Written submission from Wanyu Chang, Robert Elliot, Yangjun Han (EUT0016)
Submission to the Business and Trade Committee Inquiry on UK trade with the EU
Wanyu Chung, Associate Professor of Economics, University of Birmingham and CEPR Research Affiliate
Robert Elliott, Professor of Economics, University of Birmingham
Yangjun Han, Research Fellow, University of Birmingham
We submit this evidence as academic researchers studying customs agents, trade facilitation and firm-level export behaviour using transaction-level UK customs data. Our evidence focuses on the inquiry’s question concerning further UK–EU cooperation on customs arrangements, trade facilitation, the border and digital trade. We argue that customs agents should be treated as part of the institutional infrastructure of UK–EU trade. They translate customs rules, documentation requirements and border procedures into operational compliance for firms, especially firms without in-house customs expertise. Our research shows that customs agents facilitate the majority of UK non-EU export value, help firms enter and remain in export markets, and become more important when trade policy uncertainty rises. Although much of our empirical evidence concerns UK non-EU exports, it is directly relevant to UK–EU trade because, since Brexit, UK–EU trade has depended on customs declarations, documentation and border compliance processes in which agents often play a central role. UK–EU customs cooperation and border digitalisation should therefore not only focus on formal rules and government systems, but also on whether firms and their agents can use those systems efficiently.
Our research using UK transaction-level customs data shows that more than 85% of UK non-EU export value is facilitated by customs agents (Chung et al., 2026). This means that most exporters do not interact with customs procedures only through their own internal capacity, but through intermediaries that submit declarations, manage documentation and help firms comply with border requirements. While agent-mediated trade is widespread, it remains concentrated. A relatively small number of agents account for a large share of agent-mediated trade, while many trader-agent relationships are short-lived or low value. This matters for policy because customs agent capacity, quality and market structure can affect the resilience of the trading system. UK–EU customs cooperation should therefore treat customs agents as part of the practical infrastructure of trade, alongside firms, ports, carriers and government border systems.
Our research shows that firms use agents both to explore new trading opportunities and to draw on agents’ existing market-specific expertise (Chung et al., 2026). In practice, this means that agents can help firms enter unfamiliar markets, introduce new products, or trade in areas where the agent already has experience with customs procedures, documentation and destination-specific requirements. This role is particularly important for firms that do not have extensive in-house customs expertise. For these firms, access to a capable customs agent can reduce the fixed cost and uncertainty of exporting. Conversely, difficulty accessing suitable agent support may discourage firms from entering new markets or adapting to new border requirements. This suggests that customs cooperation and border digitalisation should not be assessed only by whether formal rules are simplified, but also by whether firms and their agents can use the resulting systems effectively.
The 2016 Brexit referendum provides evidence that customs agents act as an adjustment channel when firms face trade policy uncertainty. Our research finds that firms with greater pre-referendum exposure to EU markets reorganised their use of agents in non-EU markets after the referendum (Chung et al. 2026). More exposed firms experienced a smaller contraction in the number of agent relationships and made more intensive use of the agents they continued to work with. This suggests that firms strengthened their access to customs expertise in anticipation of possible changes to trade agreements, market access and customs procedures. For Parliament, the implication is that customs agent capacity matters for resilience. When border rules change, firms do not adjust only through internal compliance teams; many adjust through the intermediaries that help them interpret and implement new requirements.
Our research on the 2012 EU-US AEO mutual recognition agreement (MRA) shows that the benefits of trusted trader cooperation can extend beyond firms that are directly certified (Chung et al., 2025).[1] Firms using AEO-certified customs agents performed better than comparable firms using non-certified agents. They were more likely to begin exporting new products, less likely to drop existing products from their export portfolio, and experienced higher export values in continuing product relationships. In particular, relative to firms using non-AEO agents, firms exporting through AEO-certified agents were associated with a 31 percentage point higher probability of introducing a new export product and a 10 percentage point lower probability of discontinuing an existing export product. For continuing firm-product relationships, the MRA was associated with a 11% increase in export value to the US between 2011 and 2013. This matters for UK–EU cooperation because trusted trader schemes should not be evaluated only by counting directly certified firms. If certified agents transmit benefits to the firms they represent, then AEO cooperation can support wider trade participation, including among smaller firms that may not have the capacity to obtain certification themselves.
The main trade-off is between regulatory autonomy and closer alignment of border systems. Divergence may allow the UK to design bespoke border processes, but it can also impose duplicated compliance costs on firms and agents trading with the EU. Conversely, closer alignment can reduce administrative frictions, especially where UK and EU systems use compatible data standards, documentation requirements and digital processes, but it may constrain the UK’s ability to develop distinct procedures. Our evidence suggests that the practical benefits of closer alignment are likely to be substantial because firms commonly rely on customs agents to manage compliance, and these agents operate across many firms, products and destinations. There are also risks associated with relying heavily on intermediaries, including uneven service quality, market concentration, the pass-through of compliance costs to smaller firms, and the possibility that smaller agents may struggle to adapt to new digital systems. This reinforces the case for monitoring customs agent capacity and ensuring that border digitalisation reduces administrative burdens rather than simply shifting them onto firms and intermediaries.
Our research pipeline can help inform further discussion on the following issues:
May 2026
References
Chung, W., R. Elliott and Y. Han (2026), Customs Agents in International Trade, CEPR Discussion Paper No. 21444, CEPR Press, Paris and London. https://cepr.org/publications/dp21444
Chung, W., R. Elliott, Y. Han and A. Navas (2025), Customs Agents and Trade Facilitation, CEPR Discussion Paper No. 20482, CEPR Press, Paris and London. https://cepr.org/publications/dp20482
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[1] The EU-US AEO-MRA was implemented on 1st July 2012 and applied to the UK as an EU member at the time.