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What the Brexit White Paper on the UK’s future relationship with the EU says about trade, ecommerce and digital

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The Brexit White Paper has received a broadly positive welcome from retail, marketing and logistics organisations working in ecommerce and multichannel retailing. But there’s also a demand for more detail.

The paper, The Future Relationship between the United Kingdom and the European Union sets out, among other details, the government’s aspirations for trade with the EU, whether in goods, services or digital services, including ecommerce. 

What the White Paper says about trade and ecommerce 

The aim is to gain “continued frictionless access at the border to each other’s markets for goods” within a free trade area for goods that would protect just-in-time supply chains and mean products that are approved and authorised in either market would be able to be sold in the other.

A facilitated customs arrangements would remove the need for customs checks and controls, with goods able to travel freely between the UK and EU, free of tariffs, while the UK would be able to set tariffs for its trade with the rest of the world. 

But there would be a separate relationship for digital and for services. New arrangements for digital trade would “enable the UK and the EU to respond nimbly to the new opportunities and challenges presented by emerging technologies, recognising that the UK and the EU will not have  current levels of access to each other’s markets.” There would be commitments to “open and fair competition”, including agreed rules on state aid and cooperation on competition, as well as a commitment “to maintain current high standards”.

While the UK would not be part of the Digital Single Market, it is proposing a digital relationship covering digital trade and ecommerce and digital technology as well as telecoms and broadcasting. That allows for the free flow of personal data between the UK and EU, recognition of equivalent forms of electronic ID and authentication as well as protections for a free, open and secure internet.

“The UK believes that trade should promote the development of new technologies, such as artificial intelligence (AI) and notes that they are vulnerable to non-tariff barriers,” says the paper. “New and emerging technologies are also creating new and shared challenges. The UK therefore proposes exploring new models for regulatory cooperation between the UK and the EU to tackle these shared challenges and advance shared objectives in the future.”

The retail response

Helen Dickinson, chief executive of the British Retail Consortium says a frictionless customs system is vital for retail businesses and to ensure food supply chains are maintained. “It is encouraging to have seen some progress within the white paper, but the retail industry still needs clarity on how this will be facilitated,” she said. She said that more clarity was needed on tariffs, customs – and how the customs tracking system would work. 

She added: “The retail industry is supported by a high percentage of employees from across the European Union. In the Midlands alone, some 170,000 EU nationals are employed in retail in various roles. A mobility framework which allows retailers access to European employment markets is essential if the industry is to access the numbers of employees it needs.”

The marketing response

The DMA says the most important issue for marketers is the continued free flow of data, and it’s reassured by what it sees in the paper.

Chris Combemale, chief executive of the DMA Group, said: “The DMA supports the Government’s position on the free flow of data in the Brexit whitepaper. We have consistently advocated for a robust UK-EU deal on data protection that would ensure organisations could exchange data freely, much as they do now. This must include continued close cooperation between the ICO and EU data authorities in addition to regulatory alignment. It’s reassuring to see the UK government have listened to the concerns of our industry and is proposing a way forward that will enable the UK to remain a world leader.”

The delivery and logistics response

The Freight Transport Association says the solutions offer encouragement for the logistics industry. Its deputy chief executive James Hookham says the white paper offers “positive proposals” and “should give businesses, which have been worried about a lack of clarity over future trading arrangements, some level of reassurance. It is now Europe’s turn to step up and deliver a similarly supportive, encouraging plan which will minimise the barriers to continued frictionless trading arrangements are the UK leaves the EU.”

But, he said, the devil would be in the detail. “Of most concern is a lack of clarity over how road transport will be able to operate in the future – a permits system is mentioned in passing, but is really not an option if the thousands of vehicle movements which currently happen to and from the Continent and Ireland are to continue with minimal delays. There is no point in having the most facilitated customs agreement in the world if a permits quota means that trucks cannot move goods freely across borders.  

“The paper needs to provide more clarity on the status of skilled EU workers after Brexit – with more than 45,000 HGV drivers from Europe currently working in the UK, loss of their working status would leave the industry severely exposed.  The framework for the mobility of workers between the UK and EU needs more detailed explanation, to provide reassurance to employers and those relying on continuity of deliveries for the resilience of their own businesses.” 

Self-identifying pro-Remain parcel shipping specialist ParcelHero says the white paper is “surprisingly good news” for British exporters. It welcomes the support for a common rule book for trade in goods. “The phased introduction of a new facilitated customs arrangement, that would remove the need for customs checks and controls between the UK and the EU, as if they were a combined customs territory, is a hugely sensible and pragmatic approach,” says David Jinks, ParcelHero’s head of consumer research, who also says a free trade area for goods would avoid friction at EU borders.

But he has reservations about the loss of free access to online services. “Many of our customers engage in regular ecommerce with EU businesses and citizens. The new paper specifically says there will be new arrangements on digital trade, including ecommerce, recognising that the UK and EU will not have current levels of access to each other’s markets. This could be a major loss of access to lucrative markets for some of Britain’s world leading ecommerce businesses.”

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