January 2021
The EU-UK Brexit Deal—What It Means for You
Brexit was always going to be a complicated situation. With Britain exiting the EU, there is a lot to unravel. For those of us in the international business of trade, shipping, importing/exporting, and logistics, Brexit is one of the biggest news stories of our lives.
And it is a story that just wrote its own conclusion. Mostly, at least.
It’s true that Brexit is a done deal as far as Britain actually leaving the European Union. However, there is a lot that remains uncertain. Because shared trade laws are at the core of the EU and the 27 countries it comprises, the effects of Brexit are going to be felt in our industries for quite some time to come.
What Is Brexit?
A portmanteau of the words Britain and Exit (nobody claimed it was the most creative name in the world), Brexit is just the catchy name given to the proposal that Britain break away from the European Union trading bloc.
The EU is a single market—the world’s largest—which means that most of the barriers in trade between participating countries were removed. By leaving the EU, Britain has lost the relative simplicity that the single market offers when trading with other members.
Free Trade, Free Movement
If you don’t live in the EU, it may be difficult to fully comprehend just how easy the single market makes certain aspects of life and business. Literally hundreds of barriers to free trade and movement are stripped away in the EU’s single market.
Things simply flow more easily, allowing companies to grow their operations. That in turn creates more competition, driving down prices and delivering more options to consumers.
What’s the Big Deal?
The prospect of Britain leaving the EU without an agreement finalized was a major concern for businesses with ties to Britain. Many businesses did wind up leaving in the years since Brexit was announced, with many others broadcasting their intentions to do so. Keep in mind that Europe is undoubtedly Britain’s most major export market, as well as its largest source of foreign investment. There was a major feeling of uncertainty about new rules of trade, particularly across the English Channel, that the new trade agreement has only partially addressed.
Even so, had no deal been met, things would have been much worse. New tariffs would have been imposed, affecting everything from automobile prices to the sales of meat elsewhere in the EU. It was also projected to create major gridlocks at British ports, leaving delivery trucks trapped at the borders. Shipments that used to travel through major ports like Dover without being stopped by officials would be subject to restrictions and processes that could grind the glow of goods to a crawl.
Is a US-UK Trade Deal on Its Way?
Trade between the US and the UK is definitely a focus for many conservative lawmakers in Westminster, if less so a top priority for the new US presidential administration. This is a very complicated scenario, with the US wanting to prioritize its trade relationship with the EU.
There is a lot at play here, both logistically and politically. WIth China’s power rising in the global trade sector, it only makes sense that the US would want to form some sort of joint strategy with the EU. Where this leaves the UK in terms of trade agreement largely remains to be seen.
How Does This Affect Our Bottom Line?
While a lot does remain to be seen, and there is no clear indication yet on what a UK-US trade deal will ultimately look like, the fact is that any US importers/exporters need to be more vigilant than ever before when it comes to paperwork and ensuring that all Customs rules and regulations are understood.
We’ll need to look carefully at our supply chains, and understand that the new red tape generated by Brexit and this trade agreement may mean that certain parts of that chain are slowed. With goods and materials not travelling through the UK and EU the way we’re accustomed to, supply chain visibility is going to be a major point of concern.
What You Can Do Now
Along with the rest of the world and, to a large extent, the countries directly involved themselves—wait and see. Brexit would have been a true calamity had the UK and EU not gotten this deal done by the end of the year deadline. Even the issues averted, though, like the avoidance of new tariffs and quotas, are subject to change.
And, as noted above, we haven’t even gotten to a US-UK trade deal just yet.
In the meantime, the most important step that you can take is reaching out to JF Moran with any questions that you may have. Worldwide logistics and global trade are never simple, but a major event like Brexit takes their complexity to a whole new level.
Call JF Moran for answers today.
From supply chain visibility to logistics solutions and Customs Brokerage, JF Moran is the expert to call. It is impossible to guess at exactly what a US-UK trade deal might look like—but that doesn’t mean you can put your operations on ice until that deal comes through. Ask questions, and make sure that you’re planning for any implications that Brexit has for your business. Work with JF Moran, where world-class service meets worldwide logistics.
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