How Free Is Free Trade?

18th August 2021

The Government trumpeted its ‘free trade' agreement but entirely failed to warn Brits shopping online with EU sellers that there are now duties of up to 25% to pay on many goods bought from EU sellers valued at over £135 (or 150 euros), To qualify for zero customs duties, items must meet the terms of the ‘rules of origin' agreed in the Brexit deal. Therefore, the item must either have a statement of origin from the exporter, showing where all its components were sourced, or the importer must prove knowledge of their origin. Failing all that, the items will be hit by potentially sizable tariffs. The situation is mind-boggling.

Just supplying enough documentation to satisfy customs about where an item originated is slowing customs clearance checks dramatically. February’s ONS figures show 35% of businesses are now facing importing challenges because of disruption at the UK borders. Similarly, 25% of exporters recorded disruption at borders.

26% of UK importers experienced problems paying customs fees in early February and that number was expected to climb during the month.

In October 2016, as negotiations got underway, Brexit Secretary David Davis promised: "There will be no downside to Brexit, only a considerable upside." Now the full impact of the UK’s trade deal with the European Union (EU) is becoming clearer, this seems a hollow claim indeed.

As well as the issue of proof of origin, the all-too evident downsides are escalating for UK importers, exporters, manufacturers and hard-pressed consumers.

Source Parcel Hero - https://www.parcelhero.com/research/brexit-study