LONDON: January 17, 2017. British prime minister Theresa May's declaration that the U.K. will make a "hard Brexit" with the European Union will cost UK exporters £44 billion according to parcel broker Fastlane International.
Fastlane said May's decision to abandon the EU Common External Tariff would also lead to excessive delays and more bureaucracy at EU borders.
In her speech the prime minister said: "I do not want Britain to be part of the Common Commercial Policy and I do not want us to be bound by the Common External Tariff. These are the elements of the Customs Union that prevent us from striking our own comprehensive trade agreements with other countries."
Fastlane head of Consumer Research David Jinks said this would mean Britain would have to set duties on 19,000 individual tariff codes: "Moving outside the EU's Common External Tariff is a frightening scenario that could result in an increase in the cost of imports of around 20 percent [or] £44 billion on current UK business exports to the EU of around £220 billion," he declared.
Jinks said the Common External Tariff ensures the same rates of taxes on the same item in different (EU) countries and abandoning it is "throwing the baby out with the bathwater". He added this would make UK exporters less competitive as couriers and forwarders applied Customs clearance surcharges to cover border delays.
The British International Freight Association (BIFA) responded to May's speech saying it was "short on the details that will assist its members as they go about their business of managing much of the UK's visible international trade".
BIFA director general Robert Keen said his members "would have welcomed clarity on the mechanics that will underpin Mrs. May's desire for 'tariff-free and frictionless trade'. As the old saying goes, the devil is in the details. And after today's much anticipated speech, much of the real detail is missing," he noted.
May is due to trigger Article 50 "at the end of March" that will begin Britain's formal withdrawal from the EU.