Compromise between EU and Great Britain scares away tariffs – and some worries from domestic entrepreneurs.
The domestic economy welcomed the “last minute deal” between the EU and Great Britain with relief, because a hard Brexit would have made trade relations extremely difficult. The present agreement regulates the future customs regulations, a very important area for companies from the Sauerland; greatest advantage:
“There are no customs duties on EU goods in the UK,” explains Jens Bürger. Conversely, exports from the UK to the European Union also remain duty-free, the IHK Arnsberg employee continues. Companies that are already doing business with non-EU countries such as Switzerland should not have any major problems handling the formalities. Anyone who has only traveled within the EU so far has to learn a little – but the processes should quickly become routine if everything goes as planned, says Bürger. The 1250 page (!) Long contract also regulates the aspect of “quantities of goods”: There are neither export nor import restrictions between the EU and UK. “That was also very important to the local entrepreneurs – and is now contractually fixed, according to the IHK man.
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More effort for the shipment processing
One of the people who makes sure that goods get to Great Britain – and from the islands to the EU, is Christoph Dahlmann. “The fact that no customs duties are levied is a very decisive advantage for us and our customers”, the managing director of Allgemeine Land- und Seespedition (ALS), based in Hüsten, also welcomes the compromise found. He and his employees already have a lot of experience in matters of “non-EU”: “ALS has been certified in customs matters since 2013 and has the status of AEO”, reports the Hüstener. As an “authorized economic operator”, his freight forwarder can, among other things, create electronic export declarations for customers – and handle import customs clearance in the country of destination via customs agents. Nevertheless, Dahlmann expects more effort to process the shipment, combined with rising costs for its customers. These were informed before Christmas – in a fair dialogue, emphasizes the freight forwarder: so that everything can settle, they are granted an eight-week transition period during which the freight prices are individually agreed. It is particularly important to clearly document transport chains in order to avoid longer idle times or delays during controls.
In the first days of January, the situation turned out to be not as bad as feared, says Christoph Dahlmann with a view to the pre-Christmas mass jams of trucks in front of many English ferry ports. At that time, the mutation of the coronavirus that had just been discovered – combined with “stockpiling” on the Brexit home stretch – caused chaos. Because nobody knew whether there was still a deal, double or even triple quantities of goods were often moved, explains the Hüstener. Such a hamster does not seem to be necessary any more, although production, which will pick up again from mid-January, is likely to generate more “traffic” than currently.
As a trading partner among the top ten
Keyword “traffic” – how important is the kingdom for domestic companies, and which industries are particularly closely linked to the economy on the island? We have Dr. Volker Verch asks: “Great Britain is certainly an important trading partner for the companies in the region, in the ranking among the top ten”, the managing director of the Westphalia-Mitte business association (and many more) with its headquarters in Neheim and Hamm classifies it the importance in this regard has already declined: companies have already adjusted to the expected difficult conditions in the past few years and reacted accordingly drastic, “says Dr. Verch. The “last minute” agreement is correspondingly important for domestic companies. “This trade agreement, which was agreed in the last few days of last year, will cushion high export losses because tariffs can be avoided and friction losses in trade can be kept as low as possible. So this post-Brexit deal is definitely important for the domestic industry, ”he says – and adds to the” tariffs “aspect:
“Customs formalities mean a loss of time and therefore money. They are a bureaucratic hurdle that ties up capacities in companies and thus incurs costs. And goods that are waiting for clearance at the border are missing from production. This means that they may also cause costs – through machine downtimes or because delivery dates cannot be met. “
Some degree of stability and security
In conclusion, what will be more difficult in the future – despite the agreement – and may there be any relief?
“The agreement does not completely prevent an increase in export costs, because the administrative costs for border clearing, for example, will rise. So this agreement only ensures that the rise in export costs is not so high that many companies have to fear serious consequences. In a crisis phase like the one we are currently experiencing, however, any increase in costs has fatal consequences for a number of companies. The equity is often used up to secure the existence of the company and to keep the employees. Many companies in the region currently lack the scope for rising costs, “says Dr. Volker Verch, dampening all too great optimism. Nevertheless, the agreement also offers a certain degree of stability and security.
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