Here, Zoe Chadwick from PLMR explains how the customs union and the relationship with Ireland could affect the equine industry.
A hint of clarity
With Parliament due to return at the beginning of next month, there'll certainly be plenty for them to talk about as far as Brexit is concerned!
Last week, the Government made two announcements – one on the UK’s relationship with the customs union, and another on the relationship between Ireland and Northern Ireland (and by extension the rest of the UK).
These announcements indicate a softer approach to Brexit on the Government’s part. Let’s have a look at what these announcements mean for the UK and the equine industry.
Future customs relationship with the EU
The Government says it's aiming for the “freest and most frictionless” trade possible between the UK and the EU in any future customs arrangements once it has formally left the bloc in 2019.
According to the Government’s paper on this issue, the UK could ask Brussels to establish a "temporary customs union" after it leaves the EU in March 2019.
But during this period, it would also expect to be able to negotiate its own international trade deals - something it cannot do as an EU customs union member. Ministers said the use of interim arrangements would mean businesses would only have to adjust once to the new arrangements.
Once this period expires, the UK will look to agree either a "highly streamlined" border with the EU, or a new "partnership" with no customs border at all.
The Government has outlined two possibilities for its future transitional customs relationship, which could last for up to three years:
- A “highly streamlined customs arrangement” which would seek to alleviate all possible barriers to trade over borders. It will mean businesses would have to declare imports and exports with HMRC with all relevant documentation.
- A “new customs partnership” which would involve the UK and EU trading with each other as third parties. Britain said this plan “removes the need for a UK-EU customs border”. Among other things it could involve the UK applying all the same tariffs and rules of origin requirements on goods arriving into the UK and heading for the EU.
This announcement was the first of many publications on Brexit that the Government will issue over the coming months, and as part of its vision for trading relationships outside the EU, it will publish a White Paper (a government report giving information or proposals on an issue) ahead of a new Trade Bill in the Autumn.
Ireland and Northern Ireland: A back door to Brexit?
The Government’s proposals for the Irish border post-Brexit include:
- Upholding the Belfast (‘Good Friday’) Agreement in all its parts
- Maintaining the Common Travel Area and associated rights
- Proposing that the UK and the EU seek to agree text for the Withdrawal Agreement that recognises the ongoing status of the Common Travel Area and associated reciprocal arrangements following the UK’s exit from the EU.
- Avoiding a hard border for the movement of goods
- Ensuring that there is no return to a hard border as a result of any new controls placed on the movement of goods between the UK and the EU
- Aiming to seek “regulatory equivalence” with the EU to try to avoid the need for inspections of live animals and billions of pounds worth of other goods crossing back and forth
- Seeks continued membership of the Common Transit Convention to help Northern Ireland and Irish companies transit goods
- Would need a robust enforcement mechanism that ensured goods that hadn't complied with the EU’s trade policy stayed in the UK – could involve a tracking mechanism, where imports to the UK were tracked until they reached an end user
This has been branded by some as a ‘backdoor’ to Brexit, allowing free travel into, and outside of, the UK.
What does this mean for the equine industry?
While it still appears that the Government’s intention is for the UK to eventually leave the customs union and the single market, the proposed interim period for the UK’s withdrawal from the customs union means that it will remain easier than envisaged to transport equine goods across Europe.
It will mean there's a period of up to three years where goods will be able to move freely and easily across UK borders in a similar way as currently stands.
From what the Government is saying, this interim arrangement will prevent World Trade Organisation tariffs from being imposed, at least until the interim arrangement concludes.
Similarly, the proposed commitment to maintaining a flexible Irish border will be welcome news for those concerned about the feasibility of moving horses and equine goods post-Brexit.
The Government clearly understands the importance of the border - for trade, peace, and everything in between.
This is reassuring for the equine sector. As with everything Brexit related, this is all subject to intense negotiations – I’ll keep you posted as this develops.