What do the Government’s Brexit Papers Mean for Your Business?
On 9 October the Government released on its website the latest papers outlining its approach to international trade policy after Brexit.
In its paper “Preparing for our future UK trade policy,” the government discusses the role of trade and the basic principles that will shape its future trade policy. The paper was released from the Department for International trade of which Liam Fox is the secretary of State and the President of the Board of Trade since 2016. As he said: “We want to build a future trade policy that delivers benefits for the UK’s economy and for businesses, workers and consumers alike.”
The paper sets out the first ever UK independent trade policy as the government prepares to exit the EU, stressing the UK’s role in a multilateral trading system and on expanding existing bilateral relationships. The hope is to build a strong and global British economy and an “open and fair trade.”
In order to support businesses, the government has proposed a “time-limited implementation period” which will be agreed with the EU, to allow for your business to adjust to the changing conditions and new systems. Within this period your business will be able to continue having access to the EU’s markets and vice versa to avoid disruption and ensure continuity.
The government’s three objectives—to ensure UK-EU trade is frictionless, avoid a hard border between Ireland and Northern Ireland and to establish an independent trade policy—will guide the government in its negotiations with the EU. In this paper, where an independent trade policy emerges and is developed, the UK envisions its place as an independent member of the World Trade Organization (WTO) and a proponent of trade liberalisation. It ensures businesses that it will strive to remain part of the WTO Government Procurement Agreement (GPA).
What is the GPA?
The agreement on Government procurement of the WTO is an international treaty that regulates government procurement of goods and services by the public authorities of the parties involved based on the idea of open, fair and transparent competition.
The government is determined to support the WTO and in the longer term, will continue to work with the WTO to “cut red tape across borders, phase out distortive subsidies, scrap tariffs on trillions of dollars’ worth of trade, and work to ensure the rule book stays relevant as patterns of trade change and technological innovations develop.”
The paper seeks to reassure that the government will work with the devolved administrations “to deliver an approach that works for the whole of the UK, reflecting the needs and individual circumstances of England, Scotland, Wales and Northern Ireland, and drawing on their essential knowledge and expertise. We recognise that if we are to represent the UK effectively on the international stage, we must build support for our vision across all 4 nations and deliver real, tangible benefits.”
The UK hopes to secure access to overseas markets for UK goods exports, push for greater liberalisation of global services, investment and procurement markets. They will also seek “ambitious digital trade packages, including provisions supporting cross-border data flows, underpinned by appropriate domestic data protection frameworks.”
Transferring EU trade remedy measures
Once Brexit happens, and the implementation period is over, then UK businesses won’t be able to request from the European Commission to investigate claims of dumping or subsidy in the UK.
If you own a business, especially in the steel, ceramic and chemical industries, then this will affect you the most. If there is no action to transition existing trade remedy measures then such measures won’t apply to products arriving in the UK. This is why is important, as the government recognises, to continue existing trade remedies measures which are vital for UK businesses and which will be tailored to the UK economy’s needs.
In another paper on post EU trade and customs policy, it is stated that “the government has repeatedly said that we are confident that a positive deal can be reached with the EU, it is only prudent that we prepare for every possible outcome. Therefore, the paper covers provisions for the implementation of customs, VAT and excise regimes in the event that no deal is reached, and sets out the steps the government would take to minimise disruption for businesses and travellers. It also enables the UK to prepare for a range of negotiated outcomes including an implementation period.” However, retaining access to the single market and customs union is the best possible outcome for all businesses and their employees. As it is increasingly difficult to retain and employ EU workers, the government is more and more under pressure to have a transition plan in place that maintains the UK’s place in the single market and customs union. From the government’s views in these papers it is clear that the UK is preparing for the possibility of leaving the EU without striking a free trade deal.
Particularly, the paper on trade shows that a “no deal” scenario is still a valid possibility for the government, despite the fact that many ministers are divided between those who wish the UK to remain close to the EU and those who wish to expand trade relationships with non-EU states. However, both Eurosceptics and Europhiles, would find little to complain about or support, since these papers raise more questions than offer concrete answers and positions. Businesses would have to wait a bit longer to get the certainty and security they need, as the UK and EU find more common ground in their ongoing talks.