Imani Development recently completed a poverty assessment on the effects of Brexit on EU-SADC trade under the Economic Partnership Agreement (EPA). Our analysis of specific priority sectors under the SADC EPA such as wine, horticulture and automotive assessed and suggested that, in the short run, the main challenges for the private sector will be technical; many of which can be addressed by companies taking practical steps relating to customs and distribution. These are similar challenges to what many EU businesses will face post Brexit.

This article briefly outlines the steps the EU and its member states are taking to help prepare the private sector for the times ahead. It does so with a view to furthering the discussion on what support business in the SADC EPA group should receive to help them continue trading with the EU and UK.

What has the European Commission been doing?

Last week (19 July 2018) the European Commission published a communique aimed at EU businesses: “Communication from the Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee, the Committee of the Regions and the European Investment Bank preparing for the withdrawal of the United Kingdom from the European Union on 30 March 2019”[1].

In this communique the European Commission outlines the need for preparedness of European citizens, businesses and administrations for the day when the UK leaves the EU (30 March 2019). In either case, whether with a ratified withdrawal agreement with a transition period of 21 months, i.e. EU law will cease to apply on 01 January 2021; or in the case of a no deal and hence, no transition period, and EU law ceases to apply to and in the UK on 30 March 2019, businesses need to be ready.
With regards to administration, examples of preparedness include reallocation of tasks from UK authorities to EU authorities at EU level, or for economic operators, to get authorizations and certificates in EU if they previously held these from UK to continue to be permitted trade in EU27.

In case of no deal, in addition to preparedness measures, contingency measures at member state level might also need to be applied such as for example dealing with long customs delays.

Preparedness is aimed at business and private citizens: “Private actors, business operators and professionals need to take responsibility for their individual situation, assess the potential impacts of a cliff-edge scenario on their business model, make the necessary economic decisions and take and conclude all required administrative steps before 30 March 2019. The citizens who will be affected by the withdrawal of the United Kingdom, as well as the public administrations that serve them, should also prepare for 30 March 2019.”

The communique offers sector specific assessments, looking at challenges and what needs to be done/has been done by different stakeholders (EU, national, business) to ensure preparedness;

  • Transport, including aviation: EU has already published 10 specific notices[2] relating to transport (e.g. rail transport, aviation safety etc.) outlining the legal and regulatory implications of the UK having third country status on the different modes of transport. There is on-going work on regulations with regards to inspection and surveys of ships at Union level.
  • Customs: Member states have started additional recruitment (e.g. Ireland aims to recruit more than 500 additional customs officials and veterinary inspectors[3]); technical seminars have been conducted on issues of customs procedures and controls; a process to support the amendment of IT systems to reflect status change of UK is under way. The Commission is also advancing UK’s access to the Common Transit Convention.
  • Financial services: Eight notices and a series of opinions have been published on financial service regulations and related. A high level technical working group has been set up, co-chaired by the Bank of England and the European Central Bank.
  • Food products: Ten notices with regards to SPS conditions and controls have been published, advising business operators on rules for third countries.
  • Pharmaceuticals: Critical medicinal products have been identified by the European Medicines Agency and supply chain actors have been advised regarding EU pharma law requirements and the need for testing facilities in the EU.
  • Personal data: Awareness has been raised and advise provided from member states data protection authorities on ’transfer’ of data, depending on status of UK.
  • Professional qualifications: A notice has been published to advise EU nationals with UK qualifications to seek advice on whether there is a need to seek recognition of UK qualification before UK ceases to be a member.

National level support

The Commission realizes that even with information and tools provided at EU, regional and national level, more support is needed for small and medium sized companies. They need to understand what it means to trade with a third country. Business associations and chambers at national and regional level must provide preparedness information.

Some countries have proactively set up web pages to help their businesses deal with the consequences of the UK leaving the EU. Examples can be found in Austria, Ireland and the Netherlands, providing guidance and advise to business. Some member states have conducted a gap analysis on legislative changes and adaptions needed and some provide tools for their economic operators.

Examples

Austria:https://www.wko.at/service/aussenwirtschaft/brexit-praktische-hinweise-fuer-unternehmen.html; The Wirtschaftskammer Oesterreich (Chambers Austria) offers advise to companies via its website and its external office in London.

Ireland: https://www.prepareforbrexit.com, a web site by Enterprise Ireland, offering advise but also up to €5,000 per client to support post Brexit action plans.

Netherlands:https://www.brexitloket.nl/impactscan; Here, small and medium sized companies can assess potential problems related to the withdrawal of the UK. The Netherlands Enterprise Academy (Dutch Government) offers €2500.- vouchers to small and medium sized companies to help then deal with any consequences of Brexit and to find new markets[4].

To a greater extent, the EU has been proactive in preparing the private sector for Brexit. The question now is, shouldn’t SADC be doing the same for its member states?

About Mirabel

Mirabel

Mirabel Bausinger is a Senior Consultant at Imani Development, with over two decades of experience working in trade facilitation, economic analysis and research, regional integration, and trade negotiations, and has worked extensively in East and Southern Africa for the past ten years.

She has successfully completed assignments for clients such as the World Bank, GIZ, various RECs (including SADC and the EAC), and the Foreign and Commonwealth Office of the United Kingdom. She holds an MSc in Economics for Development from the University of Oxford in the United Kingdom.

 

 

 

 

References:

[1] https://ec.europa.eu/info/sites/info/files/communication-preparing-withdrawal-brexit-preparedness.pdf

[2] All notices can be accessed on: https://ec.europa.eu/info/brexit/brexit-preparedness/preparedness-notices_en

[3] “Dublin to recruit 500 customs officers in preparation for ‘no deal’ Brexit”, The Irish News, 16 July 2018, online: https://www.irishnews.com/news/republicofirelandnews/2018/07/17/news/dublin-to-recruit-500-customs-officers-in-preparation-for-no-deal-brexit-1383511/ (accessed on 22 July 2018)

[4] “Dutch dish out £2500 ‘Brexit vouchers’ to help firms AVOID trading with UK”, Express, 10 April 2018, on-line: https://www.express.co.uk/news/uk/944017/Brexit-news-Netherlands-Enterprise-Agency-voucher-UK-EU-split (accessed on 20 July 2018)