FDF director general Ian Wright said: “The UK government’s drive for greater clarity on the Brexit process is most welcome. The proposals for an interim customs regime, if they can be agreed, go some way in protecting business from a cliff-edge.
“FDF’s priority is to ensure that our access to EU markets is not undermined during the transition period. Ensuring a single point of change would help to minimise unnecessary disruption for businesses that have established trading relationships with the EU.”
The government’s bigger challenge would be maintaining the benefits of the Customs Union and the Single Market, Wright added.
“The real challenge will then follow in designing and negotiating a model that maintains these benefits beyond the transition period, delivering the same ease of trading that UK food and drink currently enjoys with the EU27, with zero tariffs and no new regulatory or other non-tariff barriers,” Wright said.
‘Import and export’
“As the UK’s largest manufacturing sector, our success is inextricably linked to our ability to import and export raw ingredients and finished goods across borders. Nowhere is this more the case than with our Irish neighbours.”
The FDF’s comments followed the government’s plan to use a time-limited customs deal between the UK and the EU. It announced the plans on Tuesday (August 15) in the first of a series of “future partnership papers”.
The Confederation of British Industry (CBI) said the planned interim Customs Union was “encouraging”.
CBI deputy director general Josh Hardie said: “It’s encouraging to see that these papers propose a time-limited interim period, and a customs system that is as barrier-free as possible. Business wants to see as frictionless a customs system as possible, with a strong emphasis on digital systems that make it easier to trade.
“We at the CBI have always been clear that new ideas on crucial issues like this should be brought to the table quickly. But, the clock is ticking and what matters now is giving companies the confidence to continue investing as quickly as possible.”
‘Confidence to continue investing’
The government should focus on delivering a single-step transition, so that businesses don’t have to adapt twice, Hardie added.
The FDF and CBI’s comments came after Brexit secretary David Davis revealed his plans for a time-limited Customs Union between the UK and the EU. The interim deal would be in the interests of both the UK and the EU, Davis wrote in City AM.
“To avoid any unnecessary disruption both sides should seek to agree on an interim period early in the negotiations,” said Davis.
“That would be a strong indicator to all of our businesses and citizens that politicians on both sides are serious about finding a constructive outcome that works for all involved. Doing so is our shared duty. I am confident that we can achieve this. For this is an area where there is already significant common ground between the UK and the EU.”
Meanwhile, the European Parliament’s chief Brexit negotiator Guy Verhofstadt responded to the plans on Twitter. He said: “To be in & out of the Customs Union & ‘invisible borders’ is a fantasy. First need to secure citizens rights & a financial settlement.”
The government planned to reveal more details about its proposals for the border between Northern Ireland and the Republic of Ireland today (August 16).
Key questions over an interim Customs Union deal
- How long will it last?
- What will it mean for import tariffs?
- What will happen afterwards?
- Will the EU accept the proposal?
- How will the EU respond to the proposal?