Frictionless Trade? UK-EU Customs Relations Post-Brexit

On 15 and 16 August 2017 the UK Government published two papers setting out its proposals for UK-EU customs relations post-Brexit.  The papers represent an important step forward as they set out the greatest detail to date as to the Government's thinking in this area.

Next Steps for Businesses

As we explain in our briefing, the Government papers indicate the possible direction of travel but not the final destination, as the proposals are partial and raise significant questions in practice.  There remains ample opportunity for businesses to seek to influence the debate and it would be prudent for businesses to study carefully the proposals in light of their own particular circumstances. Submissions should be made to stakeholder.engagement@dexeu.gov.uk.

The Government Papers and the Ongoing UK-EU Brexit Negotiations

The first of the two papers is a "future partnership paper" on UK-EU future customs arrangements, which sets out the Government's proposals for UK-EU customs relations and calls for stakeholder input.  The second paper is a "position paper" specifically in relation to Northern Ireland-Ireland border arrangements, which covers a number of aspects, including the movement of goods across the Northern Ireland-Ireland border, and which overlaps and builds upon the groundwork in the UK-EU future customs arrangements paper.

The different status of the two papers is linked to the phasing of the ongoing UK-EU Brexit negotiations that remain currently at the first phase of discussing "exit issues", of which the Northern Ireland-Ireland border arrangements is one.  The EU has required that sufficient progress is made in relation to these exit issues before the Brexit negotiations can move on to discussing the framework for a future relationship, including UK-EU customs arrangements.  In publishing these two papers essentially together, the UK is attempting to move the debate forward by demonstrating that these issues are to an extent interlinked – the Northern Ireland-Ireland border arrangements exit issue may depend on the future UK-EU trade relationship.

In addition and importantly, the focus for the discussion in both papers concerns those elements of customs controls that relate to customs duties and their administration.  With the exception of sanitary and phytosanitary measures (SPS) for agri-food products, which are mentioned in the Northern Ireland-Ireland border arrangements paper, these papers do not address in any detail the compliance of products with technical standards.  While this issue arises in relation to all sorts of different product sectors, it is particularly sensitive for agri-food products, where checks take place primarily at the border.

In this briefing, we explain the practical implications of the proposals put forward by the Government and the challenges that these pose.

You can read our full briefing here.