Britain's foreign trade could 'fall off a cliff' after Brexit if officials can't replicate 70 current EU deals in time, MPs warn

• e-mail

Britain foreign trade could fall off a 'cliff' if officials cannot replicate 70 current EU deals in time, MPs have warned today.   

Ministers want agreements struck while the UK was a member of the European Union to continue after it has left the bloc in March 2019 and say no country has yet objected.

But MPs on the Commons International Trade Committee warned that it could be naive to assume that means roll-over of the deals is 'actually certain to occur'.

Trade Minister Greg Hands will be grilled by MPs on the risk of a collapse in trade later, before Britain's top trade negotiator Crawford Falconer also gives evidence.

Britain foreign trade (from ports such as DP World London Gateway, pictured) could fall off a 'cliff' if officials cannot replicate 70 current EU deals in time, MPs have warned today

International Trade Secretary Liam Fox (pictured last week in Downing Street) wants trade agreements struck while the UK was a member of the European Union to continue after it has left the bloc in March 2019 and say no country has yet objected

In today's report, the MPs said there is a 'disturbing lack of precision and clarity about the legal mechanism whereby the Government envisages EU trade agreements with some 70 countries being rolled over'.

The Government must show it has a 'legally watertight and practically viable strategy' for avoiding a 'cliff edge' in trade.

The MPs warned: 'The Government would risk appearing naive if it assumed that assent-in-principle to roll over an agreement constitutes a guarantee that roll-over is actually certain to occur at the point of Brexit.

'It must be realistic about the steps that are necessary to get new agreements in place - and have contingency plans for the eventuality that the third countries concerned change their minds.'

The MPs said the Department for International Trade had originally indicated it wanted to roll over the deals in place with all countries by the point at which the UK formally leaves the EU in March 2019.

But it had now sought agreement that all parties would instead interpret terms such as 'European Union' or 'EU member state' in the existing deals as including the UK during the transition period, expected to last around two years after leaving the bloc.

'While we welcome the Government's willingness in this respect to be pragmatic, it is difficult not to see this as an admission that its policy of negotiating new agreements by March 2019 might not be achieved and may be failing,' the MPs noted.

Trade committee chairman Angus MacNeil (file image) said ministers needed to make sure they could roll over existing trade deals as planned

The committee also called for clarity about exactly how many deals would be affected by Brexit.

While the EU has about 40 trade deals with 70 countries, it is also party to scores of other agreements and the total number of trade-related agreements could be 759 with 168 countries.

Committee chairman Angus Brendan MacNeil said: 'The Government is making much of the trade agreements it plans to make after Brexit, but first it needs to give us confidence that the existing agreements, on which businesses, consumers and trading partners alike rely, can be rolled over so the UK can benefit in its own right.

'Unless an agreement is reached with our trading partners in the coming months, a significant economic price will have to be paid. '

International Trade Minister Greg Hands said: 'The report recognises the priority that the Government has given to ensuring continuity of our trade arrangements as we leave the EU, including in providing certainty to businesses, consumers and investors.

'We have always been clear that this work would take into account the terms and timing of any implementation period currently being negotiated with the EU.

'This is a technical exercise, not an opportunity to renegotiate terms.

'We have already held discussions with more than 70 countries, unlike the committee, and none have displayed any interest in disrupting trade flows, or in erecting barriers to trade that do not currently exist.'

What customs arrangements do Norway, Turkey and Switzerland have with the EU?

Theresa May has insisted Brexit means quitting the EU customs union - so the UK can strike free trade deals with other countries.

But  this means that customs checks on goods will probably need to be carried out at the border - creating the spectre of long border queues.

Critics of the PM's approach say the UK should stay in a customs union with the bloc to avoid these hard border controls.

Below are three customs deals the EU  has done with countries outside the bloc:

The Norway Option: 

Norway voted narrowly against joining the EU in 1994, but shares a 1000-mile border with Sweden which is in the bloc.

The Norwegian government decided to negotiate a deal which gave it very close ties with the EU. 

It is part of the EU single market which means it must accept EU rules on the free movement of people.

But it is not in the customs union - meaning it sets its own tariffs on customs coming from outside the EU and so must carry out border checks.

There are some 1,300 customs officials who are involved in policing the border with Sweden, and have invested substantial amounts in technology to make these as quick and smooth as possible.

They have IT systems which pre-declare goods to customs and they are developing a system which will allow lorries carrying pre-declared goods to be waved through. 

Norway also pays large amounts into the EU budget and is governed by the court of the European Free Trade Association (EFTA).

Switzerland (border pictured) is not in the EU customs union - which means that checks on goods crossing over the border from non-EU countries are carried 

The Switzerland Option:

Switzerland is one of the EU's longest-standing trading partners, but the  country voted against joining the bloc in 2001.

It is a member of the EU single market and has signed up to the Schengen area - meaning it must accept free movement rules and does not carry out passport check on other member countries. 

But it is not in the EU customs union - which means that checks on goods crossing over the border from non-EU countries are carried out.

The situation tosses up some anomalies. For instance, a passenger travelling through Geneva Airport can rent a car on the French side of the border for around half of the cost of renting it on the Swiss side.

Border checks are carried out on goods but customs officials say they use intelligence to carry out spot checks, which can be carried out several miles from the border. 

However, there can be long delays as goods are checked at the border.

The Turkey Option: 

Turkey(its border with Bulgaria pictured) has long eyed up membership of the EU and first tried to start the lengthy application process to join in 1987.

Turkey has long eyed up membership of the EU and first tried to start the lengthy application process to join in 1987.

The country signed a customs union with the bloc in 1995 - a move Turkey's rulers hoped would be a stepping stone on the way to full membership.

Turkey's hopes to join the bloc faded over the past few years and have been all but abandoned under President Erdogan after he instigated a major purge of political opponents in the wake of the failed coup against him in 2016.

Under its customs union Turkey must follow EU rules on the production of goods without a say in making them.

It also means that Turkey can only strike free trade deals on goods which are negotiated by Brussels.   

Advertisement