UK Transport and Brexit News & Views No. 61

Transport has finally made it to the agenda of topics to be discussed at the forthcoming future framework meetings, and we at UKTiE take some of the credit for that, as we have consistently made the case for transport to be a priority sector during the Brexit negotiations. What is interesting is that it is transport, as we predicted and as we argued, will be discussed horizontally, so no separate negations for road, rail, sea or aviation, although customs, not surprisingly, is carved out separately. There is also more evidence that transport will still be subject to EU competition and state aid rules, so any expectations that somehow we will be free to diverge in these areas seems entirely misplaced, at least in the short to medium term.

Second, the more neutral news. There is a strong desire on all sides to agree an transitional arrangement (or implementation phase) and we are expecting very positive news at the June Summit in that regard. The view here in Brussels is that the UK will concede on the remaining outstanding issues, such as governance and dispute settlement, but it will not be for a status-quo.

There will be many areas not fully addressed by 29 March next year, either because we run out of time or they are reliant on the good-will of third-countries. In some cases, it may simply be because the Government has not thought of them. Participation and the role of the Agencies comes to mind, but also any transport agreements with third countries we currently enjoy thanks to our membership of the EU may well lapse.

Of course, as reported below, the general lack of clarity, direction and leadership on the most basic issue of what sort of customs relationship do we want post Brexit risks undermining all of the progress achieved so far, including that transition deal.

I can only hope this issue is settled once and for all in the coming week. Meanwhile, we will be stepping up our efforts to secure a position or future framework paper from the UK Government for transport. I’m sure I’m not the only one who is concerned that we risk both entering discussions on transport with our EU partners without a clear plan, and not properly scoping what should and should not be in the transition deal.

1. GDPR compliance
As you might know, GDPR will be coming into effect later this month. In order to ensure UKTiE’s compliance with the new data protection rules, if you would like to continue receiving our Brexit and Transport newsletter then please do send us an email stating your desire to continue receiving the newsletter.  If we hear nothing by the end of the month then you shall be removed from this mailing list.

2. UK government customs proposals
The UK government has talked publicly about two potential options for its customs relationship with the European Union after Brexit. But what exactly are these two main options? The BBC sought to clarify this by exploring the two options in depth. The first option, that of a customs partnership, would see the UK acting on the EU’s behalf in applying the EU’s tariffs and rules of origin to goods arriving in the UK which are destined for the EU. The UK would collect the tariffs which would then be sent to Brussels. The government has also suggested that all companies would have to pay whichever tariff rate (EU or UK) was higher, and then claim a potential refund once goods reached their final destination. Given the questions surrounding what system the UK government would implement to process all of this, this option does sound rather complicated until further details emerge. There are also question marks over the reciprocity of this model for goods traveling into the EU that are destined for the UK. The second option is the so-called maximum facilitation model which would seek to implement new technology to make the border as seamless as possible. This option stems from the UK government’s customs paper would build on existing schemes such as authorised economic operators or trusted traders, and introduce unilateral improvements to the UK’s customs regime to make trade with the EU and the rest of the world easier. While this option has seen a more positive reaction from the EU, there are issues over whether it can be implemented in time as it could take years to introduce some of the required technology. If you would like a report on what these customs proposals mean for freight transport then please do contact us.

3. Former ECJ judge says EU/Ukraine dispute settlement might be best model for UK-EU future partnership
Writing in the Journal of European Studies, former ECJ judge Franklin Dehousse explores the various judicial options for dispute settlement in a future UK-EU agreement such as the EFTA court, the mixed EU/Ukraine system, the CETA panel system, the Asian agreements, the Switzerland and finally the Turkey options. The EU and the UK have yet to agree on the governance of the Withdrawal Agreement, which would eventually need to include a dispute settlement process in order for the agreement to be effectively governed. As Dehousse writes “procedures and mechanisms envisaged to settle disputes between the potential partners are precisely among the key elements that could determine the overall credibility and effectivity of any agreement”. Dehousse concludes that “the EU/Ukraine model probably offers to the UK the best balance between regulatory cooperation and judicial commitments. It is quite advanced for trade in  goods.  For trade in services, it provides a framework within which the regulatory equivalence may be negotiated, sector by sector. The arbitration procedure is also quite flexible. Many actual or potential conflicts lay already be settled through negotiation. In case this is not enough, the arbitration panel system also offers different benefits, including speed, reduced costs,  and procedural flexibility. This means however that for some areas a direct role of the European  Court of Justice will have to be conceded”. If you would like a report on the Ukraine Association Agreement and what this means for transport then please contact us.

4.  Post-Brexit port checks could disrupt fresh food supplies
The Guardian reports that food staples including lettuce, tomatoes and beef could be in short supply or even disappear from supermarket shelves after Brexit because of disruptive checks that will need to be conducted at ports, according to Eurotunnel and freight industry chiefs. Speaking at the annual multimodal logistical conference in Birmingham, John Keefe, the director of public affairs at Getlink, the new name for Eurotunnel Group, said that “coming in through the Channel tunnel on an everyday basis are food, flowers … If the government turn round at the end of Brexit negotiations and say: ‘Sorry consumers, you will no longer be able to have fresh strawberries or fresh lettuce or fruits de mer from France, there is likely to be a strong reaction from consumers. If we go backwards from frictionless border, then we really have lost from Brexit”. Checks would also need to take place on UK products being exported to the EU, leaving EU consumers feeling the negative effects of port checks as well.

5. Arlene Foster calls for less rhetoric and more engagement from the EU
Speaking Sunday on the Andrew Marr show, Arlene Foster said that she would like the EU to take a more sensible approach to Brexit by offering more engagement and less rhetoric. She commented on Michel Barnier’s trip to Northern Ireland, “what he [Mr Barnier] was saying was that it was up to the UK to come up with a solution and they would wait for that solution to come and that is not the way forward”. Arlene Foster said she did not believe that the UK had to remain in the Customs Union in order to have free flow between the Republic of Ireland and Northern Ireland. With the UK under pressure to find a solution to the Irish border issue by the end of next month, the European Council summit from June 28-29, there has been an increase in the tension surrounding the customs issue as we near the ‘deadline’ for the Irish border solution, with the UK government juggling with several entrenched stances from the DUP, the European Research Group and even from a handful of Conservative rebels.

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