Brexit: UK delays border controls to soften blows to crash economy

Brexit: UK delays border controls to soften blows to crash economy

The Government of the United Kingdom on Friday dropped plans to impose full border controls on EU imports on January 1, 2021, in hopes of easing pressure on companies has already hit from coronavirus and uncertainty commercial terms with the country’s largest export market.
Just in February, exactly days after Brexit came into force, he said, adding that there would be full controls for the start of the new year. He now intends to stop them, under pressure from the economic collapse of the United Kingdom and businesses that can no longer withstand another blow.
The United Kingdom has also confirmed that it will not expand after Brexit transition period with the European Union after the end of the year, which means that businesses and retailers may still face the shock of new tariffs and other trade barriers if a new trade agreement with Brussels is not completed in the coming months.

Under the new border arrangements, UK companies importing standard products from the European Union, such as electronics and clothing, will be able to defer full customs declarations and any customs duties for up to six months. Plant and animal products, such as meat, honey, milk and eggs, will be subject to customs control from April. By July, companies will have to make full declarations and pay customs duties at the point of entry.

The government said in a statement that its approach would “give the industry extra time to make the necessary adjustments”.

The reversal of policy comes after pressure from UK business groups in recent weeks for more clarity on border arrangements and terms of future trade with the European Union, warning that companies that have already been weakened by the fall of the corona are not will be able to withstand another shock.

“The logistics industry is extremely grateful for the measures announced by the UK government to introduce new trade regulations,” said Elizabeth de Jong, policy director of the Transportation Transport Association. “They listened to our concerns and made it possible for our sector to recover from the Covid-19 pandemic and plan effectively so that we can continue to negotiate effectively with Europe,” he added.

The government also announced that it would build new border facilities, including ports and inland areas, so that customs checks could be carried out and revealed a 50 50 million package ($ 63 million) to better allow customs brokers such as brokers. freight forwarders and package operators, to prepare.

The trucks pass through the port of Dover in the United Kingdom.
Betting is high on the border: The UK is enjoying itself right now trade without friction with the European Union, and any delays by new customs controls at border crossings would cause chaos in the supply chains on which British construction companies rely – such as the automotive industry.

The biggest point of crisis is expected to be the passage of English channels between Dover and the French city of Calais. The port of Dover handled 2.5 million trucks in 2018 and another 1.7 million passed through the nearby Eurotunnel under the canal.

Industrial groups have warned that food and medicines may not reach the shelves if there are long delays at the border. The European Union is the UK’s single largest trading partner, accounting for 45% of all UK exports in 2018 and 53% of imports, according to the National Bureau of Statistics. Europe is also the UK’s largest foreign food supplier, accounting for more than a quarter of the value of food consumed in Britain.

Double whammy in front?

Britain is in an precarious economic position.

The country is already heading for the worst corona-induced fall of any large economy, according to the Organization for Economic Co-operation and Development. GDP collapsed by about 20% in April, the first full month of locking.

British companies have so far borrowed. 35 billion ($ 44.4 billion) so far as part of a government coronation relief program, according to figures released by the UK Treasury Department on Tuesday. And nearly 9 million people – about 27 percent of the workforce – rely on the state to pay all or part of their wages at a cost of ,6 19.6 billion ($ 22.2 billion) so far.

Britain's largest companies cut tens of thousands of jobs. Millions more are at risk

Fears are now growing that businesses could deal with a corona strike and sever its remaining ties with the European Union without a trade protection agreement. Talks on a new trade agreement have made little progress.

“Negotiators seem to be stuck in a stalemate and are far behind on key issues such as governance, the rules of equity, fishing and, crucially, the borders of Northern Ireland,” Berenberg Bank economists said in a statement on Friday.

The Organization for Economic Co-operation and Development expects the UK economy to shrink by 11.5% this year, even if a key free trade agreement with the European Union is reached and a second wave of infections avoided.

The sharp rise in corona cases combined with a costly final exit from the European Union would only cause a deeper decline.

– Luke McGee contributed to the report.

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