The UK formally exited the EU on 31st January 2020. The 11-month transition period meant for negotiating a new trade deal will come to an end on 31st December. But there is still no sign of a new deal. In the absence of a free trade deal, which would allow goods to be transported without any tariffs, UK will default to WTO tariffs.
Along with a good chance that taxes will be applicable to imports and exports between the UK and EU, it is also a given that customs regulations will be enacted at the border. Customs regulations will most likely result in delays at the border, causing disruption in supply chains and directly affecting fast-moving consumer goods (like vegetables, fruits, cadies, toiletries, etc.) Moreover, new IT systems need to be installed and customs staff recruited to run operations at the border.
More than half of the UK’s import and export takes place with the EU. This means that the government and the businesses inside UK who deal with parties in the EU are presented with the great challenge of ensuring efficiency in the transport of goods between the UK and the EU. Both are largely underprepared in this regard.
While businesses have their own challenges to deal with in terms of complying with customs requirements and smooth sailing of relevant paperwork, they have also expressed serious concern to the government over the lack of clarity in how things will be run in the logistics industry. The government, on the other hand, has invested millions to try to ensure smooth sailing of the new systems. Detailed instruction manuals are being published on the government’s official website to assist businesses to comply with new regulations.
The government, on the other hand, has invested millions to try to ensure smooth sailing of the new systems. Detailed instruction manuals are being published on the government’s official website to assist businesses to comply with new regulations.
But the fact remains that it is not possible to efficiently transition from a 40-year-old system of trade to a new one in just one year. There are gaps and holes in how preparations are being made for post-transition period trade. Industry specialists are expecting many disruptions and delays in border checks and supply lines, all of which will affect the timely delivery of goods to consumers. Moreover, customers will most likely have to put up with increased product prices, thanks to tariffs. From what it looks like, a brief period of chaos will ensue following the end of the transition period on 31st December.