Brexit: a precious reality soap with many episodes

A column written by Edo Bosga about the Brexit and the effects on customs.

Since the Brexit's - somewhat- shocking and unexpected choice of British people, there is almost daily news about this theme. On all levels in society it becomes clear that the impact of this choice is more extensive than previously thought. Not surprisingly if you give people the opportunity to speak out on things they do not fully understand and if you let people act in media that only shout out that they have understanding of something.

An important consequence of the Brexit is the impact on our trade relationships. The power of the European Union is the formation of a Customs Union. Once goods have been released for free circulation, they can be transported and traded between the Member States without customs procedures. This has been in operation since 1993 and is therefore fully embedded in international trade procedures, processes, IT systems and trade relations. The Brexit means that the United Kingdom is no longer part of the Customs Union. Enterprises dealing with parties in the UK will suddenly be affected by import and export formalities. That's quite a difference, more accurate: that difference is huge!

Dutch Customs has done an internal inventory and expects more than 40% of new relationships with Dutch companies as a result of the Brexit. The number of shipments to and from the UK to be overseen and controlled is enormous. It is a great challenge to facilitate this. The impact on businesses is also high: many companies that have never had to deal with customs legislation will have to fulfill the required formalities. Expertise, procedures, IT systems and service providers must be collected and enabled to continue the trade relationships.

Recently, a UK negotiator has pleaded for the creation of a Customs Union: it should prevent all kinds of customs formalities to be fulfilled. Sounds attractive, but don't get carried away by a nice story starring a media actor again. One of the main reasons for a Brexit was the UK's wish to conclude independent trade agreements with countries. Applying this option and staying part of Customs Union is simply not feasible.

Building successful Businesses is all about looking ahead. Of course, it's good to keep track of information regarding the Brexit. But do not be fooled by the many media actors. I will personally guarantee that it will be clear in advance what is requested from trading parties to continue the existing trade flows with the UK. That this will lead to additional costs is inevitable. But that's not an obstacle either. After all, as with any cost increase and tax measures, these are passed on to the end user. Therefore, consumers in the UK will be paying higher prices. This makes the circle round: it was the same consumer in the UK who consciously chose the Brexit, and who now needs to face the consequences.

The making of a reality soap simply costs a lot of money...!

23 Aug 2017 at 10:39 am