With Brexit negotiations between the UK and EU restarting this week, the British International Freight Association (BIFA) has described the UK government’s insistence that it will not ask to extend the 11-month transition period as a very risky move.
Robert Keen, director general of BIFA, said: “In light of the huge issues involved with a sharp change in trading conditions at the start of 2021, particularly if that were to coincide with another Covid-19 outbreak, we think an extension looks increasingly likely.”
He added that, to date, there has limited progress on key negotiating points: “There has been little meaningful consultation with UK trade regarding the policies and procedures required in order to ensure that trade with the EU can continue relatively uninterrupted post December 31, 2020.”
Keen stressed that securing trade deals are “typically multi-year exercises” but the two parties have, realistically, until October 2020 to agree terms and allow time for ratification.
“While formal talks are continuing, many of the civil service resources previously assigned to support negotiations have been reallocated to deal with the coronavirus emergency response,” he added.
Keen argued that the transition period was not just designed to facilitate negotiations, it was also there to give businesses time to prepare for the future relationship. Whether or not a deal is struck, there will be major changes to the UK’s trading relationship at the start of 2021, such as new Customs documentation and procedures.
He continued: “In light of those things and with very little information from government on when restrictions on key sectors of the economy are likely to be lifted, and the as yet unknown economic damage done to the sector and wider economy, BIFA members are in no position to respond to a second massive shock if there is significant change in the terms of trade with the EU at the end of the year, because the government has stuck to its guns over the transition period.
“We believe that refusing to even consider extending the transition period is very risky and together with a growing chorus of Brexit commentators, think an extension to the transition period remains likely, and it is really only a question of ‘when'.”
Keen added: “The crisis caused by Covid-19 is delivering much greater understanding of the key role of freight forwarders to the authorities and the wider audience that rely on the commodities being delivered through international supply chains. Now in these very difficult times, it is imperative that that the government acts responsibly and listens to the freight transport sector.”
