Brexit update: With changes afoot, how is the UK/EU divorce going now?

Brexit | | MIC Customs Solutions |

January can often be a gloomy month, and it looks like Brexit developments have taken a pessimistic turn in accordance with this.

The impact of Brexit continues to be felt more acutely as more grace periods that were implemented as part of the withdrawal agreement expired at the start of 2022.

Unfortunately though, as some of the changes associated with the divorce deal roll in, it seems that a rosy picture of trade between the UK and the rest of the world cannot be painted while the first month of 2022 draws to a close.

To start with, new plans for biometric checks at the Port of Dover are causing disagreements between the government, customs authorities and traders as fears grow that they could cause lengthy delays.

The EU's new Entry/Exit System (EES) is set to come into effect this September and will involve body or facial scanning similar to that at airports for non-EU citizens wanting to enter Britain.

However, Logistics UK has warned this could cause tailbacks if lorry drivers are forced to leave their vehicles for the checks, while chief of the Kent port Doug Bannister told the BBC he feels the changes would be unsafe as well as causing queues. 

Indeed, since figures suggest 59 percent of trade in goods between the UK and the EU crosses the Channel, delivery drivers could find themselves unable to get products to their destinations on time with new checks to contend with.

"The UK is continuing to engage with our European partners at an operational level and, in particular, where we operate juxtaposed controls, to ensure our respective border arrangements work and interact as well as possible," a Home Office statement said.

Meanwhile, gloomy new analysis from IG Group published by City AM has suggested the UK's exports to the EU could be reduced by 7.73 per cent by 2025. It attributed this to smaller countries that are still in the bloc - namely Finland, Luxembourg and Portugal - benefiting from Britain's departure and picking up the lost pieces of trade.

Former secretary at the Department for Exiting the European Union (DExEU) Philip Rycroft also said the strict new rules that came into effect on January 1st 2022 could have prompted some UK businesses to decide importing is "simply not worth the hassle".

From the start of this year, importers have been required to make full customs declarations on goods heading from the EU to the UK, rather than having 175 days' grace on completing them as was the case before.

Furthermore, there is stricter legislation surrounding rules of origin that states declarations must be made as soon as goods arrive.

This may have been why a One World Express survey recently found that a quarter of small British businesses decided to move away from exporting to or importing from  the EU during 2021 - and it seems plenty of their European counterparts are ready to step in and pick up the slack.

Add to this the IHS Markit/Chartered Institute of Procurement and Supply data that found UK exports may not recover to pre-pandemic levels until 2023, and it seems the divorce deal really is suffering from the January blues.

One optimistic development did arise this week after European Commission Vice President Maroš Šefčovič and British foreign secretary Liz Truss met and vowed to keep their negotiations over the Northern Ireland protocol positive, with a further summit locked in for next month.

However, with an ongoing debacle in the UK over whether the prime minister broke lockdown rules, Boris Johnson may be forgiven for wondering if he will be the one to oversee any more discussions going forward.