No Deal Brexit could cause disruption for EU Traders

No Deal Brexit could cause disruption for EU Traders

Businesses trading with the EU have been told to brace themselves for a period of disruption if the UK leaves without a withdrawal agreement.

Leading logistics expert and Managing Director of Leeds-based Tudor International Freight, David Johnson, said the prospect of leaving without a deal had become a very real possibility.

With issues such as the Irish border still causing a lot of debate between Prime Minister Theresa May and the EU, time is running out for a deal to be agreed, with a winter deadline looming in order for the agreement to be ratified in time.

Johnson commented: “The temporary disruption a ‘no deal’ Brexit would cause traders has now been laid bare by the government in a series of technical notices, advising hauliers to consider alternative modes of transport when moving goods between the UK and EU.

“Thanks to our EU Single Market membership, licenses for lorries issued by UK authorities are currently valid across the European Union, but this could all change if the UK leaves without an effective deal.

“UK operators could be forced to obtain European Conference of Ministers of transport permits to enter the EU, and the government has warned it may not have the time to renegotiate these arrangements before any ‘no deal’ outcome takes effect.

“With demands for such permits expected to exceed the limited supply, it could prove to be a very disruptive period for businesses.”

Johnson added that the technical notices made no specific mention of plans for freight movements between the UK and Republic of Ireland, in the event of a ‘no deal’ Brexit.

He said: “Currently, under a wide range of EU legislation, airlines registered in one member-state can operate in another without seeking permission, but this would cease to apply without an agreement.

“While the government has expressed intent to provide landing permission to EU flights, there hasn’t been a definite decision made by European partners. If the government fails to reach an agreement, it has said it will work towards securing bilateral agreements, but these could take a while to conclude.

Johnson emphasised that even with a withdrawal agreement, businesses trading with the EU could be waiting many months for long-term certainty, with talks on the future trading relationship due to end in December 2020.

He said options for such an agreement included the UK remaining in the EU’s Single Market by joining the European Economic Area, signing a free trade deal with the bloc or concluding a bespoke arrangement, such as that envisaged in the Prime Minister’s Chequers proposals.

Johnson said: “It seems that there are two possible regimes that could apply to businesses trading with EU countries after next March, with one being the disruption of a ‘no deal’ outcome. The other is business-as-usual, following a withdrawal deal, with traders waiting many months for details on future arrangements.

“Neither is ideal, in our view, but we regard the latter as far preferable for the affected traders.”