Brexit: cross-Channel delusions

13/04/2017

The paper is citing Guy Platten, chief executive officer of the UK Chamber of Shipping, who is warning that the UK is facing an "absolute catastrophe" if it does not sort out a "frictionless and seamless" border at Dover and other ports.

Elphicke, though, characterises this as the Guardian praying for catastrophe. Yet, he says, "at the Dover frontline we're working hard with the port, operators & hauliers to be ready on Day One".

What this delusional man doesn't realise is that the efforts at the "frontline" are largely irrelevant. It is Platten who has the measure of it, saying of the efforts made: "I think the UK government gets it, but I am not so sure other countries do".

This is actually the issue. Outbound customs processing is the least of the problems facing ports such as Dover. Even that is bad enough: non-EU trucks at the moment have to go through customs checks in Dover and it can take 20 minutes for paperwork to be cleared for each vehicle. If there are problems with VAT or random customs checks, the truck can be delayed for hours, days or weeks.

But what happens the other side of the Channel which is far more important – as our exporters will find when they try to come to terms with the UK's new status as a "third country". Customs checks will be routine, and far more rigorous than on this side of the Channel. And then there is the issue of food imports which must be treated separately.

This, as we reported yesterday, has been grossly underestimated as a problem, the extent of which is charted in our latest publication, Monograph 17: Food exports to the EU. There is no easy or obvious resolution to this problem.

Thus, Platten is right in saying that: "It is a massive problem that we need to get solved", but he then goes off the rails when he declares: "It is in the political gift to have a frictionless or not have a frictionless border. It is a human construct".

That it is a "human construct" is true enough, but the facts are quite brutal. Between the UK and France lies the Channel which becomes the external border for the EU. The rules for admission are simply not negotiable. The EU has invested far too much in its rules to make an exception for the UK.

Platten thinks that one solution may be customs checks "at the point of dispatch or point of sale" but he also adds that there is nowhere in the world with a customs model similar to Dover-Calais. A frictionless and seamless border is predicated on an electronic system that would pre-clear "trusted traders" in and out of the UK.

This is the authorised economic operator system, but there is also that unspoken hurdle in the lack of data protection adequacy, which has yet to be decided by the Commission. But without that issue being resolved, electronic clearance is going nowhere.

And that, of course, assumes that the UK end will hold up which, as Jim Harra affirms to the Treasury select committee, is by no means assured.

Then, on the more general issue, we need to look at the system from the EU's perspective. If it does start making exceptions, then other border countries will demand the same treatment. Relations with countries such as Russia and Turkey are already strained and to start playing favourites is not going to improve matters. The EU will hold the line, because it must.

We must also look at the issues from the perspective of EU Member States – such as France – and also Ireland. If the UK is to be faced with a massively increased requirement for computer processing, so too must the national systems within the EU.

Upgrading is a national responsibility, and will involve considerable expense. Yet there is no evidence that our European trading "partners" are prepared to commit the investment or the resources. Even if they willing to cooperate, there is then the small matter of lead time, and trialling new systems to make sure they operate smoothly.

When it comes to delusion, though, there is nothing quite like The Sun which, on the basis of what they learn from Platten, reports that: "Brits travelling to Europe by ferry post-Brexit unlikely to face further checks".

That, of course, is by no means assured. If relations break down, we might find that travel to EU Member States requires visas, in which case there will most certainly be extra checks. And we know from experience as recent as last year, when the French increased security after the Nice terrorist incident, what that entails.

Even without that, if commercial traffic gets snarled up, private vehicles will also be caught up in the queues. It is unlikely that ordinary travellers will be able to escape the disruption.

Interestingly Platten is predicting that cargo and passenger ferry sailings to and from Dover would have to reduce unless an electronic system is ready on time do deal with the increased number of customs declarations. But this is not limited just to this one issue.

We've pointed this out before, but it cannot be repeated often enough. The volume of "ro-ro" traffic across the Channel and through the tunnel depends entirely on the existence of the Single Market and the absence of border controls. There simply is not the physical infrastructure to deal with the checks that will be involved when the UK becomes a third country.

These checks will become the new reality – they cannot and will not be negotiated away. These will involve significant delays, which primarily affect roll-on, roll-off (ro-ro) shippers. What are also termed driver accompanied loads are particularly vulnerable to delays: not only is the load held up, the vehicle and driver are kept out of play as well, adding to the expense.

Queues cannot be a permanent feature of our trade so something will have to give. If there are significant capacity shortfalls in inspection facilities, then there will have to be restrictions on the level of exports. Shippers may be limited either on a first-come, first served basis, or the situation may be managed by using a quota system.

In the longer-term, ro-ro shipping may prove impracticable or uneconomic and we may shift to containerised transport, with redistribution away from the Channel ports, and a change in the nature of the goods exported to the EU market. This will particularly affect food exports, and we may see a move away from sales of highly perishable foods.

However much the media and the politicians may want to avoid this reality, it isn't going to go away. Whether Brexit actually means Brexit, the world is never going to be the same again – that goes with the territory. This is something we'll have to live with.