Weekly Brexit Update – 14 May 2021

[Brexiter]

Brexit disruption forces German exporters to think again – FT (13 May)

• Despite tariffs not applying to most goods, trade between the UK and EU has been disrupted by higher shipping costs, transportation delays, health certificate requirements and more complex customs requirements at the border.
• On 12 May the ONS said that British exports to the EU for the first quarter fell 18.1% compared to the previous quarter, while imports from the EU to UK were down 21.7%.
• This reflects the steady decline of the UK as a trading partner for the EU since the 2016 Brexit referendum with its share of exports from the bloc falling from 17% before the vote to 14% last year.
• The number of FDI projects into the UK from the period of 2016-2021 was up 12% compared to the previous 5 years while the EU’s was up 33% in the same period.

Brexit: NI Protocol challenge to be heard in High Court – BBC (14 May)

• A judicial review to the NI protocol brought by unionist political leaders is due to begin in High Court on Friday 14 May who allege that it breaches the 1800 Act of Union and 1998 Good Friday Agreement.
• The grounds of challenge are that the NI Protocol breaches Article 6 of the Act of Union whereby there would be free and frictionless trade across and within the entirety of the United Kingdom, and also that it undermines the cross-community consent principle of the Good Friday Agreement.
• The government’s defence is likely to include ‘implied repeal’ whereby the NI Protocol, as the later law, is considered to have repealed the contradictory earlier law.
• Reserved judgment is expected within the next few months however this will likely be appealed and could ultimately be heard in the Supreme Court this year.

Brexit: Export issues ‘easing as Irish ports’ – BBC (13 May)

• Irish officials have stated that although complexities remain, the post-Brexit difficulties of getting British goods across the border are easing.
• Figures in January show that the value of British exports has fallen by £1.5 billion compared to the same period last year.

Post-Brexit trade deals means firm will miss out on Freeport benefits – Guardian (11 May)

• Freeports are designated areas that allow businesses to receive incentives relating to customs, tax, planning, regeneration and infrastructure in an attempt to boost global trade as well as the local economy surrounding them.
• Post-Brexit deals with 23 nations include clauses that prohibit manufacturers in Freeport zones from utilising the tax breaks that the zones enable, although it does not apply to the UK-EU trade deal.

Brexit has cost UK nearly £16 billion in trade of goods since the 2016 referendum, The Centre for European Reform estimates – Evening Standard (13 May)

• The Centre for European Reform estimates that leaving the single market and customs union has reduced UK trade by £7.7 billion between December 2020 and March 2021 this year which is on top of the £8 billion hit to trade suffered between the June 2016 vote and December 2020.