The UK will be Leaving the EU Customs Union Post-Brexit
After much speculation, the Government has now ruled out the UK remaining in the EU Customs Union post-Brexit.
Whatever your political views, this decision presents a challenge for many businesses trading in the EU. For over 40 years, businesses have had the luxury of knowing that any EU trade will be tariff and customs duty free. It is therefore almost a certainty that any cross EU border trading agreement currently in force will not contain any provisions dealing with the payment of customs duties or tariffs, nor who will handle the practicalities of clearing goods through customs.
So, what can be done? To avoid any disruption in trade, contracts may need renegotiating to deal with these unanticipated issues. Choosing the right time to start those renegotiations is crucial. The strength of bargaining power will change with internal pressures, such as supply and demand. External factors will also play a part, such as exchange rate fluctuations and the ever-looming presence of Brexit itself. Worst case scenario, the contracts may need terminating.
Our commercial team is helping a number of businesses prepare themselves for Brexit by reviewing their trading agreements. Forewarned is forearmed, and establishing where increased exposure lies regarding Brexit at an early stage means that any issues arising have a better chance of being properly managed.
If you’re trading within the EU and want to have a chat regarding how Brexit may affect those arrangements, please contact James Geary, or you can give us a call on 0345 070 6000.