How do the new Brexit trade agreement checks affect the economy?
CGTN Europe spoke to Vicky Pryce, International economist and business consultant
Category
🎵
MusicTranscript
00:00 Well for more on this let's speak to international economist and business
00:03 consultant Vicky Price. Hello Vicky, thanks for joining us. Eight years on
00:08 these Brexit border checks are coming into effect. What's taken so long?
00:13 It's the cost really and the difficulty that loads of importers are going to be
00:17 facing from here on. The interesting thing is that those checks have been
00:20 postponed something like five times. This is the sixth attempt and even this sixth
00:24 attempt is not going to be the full list of checks that could be carried out. It's
00:29 going to be quite measured. Only the high-risk ones, things like live animals
00:35 for example, are likely to be inspected. So what happened in January is that
00:39 everybody needed health certificates to bring in all these items that you
00:43 mentioned before. Whether it's meat and whether it's flowers actually, plants,
00:50 eggs as well. When you think about the various categories that are out there
00:54 you needed a health certificate before they came in. So that started in January
00:58 finally. The Europeans have been having those checks anyway since we left
01:03 properly. So they've been there since the summer actually of 2021 but we hadn't
01:07 imposed any on the other way, things coming in. So it is going to be a problem
01:13 for many importers. It is going to increase costs but how much that cost
01:18 will rise by is still uncertain because even now the government is proceeding
01:22 quite cautiously. Well they say time is money. If we look at the practical
01:26 implications, how much time is this going to add into that chain of supply?
01:33 That's a very interesting question because of course it all depends whether
01:37 a particular consignment, things coming in from from Europe, is perceived to be
01:42 high-risk or perhaps fall into the category of less check. Something between
01:46 one and thirty percent which is what we hear of even the low-risk ones at some
01:50 point rather than go a hundred percent. That means that you have to take
01:53 everything out of a particular lorry. You don't know whether your consignment is
01:56 going to be the one that you're bringing in that is going to be affected. You
01:59 don't know whether by the time that consignment comes in there's still
02:02 someone working at the customs desk if you like, at the border desk to do that
02:07 inspection or they're qualified to do it. So it could actually be quite a long
02:11 delay for a number of people and what everyone's been concerned about right
02:15 now is not so much if they know that this is what's going to happen and
02:19 it's going to take a certain amount of time, it's going to cost this much, fine.
02:22 At least they can possibly adjust but at present they don't know. Will they be
02:26 subjected to this? Will it be someone else? How is it all going to move in
02:30 terms of how long it actually takes for any consignment to be inspected and then
02:34 be allowed forward? All these things are up in the air right now and everyone
02:40 today has been saying well let's see what happens on day one and let's get
02:43 some idea of what the actual cost will be and then we'll decide whether we
02:46 carry on in fact bringing things in from the EU. What we know that the markets
02:50 don't like uncertainty. Is it a given though that the British consumer should
02:55 expect to ultimately pay more from goods imported from the EU? The main reason
03:01 for paying more is not so much tariffs because we don't have any tariffs, it is
03:05 for the cost of doing all these things and of course there is a place where
03:09 everything needs to be checked, there are people you have to pay for so they're
03:13 paying for that service if you like because of course the agreement that we
03:17 have with Europe is that there is no tariff imposed on anything that goes
03:22 either way between the UK and Europe and between of course Europe and the UK so
03:28 depending on whether it's an import or an export but I'm afraid this costs add.
03:32 As with exports the cost of you know having to have big queues at the channel
03:41 ports to move across to the EU has also added to cost quite considerably so if
03:47 you look at what the estimates are the government itself thinks that perhaps
03:50 you would be something like just over 300 million pounds a year however for
03:56 the importers however quite a lot of other estimates suggest it could be over
04:01 a billion possibly two billion and that is a big big hit particularly for
04:05 smaller firms. All right well thank you very much much appreciated.
04:09 Vicky Price is an economist and business consultant.