Thursday, 5 May 2016

EU: Not even good for trade

The UK Chamber of Shipping accordingly has a keen interest both in the functioning of the Internal Market and in the facilitation of trade between the EU and the rest of the world and has participated in the Joint Customs Consultative Committee for the last 40 years. The government asked them if they thought that that the EU strikes the right balance between regulating imports and exports and facilitating international trade. This is what they said.
We take this question to apply only to trade with countries outside the EU, as the legal concepts of import and export do not apply to movements of goods within the internal market. The answer is “no”, for two main reasons. Firstly, the EU generally exhibits a readiness (and often an enthusiasm) to regulate, heedless of the cost to international trade.

The requirement to report incoming imports to Customs prior to arrival in the EU, which took effect in 2011, for example, was imposed without any regard to the compliance cost to the trade. Nor were the “benefits” ever set out in anything other than the most superficial terms. The plain purpose for introducing the regime was to match a similar requirement that had been imposed (similarly without regard to cost) in the USA. 
Similarly, in 2006 (through Regulation 1013/2006), the EU created an entire regime of controls on exports of waste – including plastics and paper for recycling, which comprise a significant volume of UK exports. This regime operates in parallel with, but entirely separately from, the general regime of Customs controls of exports, leading to incompatible processes and duplicate compliance costs for shipping lines and other businesses affected. Trade facilitation was completely disregarded.

Secondly and more generally, the EU model for regulating imports and exports relies on a transaction-based control model – ie an individual declaration for every consignment – which may suit trucks crossing the EU’s eastern frontier but is unhelpful in the context of carriage by sea, where a single ship carries many thousands of containers.
Moreover, alongside the requirement for electronic declarations, the EU control model also prescribes an “accompanying document” (for Transit and Export purposes, and with a similar arrangement for excise) which must travel with the goods in order to serve as a basis for customs controls during the journey. Again, this may suit road haulage but is entirely inappropriate for carriage by sea (where mid-journey inspections do not happen and documents travel separately), but the EU insists upon it, regardless of its obvious faults and excessive cost. 
To my mind this rather lends weight to to the suggestion that global regulation for the free movement of goods is overtaking the need for the EU and rather than facilitating better trade with the rest of the world it is a major obstacle to to it. It seems to me that the notion that we have free movement of goods is something of an empty sentiment and we are at a disadvantage by way of being an island and conducting much of our trade by sea.

Not for the first time do I conclude that the EU has little interest in bringing down barriers to the rest of the world or even streamlining and harmonising its own procedures and processes. It seems we are now in the position of having to comply with unnecessary regulation which in the main is a duplication of effort and runs counter to the global harmonisation agenda. We are seeing a global single market emerging and we are held back from full participation.

The irony is that in 1975, the europhiles said we needed to be in the common market so that we would have a say in the rules. Yet now it is becoming clear that we do not have a say in these global rules but that 1975 logic no longer applies. In 1975 there was a fear that we would be left behind and dictated to. Now it would appear that's what they wanted all along. It was always about little Europe.

I would also venture that the EU will not seek to remedy its voracious appetite for regulatory barriers. Should it ever cooperate with the global harmonisation agenda it would reveal what we have known all along. There is no need for the EU - and no reason for us to remain in it.

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