"Next Year’s Major Changes in EU Product Import Procedures... Prepare Now"

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] The UK government has officially announced that customs procedures will be inevitable from the end of this year when negotiations with the European Union (EU) conclude. Regardless of the negotiation results, it has acknowledged significant changes in export and import procedures, and the cost burden on companies due to paperwork and other processes is expected to increase.

According to BBC and others on the 10th (local time), Michael Gove, UK Chancellor of the Duchy of Lancaster, attended a freight transport industry event held in London that day and said, "As the UK leaves the single market and customs union, we will inevitably prepare for customs procedures and regulatory inspections that follow." The Guardian reported, "This is the first official confirmation by the UK government that it will erect trade barriers after Brexit (the UK's withdrawal from the EU)."

UK and EU companies have so far freely passed customs without separate procedures. However, if procedures are strengthened from January next year, the costs that stakeholders must bear are expected to be greater than anticipated.

Earlier, on the 31st of last month, the UK daily The Telegraph, citing senior government sources, reported, "Plans are underway for export and import security declarations for all EU goods, animal health status inspections, and border inspection posts for all retail goods," and that a program to strengthen inspections of imports at the border is being prepared. If customs are strengthened, related companies such as those in the freight transport industry will inevitably bear additional time and cost burdens.

Gove said, "We must accept that some friction is necessary. We will minimize it, but it is inevitable at our starting point," and explained, "There will be significant changes." He added, "However, we have time to create change," and announced plans to establish a new border system by 2025. He also intends to introduce an online method to simplify procedures as much as possible.

Export and import procedures will apply when the UK government’s proposed Canada-style trade agreement or the World Trade Organization (WTO) rules apply in case of a breakdown in negotiations with the EU. UK Prime Minister Boris Johnson is pursuing a trade agreement based on the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada.

Regarding Gove’s remarks, Elizabeth de Jong, UK Policy Director of the Freight Transport Association, expressed a negative stance. She said, "Barrier-free trade has started heading towards the touchline," and added that it would be difficult to have IT systems ready by 2025. She further stated, "The cost for companies will be high." The Food and Drink Federation also expressed concerns that costs for companies, consumers, and sellers will inevitably increase.