Andrew Denton, CEO of the Outdoor Industries Association (OIA), discusses the potential outcomes of a customs partnership or a streamlined customs arrangement as post-Brexit negotiations continue
I’ve had good feedback on my article on Brexit featured in the last issue – apparently most of you are as confused as I am, trying to make sense of the options and navigate a commercially successful route through. As a remain or leave supporter, our industry needs to continue growing and selling outdoor gear worldwide and right now that is by no means a clear option!
The Brexit team are trying to get cabinet agreement on either a customs partnership or a streamlined customs arrangement with technology-based solutions, known as ‘maximum facilitation’, which sounds like something out of a dystopian future movie! Cabinet can’t agree on either, and the EU is saying that even if they can, there is no clear indication either would be acceptable to their side.
In case you’re interested, a customs partnership is the option closest to remaining in the customs union and involves us paying EU tariffs as standard but with the option to negotiate separate deals outside the EU, which could, potentially, offer rebates or additional deals via applying for a refund if your goods are eligible. Hardly sounds inspiring does it – more red tape regardless and does anyone really think people will be flooding to give us better deals than the largest trading block in the world…?
Alternative is the technology solution, a ‘frictionless trade boarder’ where tariffs and fees might differ and be charged higher or lower but with a technological solution – similar in a way to the Norway-Sweden borders perhaps, where no physical barriers exist but monitoring technology does instead. Think a super big version of the congestion charge?
The result is not dissimilar to the first solution with us having some option to negotiate our own deals, sort refunds or charges at a later date, but it mitigates the queues from Dover all the way to the M25 and takes the issue online to be a cyber paper pushing one not a lorry park at the docks. It has the added benefit of solving the Ireland border too.
The issues? The technology doesn’t exist yet, the UK would lead the world with this innovative solution.
So it’s simple – all we need to do is invent a new technology monitoring system that’s robust enough to meet the approval of the World Trade Organization (WTO), the EU and Ireland, implement it at our borders and test the system to the approval of all, then negotiate new separate trade deals with all the important trading countries, sort out the refund/charge gap between those new tariffs and the EU ones and Bob’s your uncle… except that will take years, maybe longer than this government has got in power and maybe longer than the post-Brexit extension period of grace.
I revert back to my last article – whatever the solution, it will be an extended fudge, a messy mix of compromises because the leave side will need to accept a close relationship with the EU, that probably includes similar, if not identical, tariffs and regulations, to preserve the trading benefits. Yet the remain side have to accept the vote demands independent institutions and border control. So, to give the impression of that border control, we will have to implement a huge new layer of bureaucracy over an almost identical set of EU tariffs and rules. It won’t even begin to answer the ‘spirit’ of the leave vote – less rules and regulations – it will just be a monumental fudge that the PM can point to and say, ‘We gave you independence’.
These macro issues are so far above what we can influence that it makes you feel powerless – what’s it got to do with my business? And of course, even the largest of our industry feels like that – heck the car industry feels like that. What we can do is make the best of it. Recent spending figures showed that in the top ten leisure spending areas income was down in seven of them – eating out, drinking out, entertainment – all down. What was up? Local holidays and active leisure. Riding a bike? Up. Taking the family for a walk or local holiday? Up. The more pressure the EU mess puts on the economy the more the inclination seems to be to stay local, get outdoors and try to forget about it – the economy may not be in great shape, but as an industry we are weathering it better than many. Of course, to benefit you need to be nimble and innovative – there are still plenty of stores and brands felling a very tough trading position out there, but there is no doubt that a positive trend for the UK getting outside is helping us. How you benefit from that is down to your commercial strategy.
Our latest OIA push to help? I have just confirmed a meeting with the Health Minister for next Friday – you may have read in the papers, often with Jamie Olivers name, the government are considering child obesity as an Ofsted measure. One of the OIA’s key lobby points is you should not be classed as an ‘outstanding’ school if your kids are not fit, healthy and active. It’s a small step, we hope to convince the Health Minister to not only measure obesity but to test a school on how active its kids are. Turning the tide of inactivity in the next generation – that’s one of the core values of the OIA. Let’s hope this tide is easier to turn than a new customs union! Write to me at email@example.com