๐Ÿšจ๐Ÿšจ๐Ÿšจ๐Ÿ‡ช๐Ÿ‡บ๐Ÿ‡ฌ๐Ÿ‡ง๐Ÿš›๐Ÿš’๐Ÿ‡ช๐Ÿ‡บ๐Ÿ‡ฌ๐Ÿ‡ง๐Ÿšจ๐Ÿšจ๐Ÿšจ serious #brexit story alert - companies now starting to see penny drop on what rules of origin does to supply chains (food for example) but Brussels seems deaf to both EU & U.K. pleading. A bellwether? ๐Ÿ˜ฌ Stay with me. 1/

So first the problem: its a tad complicated but basically goods that are imported into UK and then 'hubbed' onwards into Ireland or other parts of the EU are facing full EU tariffs - this is particularly bad for food stuffs, which attract high tariffs. Why is this? /2
It's a function of the Rules of Origin clauses that mean that goods have to sufficiently "originate" in the UK to qualify for zero-tariff entry to EU (and vice versa).

But to qualify, you have to do something to the goods - process them or add value - not just punt them on /3
The brilliant @AnnaJerzewska does a better job than me of explaining, but the important thing is that this is a nightmare for companies that 'hub' /distribute products through the UK - and that's both EU and UK companies /4
@AnnaJerzewska So both the @Foodanddrinkfed and EU groups like @CAOBISCO_EU (chocs etc) say they want the EU Commission to fix this with a derogation/waiver that takes into account proximity and interdependence of EU/UK supply chains. /5
@AnnaJerzewska @Foodanddrinkfed @CAOBISCO_EU Because as @AnnaJerzewska points out, in a usual FTA (say with Japan or Canada) good don't arrive from the EU customs territory (or vice versa) and then bounce straight back across the border. It's a pretty unique situation. /6
@AnnaJerzewska @Foodanddrinkfed @CAOBISCO_EU It's also tough on Ireland that gets a lot of goods via UK. As Paul Kelly, director of Food Drink Ireland @FoodDrink_Irl the main lobby group for the sector. โ€œCompanies are beginning to raise this across the industry." /7
@AnnaJerzewska @Foodanddrinkfed @CAOBISCO_EU @FoodDrink_Irl Now. It is true that goods could "transit" through UK to Ireland/EU - so they aren't imported into UK, they're just 'passing through' - but that, it seems, is not how the system currently works. /8
@AnnaJerzewska @Foodanddrinkfed @CAOBISCO_EU @FoodDrink_Irl According to both @AnnaJerzewska and @SamuelMarcLowe the Commission could - if it wanted - apply a derogation/waiver sorting this out, based on previous precedents. Per Mr Lowe: โ€œIf the EU wants to resolve the issue, it could do so pretty easily with an extra clarification." /9
@AnnaJerzewska @Foodanddrinkfed @CAOBISCO_EU @FoodDrink_Irl @SamuelMarcLowe So what did the EU tell my colleague @Sam1Fleming when he asked officials whether this was going to be sorted?

โ€œYou canโ€™t expect Brexit not to have consequences. The UK wonโ€™t be a distribution hub for the EU any more. EU businesses will need to stop relying on UK hubs.โ€ /10
@AnnaJerzewska @Foodanddrinkfed @CAOBISCO_EU @FoodDrink_Irl @SamuelMarcLowe @Sam1Fleming So to translate from the Bruxellois, that means "touch". Brexit means Brexit mon brave. etc etc.

Not exactly clear how you quantify the impacts of this - am told clothing industry also hugely impacted on this - but the EU position seems pretty stark. /11
@AnnaJerzewska @Foodanddrinkfed @CAOBISCO_EU @FoodDrink_Irl @SamuelMarcLowe @Sam1Fleming We shall see over next year or two whether those who reckoned the barebones deal @DavidGHFrost negotiated is really something to "build on" but this doesn't feel that encouraging! ENDS

More from Peter Foster

Good to see @Marthakearney on @BBCr4today taking @pritipatel to task over the numbers of lorries in Dover - now 1,500 in Stack (M20) and Manston airfield combined - rather more than 170 that @BorisJohnson said yesterday, baffling haulage groups /1

@BBCr4today @pritipatel @BorisJohnson She won't say whether lorry drivers will have to take a PCR test (long-winded, requires RNA extraction etc. 24-48hrs) rather than much faster (and less sensitive) lateral flow test. Short Strait will struggle to operates with PCR tests. You'd need one yesterday for tomorrow! /2

