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Parcel broker fears rising tariffs and red tape after PM’s speech

17 January 2017

May’s plan to abandon the EU Common External Tariff ‘will cost UK businesses £44bn and throw the baby out with the bath water’, says international broker.

Teresa May’s call to leave the Common External Tariff could lead to a 20% rise in the cost of exports warns global shipping expert Fastlane International.

The global parcel broker Fastlane International welcomed Prime Minister Teresa May’s plans for a ‘bold and ambitious’ Free Trade Agreement with the EU. But the London-based shipping expert warns that her declared aim of abandoning the EU Common External will cost UK exporters £44bn and lead to excessive delays and red tape for shipments at EU borders.

Fastlane’s Head of Consumer Research, David Jinks MILT, says: “Teresa May has called in her landmark speech for tariff-free trade with Europe, and for cross-border trade to be as frictionless as possible. This is a welcome and reassuring move. We very much hope Tariff-free trade, together with a customs agreement, will prove to be her line in the sand.”

However, Fastlane is concerned that Mrs May stated she does not want the UK to be bound by the Common External Tariff. In her speech, May said: “I do not want Britain to be part of the Common Commercial Policy and I do not want us to be bound by the Common External Tariff. These are the elements of the Customs Union that prevent us from striking our own comprehensive trade agreements with other countries.”

Says David: ‘Moving outside the EU’s Common External Tariff would mean the need to set our own tariff rates. That entails setting our own duties on 19,000 individual tariff codes across a huge variety of items - a move undoubtedly leading to increased border delays and red tape for British importers and exporters, and EU businesses looking to trade with the UK. It’s a frightening scenario that could result in an increase in the cost of imports of around 20%; £44bn on current UK business exports to the EU of around £220bn.’

Fastlane argues the Common External Tariff is largely a way of coding items so that there are not different rates of taxes to pay on the same item in different countries. Says David: “Fastlane supports a lot of the ambitions in Mrs May’s Brexit speech as being very positive for UK importers and exporters; there is undoubtedly much that can be improved in our trade with the EU and beyond. But abandoning the EU Common External Tariff is throwing the baby away with the bath water.’

Fastlane believes the imposition of new codes could result in a typical rise of 20% on the overall on an imported item due to:

• New red tape for businesses surrounding the introduction of UK tariff charges and codes;

• The imposition of ‘customs clearance’ charges from courier and logistics companies seeking to cover delays at borders - typically around £15;

• The need for Customs officials at UK and EU borders to constantly match-up UK and EU tariff codes and fees;

• Increased transport costs; as the UK outside the Common External Tariff would be a far less competitive and fought over market for international couriers and logistics providers.

For advice on current EU tarrifs see:  www.wedelivertheworld.co.uk/international-parcel-delivery