UK Transport and Brexit News & Views No. 43

I reported last week that there was a positive feeling of getting back to business in Brussels, but in the past week that mood has suddenly changed for the worse demonstrating just how delicate and complex the issues surrounding Brexit can be. With the issue of Northern Ireland’s border dominating last week’s negotiations, along with the EU lays down a deadline ahead of the December European Council meeting, we are seeing the Brexit uncertainty coming up against a hard deadline that stands in the way of moving onto Phase 2 of the negotiations.

I attended several meetings last week in Brussels where there was a consensus that the UK and the EU are ‘sleepwalking’ into Brexit. But on the whole, businesses on the Continent do not see Brexit as a challenge, and this is symptomatic of a wider passivity as we approach the crucial December European Council meeting. I heard time and time again that while businesses need time to adapt to new arrangements, they were not yet all prepared to ask for it. In my view that’s because many businesses on the Continent still do not know what impact Brexit will have on them.

UKTiE has called for business, especially in the transport sector, to come together and throw their weight into these negotiations in the hope of shaping a business-friendly outcome. There is now a real risk that the political solution that arises from this process may not match up to what business wants or needs. While we will continue to push for the increased involvement of business in this process, we must also overcome the passive holding pattern that seems to characterize the current state of play. All this means that we must also step up engagement with our business partners on the Continent, to ensure they are fully aware of the impact of Brexit and more actively engaged in the negotiations..

Finally, we are two weeks away from UKTiE’s Annual Forum, please do register to learn more about planned EU transport regulations, and receive an all-important Brexit update from key decision-makers. 

1. Two weeks until UKTiE’s 7th Annual Forum
UKTiE’s Annual Forum will take place on November 28th in the European Parliament. The theme for the Forum is “Clean, connected and competitive – how to modernise Europe’s transport system”. The three sessions will discuss 1) Decarbonising road, rail, maritime and air transport, 2) Digitalisation of road, rail, maritime and air transport, and 3) Reforms to keep road, rail, maritime and air transport competitive. Brexit or no Brexit, planned EU regulations are still likely to apply to you in some form.

Speakers will include: Jacqueline Foster MEP, Lucy Anderson MEP, Tom Vöge (ITF), Isabelle Ryckbost (ESPO), Laura Wright (RDG), Mark Watts (UKTiE), Richard Christian (Port of Dover) and David Kerr  (Transport Coordinator, Malta PermRep).
A few spaces are still available – register here. 

2. Northern Ireland border question re-emerges
This week saw a leaked European Commission paper outlining proposals to keep Northern Ireland in the Customs Union and Single Market as a the only solution to avoid a hard border in Ireland. The emergence of this position, on one of the so-called ‘divorce issues’ has thrown the the hopes of opening Brexit trade and transition talks into doubt. As the Irish government has promised to stand firm on its opposition to a hard border between Ireland and Northern Ireland, UK government plans for an Irish e-border have come to light. The plans outline the possibility of avoiding a hard border by “letting big companies notify customs authorities electronically before goods are shipped, as well as setting up schemes for “trusted traders” who would face minimal bureaucracy”. The plans further add that “Small firms would be exempted to facilitate trade while rural roads would be monitored with numberplate recognition cameras to prevent smuggling”. This issue has highlighted Ireland’s veto position regarding the advancement of negotiations to phase 2 as the country may hold up progress over the border issue, but this remains unlikely due to Ireland’s economic interest in agreeing a future trade deal.

3. The View from Paris: French Road Transport calls for 3 year status quo transition
A delegation of FNTR (National Federation of Road Transport) met with Michel Barnier’s Task Force 50 as they seek to become more actively involved in the negotiations due to fears of the impact of Brexit on European road transport. Among many topics, discussion took place around the cost of Brexit to French transport as they will need to recruit qualified customs employees to undertake import/export declarations. Beyond these added costs, waiting times stemming from these customs checks will also have a strong impact on the transport sector. It is with this in mind that the FNTR, in the hope of avoiding a legal ‘hole’, has called for a 3 year status quo transition period with a possibility of adding 2 years. This would allow the transport sector to adapt to a new system, progressively integrate new rules and allow negotiators time to understand the intricacies of the transport sector with regards to any Brexit outcome.

4. The view from Berlin: Brexit trade deal impossible by 2019
According to BDI, Germany’s largest industry group, a Brexit deal is impossible by 2019. Joachim Lang, BDI Managing Director, told Reuters that the two sides will need many years to complete a comprehensive deal on trade and investments and that forcing this into the March 2019 deadline increases the risk of a ‘very hard’ Brexit. Joachim Lang is part of a delegation of European business leaders meeting Theresa May today on the back of his claims that it will both be impossible to negotiate a Brexit trade deal by March 2019 and that German firms active in the UK should activate contingency plans for a hard Brexit as the UK government does not know what it wants out of these negotiations. Are you concerned about the threat of a Hard Brexit? Contact us to find out what you can do about pushing for a transition deal.

5. UKTiE Supported by IDA Group
UKTiE’s work is supported by IDA Group. IDA Group is a highly specialized consultancy for governmental affairs, reputation management, trade and funding. They share the belief in effective dialogue built upon trust and mutual understanding. Their diverse team of experts includes seasoned diplomats, politicians, journalists, lawyers and designers, supported by a global network of trusted partners, can help create measurable impact for your business. You will find more information on IDA Group and what services they can provide you with here.

6. MPs debate EEA-EFTA membership as a transition solution
On Monday, led by Stephen Kinnock MP, there was a Backbench Business Debate in the House of Commons on British membership of the European Economic Area (EEA).  Kinnock argued that an EEA-based Brexit that satisfies the concerns that led to the UK leaving the European Union whilst also maximizing UK access to the Single Market without without falling under direct ECJ jurisdiction and being allowed to strike independent trade deals by not being a member of the EU Customs Union. The argument raised by Kinnock is that EEA-EFTA membership avoids the cliff-edge Hard Brexit and in a smoother manner away from the EU. This is a point of view that had been raised in September by Carl Baudenbacher, President of the EFTA court, and in August by Koen Lenaerts, President of the ECJ. Stephen Kinnock shared part of the debate here. Are you uncertain what EEA-EFTA membership would mean for your business? Contact us to find out more.

7. Michel Barnier: “everyone should prepare for the absence of a deal”
In an interview given in France to Le Journal du Dimanche, Michel Barnier warned that everyone, businesses and governments, should prepare for the absence of a Brexit deal. Barnier also highlighted Wilbur Ross’ point that the UK should move away from the ‘European Model’ to make a trade deal with the United States easier. Barnier warned that the European Union would not accept this and this would jeopardize a deal with the EU as its primary focus, as shown by his meetings with business groups from each member state, is maintaining the integrity of the Single Market. Are you preparing for a ‘No-Deal Brexit’? Contact us to find out what you need to be preparing for.

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