Brexit Bulletin, 17 August 2020

Aug 17, 2020

This week’s Brexit round-up covers the meeting between the UK Prime Minister and the Taoiseach in Belfast, while we also look at the new customs arrangements for goods moving from Britain to Northern Ireland next year and who it applies to.  We also bring news of the UK government’s warning to medicine suppliers to start stockpiling medicines while the UK and Japan are hopeful a trade agreement can be reached very soon.

Taoiseach and UK leader meet in Belfast

In their first meeting since becoming Taoiseach, Micheál Martin and UK Prime Minister Boris Johnson met in Northern Ireland last week.  According to Mr Martin, a desire to reach a sensible Brexit agreement emanated from the meeting. 

The two leaders met to discuss the impact of COVID-19, the Brexit negotiations and the future UK/Ireland relationship. In their post meeting comments, both said they had agreed to work to put structures together to ensure the relationship is not “lost” and is instead nurtured and developed further.  Both Mr Johnson and Mr Martin agreed that the last thing either economy need is another shock in addition to COVID-19 so it was in everyone’s interest to agree a free trade agreement between the EU and the UK.

Who should use the Trader Support Service?

This week we bring you further details on who can use the Trader Support Service; the new system launched by the UK government to support customs arrangements for goods moving from Britain to Northern Ireland when the UK leaves the EU customs union on 31 December 2020. 

From 1 January 2021, businesses who:

  • move goods between Britain and Northern Ireland, or bring goods into Northern Ireland from outside the UK;

  • act on behalf of someone to move goods between Britain and Northern Ireland, or bring goods into Northern Ireland from outside the UK;

  • are based in Northern Ireland and receive goods from outside of Northern Ireland;

  • send parcels between Britain and Northern Ireland, or bring parcels into Northern Ireland from outside the UK, using Royal Mail or an express operator.

can use the Trader Support Service.  The service, which is costing £355 million, will be free to use and will provide businesses with support and guidance on how to meet any new customs obligations. Businesses can also use the system to have customs declarations completed on their behalf.  Businesses that are interested in using the service should sign up for further information.  

Government warning to stockpile medicines in case of no-deal

With a significant percentage of medical supplies entering the UK market from the EU, medicine suppliers in the UK have been strongly urged to hold additional stocks of medicines in the UK to buffer against any disruption Brexit might bring come 1 January 2021, when the transition period ends.  

In a letter to medicine suppliers published last week, officials in the Department of Health and Social Care said that while they recognise that global supply chains are under significant pressure because of Covid-19 they are “asking suppliers to put in place flexible mitigation and readiness plans in preparation for new border and customs procedures”.

Medical suppliers have also been asked to confirm what their contingency plans are for the end of the transition period.  This call from the UK government comes amidst continued uncertainty as to what form the relationship between the UK and the EU will take come 1 January 2021.  The UK has said it will not extend the transition period beyond 31 December 2020 to reach an agreement with the EU.

UK/Japan trade deal in the making

The UK and Japan are hopeful that the outline of a post Brexit trade deal can be reached between the two countries by the end of this month.  The UK government have said that such an agreement could increase the UK’s trade with Japan by about £15.2 billion in the long run and increase worker’s wages by £800 million.

Textiles, agriculture, and the services industry are just some of the sectors set to benefit from the deal.  The UK would also like to secure agreement on the free flow of data between the countries to support new areas such as Artificial Intelligence.

The UK estimate that reductions in tariffs on goods exported to Japan could be worth over £30 million each year in the long run. 

Both sides are eager to put a formal agreement in place before the end of the year when the post-Brexit transition period expires.  Otherwise trade between the two countries will revert to World Trade Organisation rules which could mean significant customs duties.

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