@BBCr4today @pritipatel @BorisJohnson Because of the delays that have empty lorries already stuck in the queues, in an earlier interview British Retail Consortium @the_brc Andrew Opie said fresh food shortages would occur within days because lorries couldn't get back to Spain etc to reload /3

@BBCr4today @pritipatel @BorisJohnson @the_brc Haulage experts like @RHADuncanB are always at pains to explain that the lorries at Dover (and GB-IE, for that matter) are flowing in a continuous cycle. More than 85% are from EU countries. So if you block one side, or artery the whole system starts to grind to a halt/4

@BBCr4today @pritipatel @BorisJohnson @the_brc @RHADuncanB This episode has been a bit of a teaching moment, exposing the canard that the UK can unilaterally "take back control of its borders". It can't. Borders are membranes. Traffic flows in both directions. Actions by one side impact the other - as French move has demonstrated. /5
๐Ÿšจ๐Ÿ‡ฌ๐Ÿ‡ง๐Ÿ‡ช๐Ÿ‡บ๐Ÿš›๐Ÿค๐ŸŸ๐Ÿฅฌ๐Ÿ“ฆโœˆ๏ธ๐Ÿ‡ฌ๐Ÿ‡ง๐Ÿ‡ช๐Ÿ‡บ๐Ÿšจ
So here it is. After the euphoria, the @FinancialTimes @FTMag long read of how @BorisJohnson did his Trade deal with the EU. Tl:dr...not so much โ€œbuild back betterโ€, more โ€œbuild back the bordersโ€ - stay with me/1.

@FTMag @BorisJohnson The really under-appreciated part of this story is the extent to which the Johnson government, having won its 80 seat majority promising to "Get Brexit Done" then explicitly and actively chose the hardest possible version of #brexit in defiance of commercial interests /2

@FTMag @BorisJohnson Our story begins in January last year when David Frost commenced what Whitehall insiders call a "Star Chamber" process to strip away anything that might be considered more than a "Canada-style" deal - regardless of the fact that UK doesn't trade with EU like Canada! /3


@FTMag @BorisJohnson So what did that mean in practice?

Well, for example leaving EU aviation safety agency (EASA); Chemicals agency (ECHA), not getting a waiver of 'safety and security' declarations for hauliers, not seeking special arrangements for animal products...on and on it goes /4

@FTMag @BorisJohnson Didn't industry object? Well yes it did - but those who yelled too hard found themselves shut out of the door.

Did Whitehall object? Yes it did - Defra and Beis and Treasury all tried at some level to temper the revolutionary fury. But mostly failed. /5

More from Brexit

๐Ÿšจ๐Ÿ‡ฌ๐Ÿ‡ง๐Ÿ‡ช๐Ÿ‡บ๐Ÿš›๐Ÿค๐ŸŸ๐Ÿฅฌ๐Ÿ“ฆโœˆ๏ธ๐Ÿ‡ฌ๐Ÿ‡ง๐Ÿ‡ช๐Ÿ‡บ๐Ÿšจ
So here it is. After the euphoria, the @FinancialTimes @FTMag long read of how @BorisJohnson did his Trade deal with the EU. Tl:dr...not so much โ€œbuild back betterโ€, more โ€œbuild back the bordersโ€ - stay with me/1.

@FTMag @BorisJohnson The really under-appreciated part of this story is the extent to which the Johnson government, having won its 80 seat majority promising to "Get Brexit Done" then explicitly and actively chose the hardest possible version of #brexit in defiance of commercial interests /2

@FTMag @BorisJohnson Our story begins in January last year when David Frost commenced what Whitehall insiders call a "Star Chamber" process to strip away anything that might be considered more than a "Canada-style" deal - regardless of the fact that UK doesn't trade with EU like Canada! /3


@FTMag @BorisJohnson So what did that mean in practice?

Well, for example leaving EU aviation safety agency (EASA); Chemicals agency (ECHA), not getting a waiver of 'safety and security' declarations for hauliers, not seeking special arrangements for animal products...on and on it goes /4

@FTMag @BorisJohnson Didn't industry object? Well yes it did - but those who yelled too hard found themselves shut out of the door.

Did Whitehall object? Yes it did - Defra and Beis and Treasury all tried at some level to temper the revolutionary fury. But mostly failed. /5

You May Also Like