PCIAW®ONLINE Brexit Trade Deal Series
On 1st January 2021, the UK officially completed the transition period for the country’s exit from the European Union.
PCIAW®ONLINE opens with the first piece in our Brexit Trade Deal Series with John Miln, Chairman of PCIAW®, to discuss the implications of the new Brexit trade deal on the professional clothing industry.
Whilst businesses may welcome the certainty provided by a free trade deal being reached, companies need to adapt to the new rules and processes in order to continue operating.
What was your initial reaction to the finalisation of the Brexit trade deal with the European Union?
Overall my reaction was one of relief that the deal – ‘The UK-EU TCA’ was finally agreed. It is clearly the UK’s largest and most comprehensive Free Trade Agreement (FTA), conducted with our biggest market. However, the devil is in the detail and member companies will have many new procedures and rules to consider when conducting UK/EU and EU/UK trade (both imports and exports) post January 1st 2021 as goods in free circulation come to an end at the same date.
What impact do you think the implementation of the UK’s new trading relationship will have on UK SMEs in the professional clothing industry?
Certainly, for SMEs at the beginning, there may be a lot of confusion and extra work in compliance, particularly in getting to grips with new regulations and the associated costs of doing business. Larger companies may be somewhat more advanced in their planning but, common to all organisations, I expect there to be some ups and downs as we all become more familiar with the processes required to conduct business within the new FTA Agreement.
What advice would you give to other businesses adjusting to the new trading regulations to ensure a smooth continuation of operations and business partnerships?
Get advice, help and support to understand what you have to do. If you don’t have a customs broker or freight forwarder, then do find one that is competent to support your business. The new UK-EU FTA only confers duty-free export-import for goods made in the UK or EU – but VAT will now apply at the EU and UK borders.
In addition, tariffs will apply to all goods which are not physically manufactured in the UK or the EU – they also apply to goods initially imported under the UK and EU’s separate (but identical) GSP schemes. Be aware that tariffs will also be payable in a range of other circumstances and UK or EU Import VAT will be payable at the border on all goods at the prevailing rate of the EU member receiving the goods. In order to facilitate this, UK companies will need a UK EORI to export goods from the UK and either an EU EORI or an appointed customs broker to import goods into the EU.
The gov.uk website is a great place to start to understand what you have to do. The above commentary contains only the basic key points. All companies will need to consider rules of origin; garment labelling; customs declarations, certifications and more.
In addition, companies need to understand continuing IP and GDPR regulations; attending Trade Fairs and ATA Carnets; Business Travel/Freedom of Movement; Healthcare; Selling B2C online and Harmonisation of Standards and Schemes (such as “organic products” and “trusted trader” (AEO) schemes.
How do you think the Brexit trade deal with the EU will impact the UK professional clothing industry as a whole and do you have any predictions of what may change in the future as a result of new trading terms?
It is clear that those companies exporting outside of the EU will already understand some of the complexities of the logistics involved in providing the right paperwork to conduct trade. On the other hand, it is also clear that all companies will face extra red tape, cost, time and effort to conduct trade with the EU.
As companies become more proficient and familiar with the new regulations, one assumes the process becomes more seamless over time. It may also be that as the trading relationship becomes more robust, an element of relaxation in both cost and paperwork would benefit both parties based on experience and existing compliance.
But it is as well to understand that, for now anyway, the new regulations are here to stay and we all must become as familiar as possible with rules and processes concerning our EU trading relationship.
PCIAW® members who have any questions should contact us at email@example.com
If the answer is not readily available from the official government website or your supporting customs partner – if we don’t know the answer we’ll find somebody who does.