Brexit presents a chance!
The future of trade in a post-Brexit world was thoroughly discussed at a conference that was royally attended by industry and government executives from Belgium and the UK, as revealed by New Food’s Bethan Grylls.
As the King of Belgium’s representative, Princess Astrid is in the UK this week to spearhead an economic trip that will celebrate and strengthen the two nations’ long-standing trading ties.
More than 400 people, 214 businesses, and four days of events in the Greater London area make up this first “mission” of its kind since the pandemic’s start. Among those will be the chance for Belgian players in the UK to deepen their knowledge of retail markets and current and future exporting laws in the UK.
I was lucky enough to receive an invitation to attend a portion of the event on May 9, 2022, which was held at the Intercontinental in London, close to Hyde Park. Here, a variety of prominent figures from the UK and Belgium’s governments and business spoke to the participants. The main takeaway is that Brexit presents an opportunity.
Many of the presenters held this hopeful outlook, which was pleasant to hear when discussing trade talks.
Dominic Goudie, Head of International Trade at the Food & Drink Federation (FDF), declared, “I am utterly sick of talking about the negativity of Brexit.” Daan De Vlieger, Director of Global Trade Advisory at Deloitte, described Brexit as “still a challenge” and proposed that we talk about those obstacles while highlighting the opportunities.
During their seminars, Ilke Bliki, the Brexit Coordinator for Flanders Investment & Trade, and Vlieger succinctly outlined the issues. During their discussions, the laws of origin were emphasized in particular; Bliki compared it to “learning a new language.”
To put it mildly, the regulations that Brexit has imposed on trade, both present and future, are a bit of a pain. However, Bliki and Vlieger did an excellent job of outlining some of the major challenges along with workarounds. Along with the other speakers, they also highlighted the prospects that exist for Belgium and the UK in the event that trade is managed well.
What in the world are origin rules?
Before Brexit, the UK and the EU had a deal that allowed goods to enter and exit the country duty-free. Currently, a 12 percent duty rate is in effect.
Following the UK’s exit from the EU, trade ties will be governed by the terms of the Trade and Cooperation Agreement (TCA), which comes into effect in 2021 and can be read here. As long as it adheres to its tenets, the TCA permits individual member states to develop additional collaboration with the UK.
Businesses that seek to import and/or export goods to and from the EU without paying tariffs must abide by the rules of origin, which are governed by the UK’s agreement with the EU.
In order to qualify for a zero- or reduced-rate customs tariff, goods must be sufficiently manufactured or processed in the participating nations. Non-originating materials can also refer to materials whose origin is unknown. Non-originating materials are those imported from nations outside of the EU and the UK.1.
Nonetheless, a lot of ingredients, like sugar and a variety of herbs and spices, are supplied from outside the EU.
Thus, Vlieger asked, “Is it better to abandon the UK market?””Definitely not.”
The good news about the new deal, according to Vlieger, is that the duty also affects non-EU nations, which restricts competition. He also mentioned bonded warehouses and duty disadvantages as two strategies to reduce or perhaps completely eliminate tariffs.
Alright.But what does that actually mean?
The UK Government states that: “The importer in the EU may be eligible to claim Returned Goods Relief for goods that were imported from the EU and are being returned or redistributed in the EU without obtaining UK origin.”
Goods may be able to maintain their EU status if they entered the UK through the internal Transit procedure (T2) and haven’t been subject to any additional customs procedures outside of Transit or Customs Warehousing. This will enable the avoidance of EU customs formalities, such as taxes and levies.Alright.however, um…What is meant by that?
According to Vlieger, “Bonded warehouses permit the physical presence of foreign goods within the customs territory of the EU or the UK, as long as they are kept under administrative customs supervision and are not subject to duties.” A merchant need not decide what to do with the items until the final destination of the commodity is known. This can involve either re-exporting them from the region into the target market or allowing them to circulate freely within the community (upon payment of any applicable duties, if any).
However, makers of goods in the UK or the EU are able to avoid paying duties that they incurred prior to the UK’s exit from the EU thanks to the drawback clause that was agreed upon under the TCA (for the time being, temporarily). Manufacturers and traders can effectively remove duty charges from the entire supply chain by combining inward processing relief for incoming raw materials with duty preference for the end product (if the local manufacturing operation is deemed appropriate).
Click here to learn more about these efforts.
Bliki’s main takeaway was to “know your supply chain.”She said, speaking to companies wishing to do business in the UK, “Be aware of your responsibilities before entering into commercial agreements.” Speak with every link in your logistics chain, and send nothing until this is finished. A minor miscommunication could cause delays.
Vlieger also emphasized how crucial it is to comprehend and use the correct commodity codes. For instance, the code for chocolate powder and chocolate blocks differs, and a single mistake could result in fines.
I noticed that different codes lead to different duties, therefore it’s possible that recipes will change to assist cut expenses. It will be intriguing to observe
One UK address is required under new labelling regulations.
The labeling regulations that will take effect in October are another significant new ruling that will have an effect on the UK’s trading partners.
According to the new law, packaged goods sold in the Great Britain market must have a UK address as of October 1, 2022. This will need to be the UK importer’s address if the company doesn’t have a presence in the country. A PO box won’t work as a valid postal address; this needs to be a real address.Since just one UK address will be accepted, situations when businesses have multiple UK importers are anticipated to provide challenges.
Bliki brought up this problem and offered the idea that one solution would be to design a new label for each business, though she acknowledged that this isn’t always an option. Partnering with a UK company that can manage all importers and serve as a primary point of contact is an additional course of action.
Vlieger suggested establishing a local establishment in the UK as a means of circumventing certain Brexit-related issues.There will probably be some differences in the new legislation between what is permitted in the EU and what is permitted in the UK. The recent EU ban on the food ingredient titanium dioxide (E171) is one instance of this. For these variations,