Reports of a Post Brexit Free Trade Agreement Between the UK and USA

There has been a lot of talk in the media about a US / UK Free trade agreement post Brexit. Recent reports suggest that if Boris Johnson becomes Prime Minister this will be the first thing he will look to secure. However, how easy will this be? And how long will it take?  Some argue that the economic benefits to the UK will actually be quite small and be more beneficial to the US than the UK. It has also been commented that the US will also have the upper hand in that any agreement has to be in the interests of US firms or else what’s the point as there is no desperate requirement for the USA in the grand scheme of things. 

The Economist in 2018 also stated that one of the reasons for large scale investment by the US in the UK in the past was to access the EU Single Market a point made the US Chamber of Commerce. Therefore, in reality would the UK actually still be of interest to the USA?

What Progress has been made so far?

So what progress has there been so far behind the scenes, well the groundwork for a future deal began in 2017 with the establishment of US/UK Trade and Investment Working Group. In November 2018 President Trump notified congress that once the UK leaves the EU he intended to negotiate a trade agreement with the UK. 

The US then set out its specific negotiating objectives in Feb 2019. These objectives looked at addressing tariffs with non tariffs. For some UK companies opening up the US market could be very beneficial especially if trade tariffs were reduced to zero and other barriers to entry are lowered, however, the same applies the other way, whereby US firms unable to target the UK due to existing EU/UK tariffs and non tariff barriers could start importing into the UK. 

Concerns from the UK side

Some of the concerns raised in the UK concern the fact that the UK would need to relax certain rules around food hygiene as well as healthcare contracts. Although US firms already compete to deliver NHS contracts which go out for tender the issue is that the US uses different mechanisms for pricing medicines. There is currently a huge gap between what the NHS can afford, and the price certain US firms demand. This may be an area that President Trump will want to address before any deal is signed. Something that could impact on healthcare in the long term in the UK, The US may also demand that tariffs are scrapped on all US cars.  

It should also be noted that Mr Trump may not actually be President after 2020 and that the World may have changed again – therefore any chance of a quick deal being agreed and in place with the USA may take years to complete in reality, if at all!

For more information on the benefits and issues of exporting and importing using free trade agreements including:

• how and when to use them 
• paperwork for shipping and 
• the evidence needed to support them 
• Implication now under EU rules and in the future post Brexit

Please do not hesitate to contact us if you would like to know more.

Half Day Workshops Available

In the near future Independent Freights sister Company, Hooper and Co will be running a series of half day practical workshops on Free Trade Agreements (FTA’s). If you are interested or have employees who you may like to send, please do not hesitate to contact us.

Once the United Kingdom officially leaves the European Union, we will no longer be a part of the EU Customs Area. This has many implications, largely that the UK will have to write its own customs legislation, and trade with members of the EU will change significantly. Namely, freight shipping between the UK and the EU will become subject to customs formalities and procedures. Listed below are some of the biggest changes businesses will be subject to when importing and exporting goods after Brexit.

Licenses and declarations

• Any import and export licenses issued in the UK will no longer be valid in the EU.

• All movement of goods to the UK from the EU will require an export declaration.

• Excise goods, such as alcohol and tobacco, may require an electronic administrative document (eAD)

New charges

• Customs duties will apply to goods moving between the UK and the EU.

• VAT will be charged by member states when importing goods from the UK.

• Payment of VAT and cross-border VAT returns will be governed by new rules.

How can a freight forwarder that offer customs brokerage help?

Hiring a Freight Forwarder who can act as a customs broker will reduce stress during the post-Brexit changeover. A freight forwarder or custom broker’s job is to provide assistance and support in the area of specialist laws and regulations surrounding the import and export of goods. They prepare the customs documentation and liaise with airlines, shipping lines , cargo handlers and other carriers of freight.  They can be given power of attorney to sign legal documents, and handle any duties and taxes payable by their client. By hiring a freight forwarder who can offer the services of a customs broker, you won’t have to take as much time away from other aspects of your business, as you will be confident that you already have someone focusing on the legal side of your imports, exports, charges, and goods storage.