The British Retail Consortium (BRC) has called on Brexit negotiators to reach a tariff-free trade agreement – and a fair deal for customers – in ongoing trade talks with the EU. Meanwhile, the EU has warned that even with an agreement new customs formalities will come into place from January - and has outlined in a new document how businesses should prepare.
The BRC says in a new report, A fair deal for consumers: why tariffs are bad news for UK consumers, that unless a deal is agreed, 85% of food imported from the EU will attract tariffs of more than 5% under the UK’s government’s schedule that was published in May - with the end result of making food more expensive for shoppers. Currently, half of all food consumed in the UK, and 30% of food sold in supermarkets, is imported. Of that, 79% is from the EU. Much of that food – from strawberries to salad leaves – is perishable so could not realistically come from more far-flung markets.
If no trade deal is reached, the UK tariff schedule would add 48% to beef mince imports, 16% to cucumbers, 57% to cheddar cheese. The average tariff on food imported from the EU would be more than 20% - and that, says the BRC, would be passed on to shoppers from January 1 2021, along with an average 12% tariff on clothing and textiles imports. It is therefore calling on the government to reach a deal that does not lead to price increases in shops and online, and that minimises the effect of non-tariff barriers, such as regulatory checks. A deal, it says, must be reached quickly.
Andrew Opie, director of food and sustainability at the BRC, said: “The next few months are critical to the living standards of millions of people in the UK. For decades British households have enjoyed great value, quality and choice, making it a great place to shop. However, without a tariff-free deal with the EU, the public will see higher prices in supermarkets from next year, squeezing millions of families already impacted by the current economic downturn. This is not the fair deal that consumers were promised.”
He says that a deal that puts customers first is vital to avoid far greater disruption than that seen in the run up to Covid-19 lockdown.
William Bain, the BRC’s Europe and international policy advisor, outlining the changes that would be seen, said that if no deal is reached, goods movements between Great Britain and the EU would incur tariffs for the first time since December 31 1972, and added: “New red tape barriers will come, whatever is agreed.” He added: “We know change is coming.” He said that no deal was also likely to mean delays at ports including Dover and the Eurotunnel embarkation point in Folkestone as well as at the French port of Calais.
And Aodhán Connolly, director of the Northern Ireland Retail Consortium, said that the current Northern Ireland protocol, which will also apply if no deal is reached, will introduce frictions in trade between Great Britain and Northern Ireland for the first time in a way that mean new systems must be developed. “We have half the discretionary income of GB households and we can’t afford the cost rises that come with this,” he said. He added: “The people who are going to suffer most because of these cost rises will be those people who are most economically vulnerable.”
The BRC report comes as the European Commission yesterday spelt out some of the changes that will come for UK citizens regardless of any dealing in an official communication, Getting ready for changes. In it, it says: “As of 1 January 2021, the transition period allowing for the temporary participation of the United Kingdom in the EU Single Market and Customs Union will cease, thereby putting an end to the free movement of persons, goods and services. Leaving the Single Market and Customs Union will lead to additional barriers to trade and to the cross-border mobility of people, and adjustments will be necessary both on the side of the Union and of the United Kingdom. By leaving the Union, the United Kingdom is also leaving all Union international agreements, automatically and by law.
“If not yet done, public administrations, businesses and citizens in the Union must urgently take all the necessary readiness measures to prepare for these changes with a view to minimising the cost of disruptions as much as possible.”
Those changes include customs formalities that will apply to all goods coming into the EU and leaving the EU for the UK, which will take place even if there is a free trade agreement providing for zero tariffs and zero quotas on goods, with customs and regulatory cooperation. The commission said that customs authorities would treat the UK as a third country, with controls that are “likely to lead to increased administrative burdens for businesses and longer delivery times in logistical supply chains.”
For example, EU businesses wishing to import from or export to the UK will have to have an Economic Operator’s Registration and Identification (EORI) number in order to go through customs formalities, while UK businesses will need an EU EORI number, rather than a UK one, in order to export to or import from the EU.