After Brexit – how will the situation be for road transport?

Date: 23, July 2018
The following is a status of Brexit and the impact for road transport on the basis of what we know at this stage. However, it must be emphasized that there are in fact two main issues for the moment: the withdrawal agreement, where the Irish border issue needs to be settled, and the long-term agreement for the relationship between EU and UK.

As concerns the long-term relationship, the British government published earlier this month a White Paper putting forward how the Government sees the future relationship with the EU.

Among many subjects, the White Paper also put forward how the British government visualize the new relationship between the UK and the EU regarding the Single Market and the Customs Union. The Government maintains that Brexit is also an exit from the Single Market and the Customs Union. Even though the UK wants to seize “new opportunities and forging a new role in the world”, UK also want to keep a close relationship with Europe and the EU. The UK government therefore proposes to create a UK and EU free trade area for goods. This would according to the White Paper “avoid friction at the border and ensure both sides meet their commitments to Northern Ireland and Ireland through the overall future relationship. It would protect the uniquely integrated supply chains and ‘just-in-time’ processes that have developed across the UK and the EU over the last 40 years, and will remain important given our geographical proximity, and the jobs and livelihoods dependent on them”. The White Paper envisages “a common rulebook for goods, including agri-food, covering only those rules necessary to provide for frictionless trade at the border”.

For road transport a free trade area for goods, would mean that the supply chains and the border crossing would be easier than if there is no agreement, but will in any way never be as seamless as todays situation. Free trade agreements, tailored depending on the different interests of the countries involved in the agreement is something the EU has done before. Due to this, the White Paper argues that this could be a possible solution for the UK and the EU. However, it is important to note that the EU has on its side been very steady on their vision of no “cherry-picking” solutions, and this proposal in the White Paper might be seen as one. The White Paper also states that in order to have a free trade area for goods, there is a need to introduce a new “Facilitated Customs Agreement- FCA” between the UK and the EU”.  This agreement would remove the need for customs checks and controls, making transporting goods back and forth as frictionless as possible. Again, it is not clear if the EU will accept this idea, since there is a risk of goods slipping into the EU market through a back-door in the UK, without paying the full customs duties etc. This is the country-of-origin issue.

In order to have a frictionless trade between the UK and the EU, the White Paper states that for road transport they will “explore the options”, and work for a reciprocal access for road haulers from both the UK and the EU, for both goods and passenger road transport. It also lays out that “The UK is taking legislation through Parliament to ensure that a permitting system can operate if required". The conclusion of the above is that the UK Government has some ideas on how to design the future relationship between the EU and UK trying to make trade and transport as frictionless as possible, though accepting that it will not be like today.

However, before we even start negotiating the long-term agreement we need to agree on the withdrawal agreement which will set the framework for what happens on in March 2019, when the 2 years deadline of the Art 50 negotiations expire. In December 2017 an agreement was reached, including ensuring that there will be no hard border between Northern Ireland and Ireland and the idea of a transitional period of 18 months where EU rules would continue to apply. However, this agreement still needs to become a formal text, adopted and ratified. This should happen by October 2018 in order to have time for implementation. People are increasingly concerned that this might not happen, and we will by end of March experience the free fall of a Brexit with no agreements on anything as from end March. For road transport this can mean a fall-back to the CEMT agreements, and the permits for bilateral road transport negotiated in CEMT. However, the number of permits in these agreements are in no way sufficient!

It is on this basis, that the EU Commission on July 19 published a document on preparing for the withdrawal of the UK from the EU on March 30, 2019. It says here that if there is no withdrawal agreement the following will be some of the many consequences:” Border issues: The European Union must apply its regulation and tariffs at borders with the United Kingdom as a third country, including checks and controls for customs, sanitary and phytosanitary standards and verification of compliance with EU norms. Transport between the United Kingdom and the European Union would be severely impacted. Customs, sanitary and phytosanitary controls at borders could cause significant delays, e.g. in road transport, and difficulties for ports.”

The NLA as well as our fellow colleagues from the road transport sector have been demanding more clarity and for a seamless solution for the road transport sector. A fragmented solution between the UK and the EU would mean not only huge economic losses and congestion, but also change the situation for businesses and citizens across Europe in a way we have not seen before. We do understand that an exit from the Internal Market as well as the Customs Union will change the situation between the UK and EU in the future, and that the road transport sector will feel these differences. However, we would like to see that the future agreement will not implicate higher administrative burdens for businesses and that there will be a sufficient implementation time in the post-Brexit outcome. It is not realistic to run the administration of road transport between EU and the UK on the basis of a need for a permit for every trip.