Brexit “Five Years On”

Well, sort of...
pole with brexit and eu direction signs

The original Brexit date was 29th March 2019, but the final date was 31st January 2020. Five years on from the original date, how has the customs industry changed? Find out in this article.

Changes in UK border procedures due to Brexit

Since January 2021, every shipment between the UK and continental Europe has required a customs clearance. No matter whether your goods are travelling by road, sea, air, or rail, an export clearance or import declaration must be completed at the border.

Before January 2022, shipments moving by road (Ro/Ro ferry) were less monitored in the UK. A clearance was required, but there were no checks at the UK border so that trade could keep moving whilst traders found their feet. In January 2022, the “real Brexit” began with the introduction of GVMS, whereby these movements were also blocked at the border without a clearance.

The effect on UK traders

When we asked Product Manager Tom Edwards to comment on the requirements for clearances with UK/EU movements since Brexit, he said:

“Although Brexit did expose a lot of businesses to new red tape and there were some teething problems, we’ve seen that it’s actually been a very good thing for them long-term.

Now that the obstacle of dealing with customs paperwork has been overcome, many entities we work with have been able to expand their business beyond the EU because they already have that contact with a customs partner who can guide them through it. 

It’s given them options that they previously wrote off because customs would be an added complication. As the UK continues to create its own trade deals, we expect trade to become far more diverse as time goes on.”

The UK’s trade initiatives since Brexit

Without EU membership, the UK lost the benefit of approximately 70 trade deals. Here are some of the agreements they have negotiated since Brexit:

2020 – The EU-UK Trade and Cooperation Agreement

After leaving the European Union, the UK and EU agreed a trade deal which provided both with preferential origin and aligns them on policies surrounding trade and security. Getting a deal done was essential as the EU is one of the UK’s largest trading partners. 

This agreement was finalised only days before customs processes were due to come into effect on 1st January 2021. Despite the delay and initial complications of changing the borders for Brexit, trade remained strong between the EU and UK, with business valued at £772 billion in 2022.

2022 – Replacing the GSP with DCTS

The Generalised System of Preference (GPS) is a framework used by the EU to allow preferential origin for trade with developing countries.

With the UK out of the EU, the UK is free to negotiate its own list of countries that will benefit from preferential origin. Hence, the Developing Countries Trading Scheme was born.

2022 – Free Trade Agreements (FTAs) with Australia and New Zealand

Agreed in 2022, the A-UKFTA and NZ-UKFTA both came into effect on the 31st of May 2023. Under the FTAs, trade of both services and goods benefit from reduced red tape. There are also lower duty rates for goods traded.

April 2023 – The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is a free trade agreement between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam.

The CPTPP allows goods and services to be traded with reduced red tape and taxes so that your business with other countries in the partnership can thrive.

Read all about it on our LinkedIn.

June 2023 - The Atlantic Declaration between the UK and USA

Accounting for about 16.3% of the UK’s trade in 2022, the USA is one of the UK’s largest trading partners. The UK is also the USA’s seventh-largest trading partner.

Despite the relationship, there is no trade deal between the two countries.

However, in June 2023, both the UK and USA committed to future growth with the Atlantic Declaration. This agreement seeks to use a “digital bridge” to share data, encourage investment, and facilitate collaboration on key projects – supporting both supply chains and technological innovation. 

Other areas of focus are critical mineral mining, clean energy development, and artificial intelligence.

More changes are coming to the UK border

With the UK’s withdrawal from the EU complete and traders used to the flow of goods to and from the continent, the UK is moving to make border processes more uniform. At the same time, the UK is creating a new border system without the need to comply with EU regulations.

You can read more about the UK Target Operating Model and other upcoming changes to UK customs legislation in our blog.

If you want advice on how the changes to customs with Brexit can affect your supply chains, get in touch with us for more information