Competere – Written Evidence (TIG0004)
Improvements to EU-UK TCA
There are a number of improvements to the UK-EU TCA which would lead to greater trader simplification and facilitation. This includes the following key areas:
EU-UK TCA Rule of Origin
The restrictive rules of origin of the EU-UK TCA are causing trader issues. In many cases rules of origin mean that goods in GB or EU which have content from outside of the Parties may not qualify for the preferential rate of zero for the trade agreement. This significantly lessens the value of the TCA.
In addition, goods which move from the EU to GB in free circulation, and then move on to NI lose their originating status in the EU, and in GB (if insufficient processing takes place there). This means that EU tariffs must be paid for GB to NI movements in these cases.
We suggest a number of solutions:
A significant gap in the EU UK TCA are any provisions on mutual recognition. These will be important in lowering the level of checks and process required for trade and will significantly simplify trade between the parties.
At the very least mutual recognition of conformity assessment (testing) should be sought, but the UK should seek mutual recognition of market surveillance and indeed where possible underlying product market regulation.
There are precedents where the EU has agreed, in certain cases mutual recognition of underlying product regulation, such as CETA, the NZ-EU veterinary agreement, and the EU-US Insurance covered agreement.
Customs Facilitation and Managing UK Border
The TCA has a chapter on customs and trade facilitations. These have not been fully explored and they should be fully explored.
On the other hand, the UK has placed easements on its border through the Border Operating Model (BOM) which delayed the need to submit frontier declarations at the border until January 1, 2022. We are concerned that traders will not get ready for the requirement for frontier declarations unless they truly believe that these will be required. As long as the easement is in place, the UK border is not secure. In addition our trading partners with whom we are making substantially progress on trade deals will ask why EU imports are being preferred. While this was acceptable for a temporary period, any further delay would not be welcomed.
We believe that the history of the easements in both the GB-EU and GB-NI context shows that traders do not use the time to get ready when easements are extended. However when those requirements are put in place albeit with “training wheels” traders do make efforts to get ready. Both government systems which are due to take effect from January 1, 2022 can be run in ways that limit the risk of trucks stopped at the port for a limited period while traders still have to do frontier declarations. This will give much greater clarity and security to the border.
The UK is one of the world’s leading exporters of services, and the services chapter of the TCA is limited. We would argue for significant deepening of the services chapter along the following dimensions:
27 October 2021