10/10/2017

White papers set out UK trade and customs policies post-Brexit (UK)

On the eve of the fifth and final round of negotiations before EU leaders decide if sufficient progress has been made to move on to core post-Brexit arrangements such as trade, the UK government has published two white papers outlining the trade and customs policies the country would adopt if no deal can be reached.

Brexit negotiations to date have focused on three main issues: citizens’ rights, the Irish border and the size of the ‘divorce settlement’ that the UK will be expected to pay. Least progress has been made on the latter, which is likely to prove the major barrier to the start of a 2nd phase of negotiations.

The two white papers provide the most detailed information to date on the government’s contingency planning for Brexit without an agreement. They pave the way for legislation that will ensure the UK is ready to operate as ‘an independent trading nation’.

‘Preparing for our future UK trade policy’ confirms the Dept for International Trade’s proposals for a ‘strictly time-limited’ transmission period to be agreed between the UK and EU to allow businesses and people to adjust and new systems to be established.

In addition to specific areas where legal powers will be needed to ensure the UK can operate independently from the day it exits the EU, it also identifies the following 5 core elements of a future trade policy

  • undertaking a comprehensive stakeholder engagement programme to ensure a new trade policy is transparent and inclusive
  • maintaining the benefits of the World Trade Organisation’s Government Procurement Agreement
  • continuing to give developing countries preferential access to UK markets
  • bringing existing trade agreements between EU and non EU countries into UK law
  • creating a new UK trade remedies investigating authority

‘Customs Bill: legislating for the UK’s future customs, VAT and excise regimes’ sets out HM Treasury’s plans for a new agreement on customs that “facilitates the freest and most frictionless trade in goods possible and which – crucially – avoids a hard border and any physical border infrastructure on the island of Ireland.”

In his introduction, Chancellor Philip Hammond, explains that – despite a negotiated settlement with the EU being the ‘preferred option’ – the white paper sets out how the government would manage leaving the EU without an agreement.

This would include a Customs Bill that gave it the power to

  • define how goods are classified and set rates of customs duty and any quotas
  • amend the Vat and excise regimes so that they can function effectively
  • set out rules governing how HM Revenue & Customs will collect and enforce the taxes and duties owed
  • implement tax-related elements of the UK’s future trade policy