18 >> 17 points


Issue 2 2017 - FBJ


sense any more,” he declared. “Costs will go up – there’s no question about that.” He also questioned whether a UK living under straitened economic circumstances as a result of Brexit would be able to go on buying Irish goods to the same extent as before. Some of the current UK economic statistics – input costs up by 27%, inflation on the rise again – made for very ominous reading, he said. Frankie Devlin,


partner


Country’ were still fresh; there were


still a few locals inclined to take pot shots at devices like pole- mounted cameras. The Eire/ NI border was also 500 miles long with numerous ‘unofficial’ crossing


that could


encourage smuggling, should the UK and Northern Ireland find themselves astride a customs border again. Moreover, added McGrane,


the pattern of cross-border trade was complex. A third of milk produced in Northern Ireland


was processed in Eire. Firms moved part-completed products across the border, oſten more than once during the production process. In a worst-case scenario, in


which the UK ended up trading with the EU on WTO terms, duties on products such as milk or cheese could rise by over 50%. Also, McGrane


added, the Ireland :Layout 1 17/3/17 09:16 Page 2


need for customs clearance could introduce unwelcome delays into Eire/UK trade, which would probably render many operations unviable. “The economics of it may not make


at


business consultancy KPMG’s Belfast office, confirmed other speakers’ assertions that “there would have to be some sort of border” despite British PM Theresa May’s call for “seamless and frictionless” trade with the EU to continue. However, what form that


border would finally take and the negotiations that would precede a trade deal remained far from clear. Negotiations may or may not be concluded within the mooted two-years; or there could be a transitional period aſter that date, if remaining EU member


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states agreed it. Elections in Germany, France and the Netherlands could deliver more anti-EU, anti globalisation political parties in other parts of Europe. Devlin was unsure whether


Theresa May’s vision of the UK continuing to have ‘associate membership’ of the EU customs union was realisable or whether there would be legal difficulties in being “half in, half out” of the trading bloc. A UK outside the EU VAT area


could have serious cash-flow implications


for business, as


could the need to pay customs duty or carry out customs clearance. “If the UK is not in the customs union, it looks as if there will be the potential for customs


tariffs and even more costly compliance costs.” He put the typical cost of customs clearance alone at £40-50 per consignment, “so for any business operating cross-border, it’s going to be very costly.” He


also doubted whether


Theresa May would be able, as she has suggested, to negotiate alternative free trade agreements with third countries within two years, without which the UK would find itself trading under WTO terms - “in other words, a hard Brexit.” The UK would be free to set its


own VAT rates – there is currently a 15% minimum on most goods – which might lead it to compete with Eire for trade in some types of goods. If WTO tariffs were


imposed on some Irish goods there could again be implications for


Irish trade, particularly


agricultural goods. Devlin’s colleague, Fionn


UibhUibh Eachach, director at KPMG’s Dublin branch, pointed out, also, that with the UK outside the EU VAT area, VAT on goods traded to and from the UK might have to be paid upfront, rather than the current system whereby most goods are zero- rated at the point of import. There could also be costs


involved in uprating firms’ IT systems to cope. He added that protracted free


trade negotiations between the UK and third countries could also push up the cost of trading with the UK.


Forwarders get down to business


A key item arising from the group discussions at the seminar was recognition that customs clearance administration will almost certainly increase once the UK leaves the EU, writes the


Irish International Freight


Association (IIFA). Whatever form any border


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takes, it will be necessary to process customs declarations and appropriate documentation as required. Later this year, IIFA will launch a Customs Clearance and Practical SAD Competition course to give its members the necessary skills to handle the new requirements of a post- Brexit Ireland. While there are a number of


suggested avenues to pursue, based on the feedback from this seminar, IIFA would prioritise: seeking recognition from European Union that Ireland is in a unique position and that this situation will be a factor


when negotiations begin; the Government should analyse present port and airport airport infrastructure, including consultation with trade and private transport providers on extra vessels or aircraſt if deemed necessary; and to begin training Revenue staff and Trade in the areas of Customs Clearance. At the workshop session,


industry representatives were given


the opportunity


to volunteer key opinions and concerns for the Freight, Logistics and Transport industries surrounding Brexit. IIFA then


to collated this


information to present it to Irish MEPs and relevant Government departments. With an audience made up


of owner managers and senior executives from leading multi- national companies based in Ireland - all involved in arranging


international freight - the information sourced on the day offered insightful information on the real issues facing Ireland. There were also attendees from the North of Ireland along with shipping lines, customs brokers, financial services and Irish Government departments. IIFA will


continue to


work collaboratively with Government to provide the insight and information that is needed in order to ensure the best possible outcome for Ireland when negotiations begin. He also praised the Government for its proactive approach to Brexit and engagement with the trade. IIFA has drawn up a five-point


plant for Brexit preparations. Along with continued engagement with Government, it aims to launch an IIFA Customs Clearance course and set up an all-Ireland workgroup to study frictionless borders.


///IRELAND


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