UK Transport and Brexit News & Views No. 56

Mark’s Brexit Week for Transport

It’s good for once to be able report there has been solid progress on all fronts in relation to Brexit and transport.

The EU 27 are likely to adopt the Brexit guidelines at next Friday’s summit morning session of the European Council which will broadly reflect many of our demands in relation to transport. We’ve been working hard behind the scenes, and indeed were among the first to call for a transitional arrangement (or implementation period) and that now looks like those efforts are paying off, because we understand it is pretty much a done deal.  The terms of transition very much replicate our aim of ensuring business as usual for transport operators, during the the period March 2019 to the end of 2020, albeit with no representation in Commission, Council or Parliament.  Our call for continued participation in the Agencies appears to also have been heeded, with a compromise deal on some form of association rights, so we can continue to provide technical expertise, during the transition.

On the future relationship, here we have also seen solid progress. As we report below the leaked deal says, regarding transport  ‘the aim should be to ensure continued connectivity between the U.K. and the EU after the U.K. withdrawal.’ This is a major step forward and provides a solid foundation for a deal on cross-channel rail, road, maritime and air services. But there is still much to do, not least that it does not include the key areas of customs or market access for transport services, including UK operators on the Continent. Recognition of licenses and professional qualifications, the provision of equipment, or the vital area of access to the necessary labour force also remained unaddressed. For answers to those challenges we are being advised by prominent EU insiders to look at the Association Agreement model, and the Ukraine Association Agreement has a comprehensive transport chapter which may well be the best model for UK transport. Would be pleased to hear you views?

1. EU demands £2.4bn in unpaid customs duties from UK over Chinese fashion import
Sky News reports The European Commission has demanded more than £2.4bn from Britain over unpaid customs duties on cheap Chinese fashion imports. The imports in question are since 2007 where their value was under-reported by importers to minimise the customs duties collected and subsequently paid to Brussels. The European Anti-Fraud office, OLAF, found that UK authorities took no action despite being informed of the risk of customs evasion and asked to take appropriate measures. Although the UK government does not recognise the estimate of alleged duty loss, an OLAF report found that the use of fictitious and false invoices and incorrect customs value declarations allowed for the alleged duty loss. Although this represents a specific case, a lot of the post-Brexit customs arrangements, whatever they may be, where be reliant on trust between the UK and the EU. The question from Brussels in the aftermath of this story is: if we can’t trust the UK to tackle customs evasion and rule-breaking as a member of the EU, can trust be extended to it as a third country?

2. ICYMI- European Parliament endorses Association Agreement for future UK-EU relations
In Plenary this week, the European Parliament has endorsed  a resolution laying out a possible association framework for future EU-UK relations after Brexit. The resolution, adopted by 544 votes in favour, 110 votes against, with 51 abstentions, states that “the advantage of an association agreement for the future relationship is that it provides a flexible framework allowing for varying degrees of cooperation across a wide variety of policy areas; whereas that cooperation will require both parties to maintain high standards and their international commitments in a number of policy areas”. In its endorsement of an association agreement model, the European Parliament resolution also stressed that such an agreement would “secure a consistent governance framework, which should include a robust dispute resolution mechanism, thus avoiding a proliferation of bilateral agreements and the shortcomings which characterise the EU’s relationship with Switzerland”. An association agreement is something that former MEP Andrew Duff has been championing for quite some time as the best landing spot for the UK post-Brexit as it “would set up for the UK useful institutional machinery, including an annual summit meeting, a ministerial council, technical committees and a joint parliamentary body between Westminster and the European Parliament”. Would you like a full report on what an association agreement would mean for UK transport?  Contact us to find out more.

3. EU future relationship guidelines released and updated
With only 7 days to go until the supposed signing off of the future relationship guidelines, a draft version has been circulating around Brussels and almost as soon as people get to grips with it, it gets amended. The document is likely to be further amended this weekend and throughout next week ahead of the European Council summit but, what we can say is that in areas such as transport the guidelines state: “Regarding transport services, the aim should be to ensure continued connectivity between the U.K. and the EU after the U.K. withdrawal”. Good news for transport? Yes and no. Maintaining connectivity is something that everyone can get behind, but what about market access? Plenty left to discuss and plenty more to fight for ahead of next week. The guidelines also, interestingly, were altered to make clear a line about the UK not being allowed to participate in the EU’s agencies. The line was redrafted to refer to participation “in the decision-making” of those agencies, which some will interpret as clearing the way to the associate membership sketched out by the prime minister in her Mansion House speech. If you would like to help make the case for continued transport alignment, then please join us.

4. This Week in Brussels
The Port of Dover hosted a reception in the European Parliament to launch its Brexit awareness campaign designed to  create a coalition in support of maintaining cross-channel fluidity. Tim Waggott, the Chief Executive of the Port of Dover, addressed the reception to say that “we need certainty on both sides of the Channel for the UK, Ireland and mainland Europe to continue trading effectively and delivering growth and prosperity”. He further emphasised that “wherever the political discussions go, speaking as the industry that maintains our collective standard of living, we must find a solution to keep traffic flowing across the Dover Straits corridor as both European and UK jobs and livelihoods depend on it”. The host MEP of the reception, John Howarth, then addressed the Port of Dover concerns during a Plenary session which he later tweeted about.

5. ‘Kit-Kat’ Brexit?
BrexitCentral reported on a scoop from the Sun which has Brexiteers fearing for what is labelled a ‘Kit-Kat’ Brexit. As per BrexitCentral’s own definition, a ‘Kit-Kat’ Brexit would be “where a headline political agreement would be the ‘chocolate’ obscuring a “patchwork” of far more convoluted links which would be retained as the ‘wafer’ underneath”. This more ‘secretive’ Brexit that has Brexiteers up in arms is reflected in a Sky News report in which it is revealed that the government has been signing a series of secret agreements with companies and industry groups over highly controversial outcomes of the Brexit process for Britain’s trade border. While on the one hand, the government has to be commended for exploring all possible consequences of Brexit but the lack of transparency has people on both sides of the debate wondering what the government is doing to prepare for Brexit or even to formulate more of its Brexit stances. What is your business doing to prepare itself for Brexit? Contact us if you would like to know more about the exposure you may face from Brexit supply chain disruptions.

6. UKTiE has also put together the latest timetable for Brexit. We will keep this up to date as the process develops: