THIRD Country

On 29th March 2019, the United Kingdom leaves the European Union and becomes a third country. In the absence of a 'new, comprehensive, bold and ambitious free trade agreement' there will be a hard border between the United Kingdom and the European Union maybe on World Trade Organisation (WTO) rules.

Although it is true that the United Kingdom complies with all European Union regulations and rules today, the day after we leave the European Union there is no guarantee from the European Union's perspective that this will continue to be the case. There are therefore administrative matters that need to be sorted out when we export goods: 

Nevertheless, the EU will require as conditions for entry, compliance with EU production regulations, licensing of establishments and much more, in a graduated hierarchy of controls. But, to compensate for the inherent limitations of its power within the third country territories, the EU also imposes border controls. 

When we thus turn to Article 229 of Regulation (EU) 2016/429, we see a five-tier control system in place. 

Firstly, goods must come from a country officially listed as permitted to export the relevant categories; secondly they must come from establishments which are approved and listed; thirdly, they must comply with all relevant animal health requirements laid down by the Union; and fourthly they must be accompanied by animal health certificates and by other declarations and documents as required. 

Finally, the consignments must be presented to a Border Inspection Post (BIP) – now called Border Control Post (BCP) – where they must pass inspection. Only when the fees due are paid and the "Common Veterinary Entry Documents" are endorsed can the goods be presented for customs clearance. (http://www.eureferendum.com/blogview.aspx?blogno=86546)

The nearest Border Inspection/Border Control Post in France is not in Calais. It is in Dunkirk (https://ec.europa.eu/food/sites/food/files/animals/docs/bips_contact_france.pdf) and (https://ec.europa.eu/food/animals/vet-border-control/bip-contacts_en) 
This post has recently been refurbished and can deal with 5000 consignments per year. (http://www.eureferendum.com/blogview.aspx?blogno=86393)

I recently travelled on Eurotunnel where the following was on the wall of the train: 
"Via the Channel Tunnel: Each year, Eurotunnel carries 1,600,000 trucks to and from the UK, with a total trade value of £91bn"

Assuming that half of these are outbound, that's 800,000 trucks. If 10% need to be inspected thats 80,000 trucks or 219 per day. 5,000/365 is 14 trucks a day. What happens to the other 205 trucks?
Then there are other conditions or requirements; non tariff barriers to trade: (http://exporthelp.europa.eu/thdapp/display.htm?page=rt/rt_SanitaryAndPhytosanitaryRequirements.html&docType=main&languageId=en)

Dover will become a car park. Operation Stack on the M20 may well be in force indefinitely. That is just Dover.

Then there is ferry travel from Holyhead and Fishguard. Here is the list of Inspection Posts in Ireland (https://ec.europa.eu/food/sites/food/files/animals/docs/bips_contact_ireland.pdf)
There is no good reason why France or Ireland should increase their BCP capacity to suit the vagaries of the United Kingdom. Why should they? Even if they did undertake such an increase they would most likely want a UK contribution toward the cost of such an upgrade.

As previously posted, once the United Kingdom becomes a third country access to European Union Databases may well cease.

Moving on to flights Michael O'Leary of Ryanair has twice warned about the dangers of no deal to the operation of carriers to mainland Europe from the United Kingdom:

Last week, Peter Fankhauser, the chief executive of Thomas Cook, colourfully predicted that unless our politicians wake up to these potential dangers, we risk being taken back to the "medieval age", echoing the rather plainer warnings of Michael O'Leary, the chief executive of Ryanair, that in Britain we could even find ourselves no longer entitled to fly our aircraft anywhere outside UK airspace. (http://www.eureferendum.com/blogview.aspx?blogno=86527) and (http://www.eureferendum.com/blogview.aspx?blogno=86486)

No flights to Spain, Portugal, Italy and other holiday destinations - imagine what that will do for Conservative Party political fortunes.

There are implications for medicines and the European Medicines Agency which the Government has already said will move outside the United Kingdom to a new European Union based site (e.g. Madrid?) and which the European Union expects the United Kingdom to pay for the relocation of or at least contribute toward it.

Veterinary issues are also a consideration (http://exporthelp.europa.eu/thdapp/display.htm?page=rt/rt_SanitaryAndPhytosanitaryRequirements.html&docType=main&languageId=en) (https://ec.europa.eu/food/animals/live_animals_en)

Imports

For importation, additional animal health requirements are set out in specific Commission Decisions. These lay down health certificates which must accompany all animal imports. In general, these certificates must be signed by an official veterinarian of the competent authority of the exporting non-EU country guaranteeing that the conditions for import into the EU have been met.

On arrival in the EU, the animals and the accompanying certificates must be verified and checked by EU official veterinarians at a designated Border Inspection Post (BIP). Further checks on the animals may also be carried out at the final destination.

None of this is very palatable but it is a fact of life. Michel Barnier has said that he needs answers:

We now need to know the UK's position on each of these issues", he says, "in order to make progress". He adds, not unreasonably, "We need to know what we can do, and [then] we can negotiate in earnest". In a statement of the obvious, he went on to say: "We cannot remain idle as the clock is ticking".

In this, the first phase of the talks, there are three elements – known to us all. The first is "rights of EU citizens" and the second is the Financial Regulation. On this, Barnier says: "It is essential for the United Kingdom to recognise the existence of financial obligations which simply stem from the period during which it is a member of the EU, and in particular from our current multiannual financial framework".

Only once the EU gets this [formal] recognition, he says, can we "begin work on the methodology and agree in this first phase of negotiations on this methodology".

Of the third - issues related to Ireland - " we want to start discussions quickly on the maintenance of the Common Travel Area between Ireland and the UK, defining precisely its various relevant aspects, and also on the protection of Good Friday commitments Agreement , in all its dimensions".

In what might be a glimpse of the iron fist in the velvet glove, Barnier then says: "On subjects of such importance, it is essential to ensure that we are on the same political line before seeking technical solutions". He adds: "I want to be clear again on these issues: these three priority subjects for the first phase of the negotiations are inseparable". (http://www.eureferendum.com/blogview.aspx?blogno=86537)

The Cabinet of the United Kingdom seems impervious to all this. A Free Trade Agreement (FTA) will be easy to set up because we already comply with all the EU requirements they say. Yes we do TODAY but what about on 30th March 2019? It is not as simple as the Cabinet ministers make out.

The day after the United Kingdom leaves the European Union it becomes an external country (a third country) and the European Union has no alternative but to protect itself from what might be sub standard, rogue or unsafe imports. It is that simple.

The National Audit Office has suggested that there might be as much as a £34 BILLION hit to tax revenue if the new HMRC CDS (Customs Declaration Service) system is not ready in time as it might not be (https://www.nao.org.uk/wp-content/uploads/2017/07/The-Customs-Declaration-Service.pdf)

There is still a significant amount of work to complete, and there is a risk that HMRC will not have the full functionality and scope of CDS in place by March 2019 when the UK plans to leave the EU. HMRC recognises this risk. The decision to leave the EU could increase the number of transactions by around 200 million and more than double the number of traders having to go through customs processes. HMRC faces some significant challenges to deliver the programme within the current timetable. 

This blog has hardly scratched the surface of all the issues involved.

The idea of 'No Deal' would be, in my view, madness. Farmers, Drug Manufacturers, Travellers, Airline Companies could all be seriously constrained by such a policy. 

The United Kingdom needs to opt for a safe interim 'staging post' to protect itself from such a calamitous outcome. It needs to opt for EFTA/EEA membership where much of the danger can be avoided in the short to medium term.

This will be discussed in the next blog.