No deal Brexit brings big costs

Importers would be hit by red tape and tariffs

Fruit, vegetables and dairy would be subject to tariffs under a no deal Brexit

FIRMS importing goods from the EU could face increased costs and reels of new red tape, according to UK government technical papers on how to prepare for a no deal Brexit.

Should the UK fail to make a deal with the European Union on its withdrawal from the trade bloc on 29 March next year, businesses importing goods – including food products – will need to introduce new procedures to continue trading with the Continent.

In the event of a no deal Brexit, customs checks on goods from the EU will be introduced at the UK’s borders.

Government has suggested importers put steps in place to “renegotiate commercial terms” to reflect changes in customs procedures, as well as “any new tariffs” that may apply, and consider employing the services of a professional customs broker.

The technical papers reveal that in the event of a no deal, the UK intends to trade with the EU on non-preferential World Trade Organization (WTO) terms, which would introduce tariffs on goods currently subject to free trade, pushing prices higher.

Since the UK Government published its guidance, WTO director general Roberto Azvedo has warned its ambition to trade under WTO rules from day one is “not realistic” as other nations would seek to increase their market share. This would put the UK in uncharted trade territory.

A no deal departure would also affect tobacco regulations, which currently fall under EU jurisdiction. Following a no deal Brexit, new picture warnings would need to be applied to tobacco products produced after 29 March as the images currently used on packs are owned by the European Commission.

Dominic Raab, Secretary of State for Exiting the European Union, said the government is “stepping up the pace and the intensity of our negotiations, and I am confident a good deal is within our sights.”