traders who wish to draw upon the support should sign up on the government site (sign up for further information).
In respect of Northern Ireland to/from the EU
According to the government, there will be no change for the movement of goods covered by the Protocol between Northern Ireland and EU Member States, including Ireland. That means there will be no new paperwork; no tariffs, quotas or checks on rules of origin; nor any barriers to movement within the EU Single Market for goods in free circulation in Northern Ireland. No EU Member State will be able to apply any tariff or related barriers to goods from Northern Ireland: the EU is obliged under Article 5 of the Protocol to guarantee tariff free, frictionless access in any scenario from 31 December 2020. This does not just apply to movements from Northern Ireland to Ireland: it applies to movements to any other EU Member State, including for example through the use of transit procedures.
Northern Ireland businesses will therefore enjoy unfettered access to the whole of the UK market as well as the guaranteed ability to trade freely within the EU Single Market. Furthermore any approvals or certifications secured in order to place goods on the market in the EU will be recognised when seeking to place the same goods on the market in the United Kingdom - avoiding the need for additional approvals to access the UK market.
This arrangement, says our government, will provide Northern Ireland businesses with both unfettered access to the UK market and free access to EU markets, reflecting the unique circumstances of Northern Ireland and the Belfast (Good Friday) Agreement. It is supported and underpinned by the accompanying commitments to preserve the Common Travel Area and to maintain the conditions for North-South cooperation, providing the platform - alongside the commitments made elsewhere by the UK Government - for continued growth and stability in Northern Ireland.
The government’s Trade Support service has just gone live: much of this service is aimed mainly at the freight companies and others that actually move the goods.
So in essence, the key messages for UK exporters are:
The Gardenex and PetQuip associations are keeping members informed of all the latest government advice on what companies need to do in preparation for the period from 1st January 2021.
One thing that is clear is that Customs declarations will become the norm for all shipments to customers in the EU, including for all exports to the whole island of Ireland under the Northern Ireland Protocol and it will be important for all companies to talk to their freight forwarders as to how this impacts on their business.
What we are striving to do is keep all of our members up to date with all the latest developments.
Later this week, we will be sending out our latest in a series of bulletins on the post-Transition impacts of the rules that come into play from 1st January onwards which will once again include advice and guidance on multiple areas of business.
For companies exporting products that are subject to some kind of regulations, whether this relates to chemicals, plant products, food etc, we highlight the specific advice that the government and specialist bodies provide on the new arrangements that are coming into place.
One of the issues that companies face is the uncertainty as to whether duties will be definitely be imposed for imports and exports : but what receives less publicity is the increased burdens on documentation preparation, the costs of this and the changed roles that importers will have in this process. Then there are the potential issues of delays at ports and keeping up to speed with EU regulations whilst at the same meeting new UK documentation and regulations that may come into play into the future.
Using the Federation’s 100-page A-Z Guide to Exporting and its frequent updates, we give members advice on export procedure and all the latest developments.
Member companies can also access the Members’ Only area on our website to find comprehensive advice, DIT and BEIS announcements, export information bulletins and much more to answer your specific problem or concern.
Our exclusive exports helpline is used by hundreds of our members to ask questions on technical details of exporting, especially currently as the UK’s departure from EU affects many business areas: whether in terms of product regulations, deciding whether to change shipment terms, Intellectual property, export documentation, labelling of product and much more.
What should UK garden product suppliers have done by now in respect of Brexit?
They should certainly be checking what effect the new requirements needed for customs clearance (for both exports and imports), EORI numbers and the impact of potential duties (on imports as well as exports) might have on their business from January next year.
They should especially be investigating the potential impact of regulations for their particular product areas will have on their exports to EU in future, in respect of certifications approvals etc.
They should also note the need for relevant customs documents and invoices to be prepared in advance of the shipments, as vehicles will not be allowed to enter Dover without the required advance ‘smart freight’ information.
They should also be communicating with suppliers, freight forwarders and export customers to ensure a smooth transition and check issues such as shipment terms, labelling requirements, and any new export documentation, as well as the requirements for travelling to Europe from January etc.
The best way of keeping up with the latest information across these multiple areas of their business is to join Gardenex, PetQuip or the Commercial Horticultural Association as appropriate to receive regular up to date advice and bulletins and to sign up for government email alerts relevant to their business in the Transition section of the gov.uk website.
What are the concerns if we revert to World Trade rules both for companies in the UK and NI?
There is an overall concern about the impact that duties on products under WTO terms will have on companies’ business to the EU, which is a hugely important market for our sectors – but actually in this respect probably the bigger impact is not knowing for certain whether there will be a deal or not.
But perhaps the greater issue for businesses is digesting all the wealth of detail coming out from government and absorbing how this will impact their day-to-day business with European customers and suppliers alike.
That is where our export services come into play: our Research team can help by answering direct queries, in regular business bulletins, via our A-Z Guide to exporting, through our export helpline and by signposting to specialist providers.
Ergrownomics, which supplies innovative raised beds and planters, has recently joined Gardenex. Sales Director, Jamie Bending, said: “Gardenex has worked hard throughout the year to provide advice and guidance. All members of the team have been hugely helpful, and are never more than a quick email or call away.”
The Federation’s extensive membership benefits include access to an exclusive database of international buyers worldwide, taking part in ‘Meet the International Buyer’ events (currently being organised ‘virtually’), global market research, technical advice, comprehensive business bulletins and access to the Federation’s online specialist exports helpline.
Amanda Sizer Barrett, Director General of the Federation, confirmed: “The last couple of years have seen huge challenges for UK businesses with the uncertainties of Brexit and the current coronavirus pandemic but Gardenex, PetQuip and the CHA are here to help.
“As members of our associations, companies can benefit from our help and support on all aspects of current and future exporting and we look forward to continuing to work with businesses to help them increase international sales.
“We are looking forward to supporting UK suppliers in the next months to navigate the outcome of the UK’s transition from the EU and to seize the undoubted international business opportunities that lie ahead.”
For companies who would like to have the inside track in what they need to do regarding exporting, the effects of the Transition period and trading rules and protocols after January 1st 2021, contact email@example.com, firstname.lastname@example.org or email@example.com, visit www.Gardenex.com, www.petquip.com or www.cha-hort.com to sign up for membership: let us guide and help you through the maze of EU-Exit queries!