BREXIT Update No. 8

BREXIT Update No. 8

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28/05/2019

“A week is a long time in politics.” The EU elections delivered some predictable results (in the UK at least) with The Brexit Party doing as well as expected. Some magical mathematics followed with both sides, LEAVE and REMAIN, claiming victory. Only goes to show how split the UK still is.

Now we have a Conservative leadership contest with an ever growing list of contenders.

What does this all mean for Brexit planning? Options are reducing and seem to be:-

Another extension: Not sure new PM would want to repeat the past. A short implementation extension to 1st January 2020 perhaps.

Revoke art.50: No time to run a 2nd referendum so revoke comes in to play - looks like political suicide

No deal: Has never been the preferred option but when you put it in context of the other two…suddenly it doesn’t look so bad.

It is becoming difficult to see how a new PM could avoid NO DEAL, at least as a default position should the EU not bend further.

Leaving without a deal does not mean that we will never have a deal. Is that the end of the world or the start of a new one? The problem with Brexit is that you don’t know if your parachute works until you jump out of the plane! A Customs Union is often suggested as a solution. This has serious downsides as it would limit our ability to negotiate trade deals outside of the EU and it may still require paperwork (as Switzerland and Turkey do today, to name but two).

This doesn’t mean that a Customs Union will not work. There is not a standard template for a CU, they are negotiated. There are trade-offs. The true solution seems to lie somewhere between an FTA and a CU. This could come down to specific products and does not need to be a ‘one-size-fits-all’. Time will tell.

As March and then April deadlines approached it became normal to wait for the next Customs update and adjust accordingly. So, assume the position and wait for more news from HMRC? No! Customs are largely done. They created TSP (Transitional Simplified Procedure), they have always had CFSP (Customs Freight Simplified Procedure), they introduced a number of easements and they relaxed many of the processes. In short, their work is done. Now it is up to you to get your ducks in a row, you have 5 months! Don’t wait for the next update or you’ll be waiting for something you already have.

Sensible businesses are planning for NO DEAL. This can be a hard sell internally as previous efforts yielded little result and those that did nothing seem somehow vindicated. Those that did nothing were not visionaries, they just got lucky! Luck nearly always runs out eventually. Make a plan, test the plan and be ready for 31st October – anything else is a bonus.

Robert Hardy, Commercial Director, Oakland International

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