If there is a deal - supply chains

[Paranoidmarvin]

I have been trying to get my head around January. Forgive me as I’m not as well informed as some people.

If there is a deal. Will that mean that supply chains are not affected. I’m thinking in terms of food supplies especially after what happened in shops when lockdown happened.
Or will that depend on what sort of deal we get ?

No - supply chains are affected whatever the deal, but the impacts will be worse without one.

There are broadly three aspects of Brexit which affect cross-border supply chains:

1. Customs and veterinary declarations/inspections. Britain is leaving the single market and the EU customs union, so these declarations and inspections will happen from January regardless of whether there is a deal, or not. It is possible that without a deal, inspections and enforcement at French ports (in particular) will be more aggressive.

1. Import duties. These are taxes paid by the importer, and mean that EU goods imported into the U.K. could become more expensive (and vice versa). In a FTA, tariffs would be lower or zero; this reduces both the administrative burden and the cost.

1. Regulatory issues. For eg, the registration and inspection of goods as safe to be placed on the EU of U.K. markets, and the question of permits for heavy goods vehicles for circulation in Europe. Some of these will be the same with or without a deal, but some will be made much worse without a deal - for eg the lorry permit issue (the EU only grants a small number of permits to third country trucks).

There are lots of other technical issues that are going to be a nightmare for exporters of goods but that's it in a nutshell.

Tl;dr Brexit has a big impact on supply chains but no deal makes this much worse.

Typo in point three: safe to be placed on the EU or U.K. markets

the EU only grants a small number of permits to third country trucks

It isn't an EU matter. It's also not expected to be an issue.

@Mistigri thanks. That is really helpful. Thanks for taking the time to write that out for me.

Brilliant summary Mistigri. Really clear

Mistigri is correct

Fishes - can you elaborate please? And can you also explain why it's not an issue.

@FishesaPlenty

the EU only grants a small number of permits to third country trucks

It isn't an EU matter. It's also not expected to be an issue.

Please elaborate.

Elaborate on the permit system? It's not an EU system - the EU doesn't decide who gets permits.

Elaborate on the permit system? It's not an EU system - the EU doesn't decide who gets permits.
Indeed
Its a bit like Eurovision
Each EU country will independently give the UK nul points

because UK lorries will have the same rights as Afghans

Unless BJ/DC spits his dummy and refuses access to the UK for EU vehicles the expectation in the industry is that UK vehicles won't have to rely on the permit system when delivering/collecting EU/UK.

Currently only around 15% of the vehicles carrying out EU/UK freight journeys are UK registered anyway. If we lose cabotage and cross-trade rights in the EU (and lose some of our exports to the EU of course) then that proportion will be even lower. We're not likely to want to stop those EU trucks coming here, and we're not likely to want to stop them going back loaded, because to do so would be to shoot ourselves in the head, never mind the foot.

It's a potential issue for those UK hauliers who do run UK-registered vehicles into the EU, but not particularly an issue for the rest of us to worry about.

Fishes
You are assuming that the drivers will still want to do the UK run when their margin has been wiped out by M20 loo roll costs

Their margin would only be wiped out if they continued to charge the same. As a long-term change rather than a one-off problem transport companies will increase their rates accordingly.

As a long-term change rather than a one-off problem transport companies will increase their rates accordingly
Indeed
increased commodity prices in the UK
what we were told was project fear

The Road Haulage Association is still concerned about the ECMT permits issue (for lorries), and I guess I'd defer to their expertise.

twitter.com/rhaduncanb/status/1321010271066968064?s=21

@Mistigri

The Road Haulage Association is still concerned about the ECMT permits issue (for lorries), and I guess I'd defer to their expertise.

twitter.com/rhaduncanb/status/1321010271066968064?s=21

bilateral agreements with individual states, a contingency with @EU_Commission or FTA agreement.

As I said, industry expectations.

"industry expectations"?

Duncan Buchanan himself calls these possible outcomes.

Yes, he's given 4 possible outcomes. The first I assume he's presenting as unworkable, which leaves the other 3 as 'industry expectations'.

This is his tweet:
"Extra ECMT permits to any extent that will make a difference is not going to happen.
There are 4 outcomes possible.
ECMT quota limited to 2088 lorries (for 90,000 lorries), bilateral agreements with individual states, a contingency with @EU_Commission or FTA agreement. @RHANews"

He just lists the possible outcomes. I don't see any hint of expectation or judgement as to likelihood.

3 of those 4 outcomes don't involve ECMT permits and the fourth is being presented as insufficient for our needs.

Aren't we getting a bit late to not yet know which outcome is happening?

I think the RHA guy's point in that tweet is that the status quo (2000-odd permits) is plainly insufficient, and that all the other possible outcomes require an agreement of some sort.

Now, there may well be an agreement - this obviously isn't my area of expertise and I genuinely don't know how likely it is that we'll get one - but it's around 8 weeks until the Christmas holidays and we still don't know.

But regardless - the original point stands - without a deal of some sort, there are many Brexit impacts - in addition to border formalities - which will disrupt supply chains.

The chemicals industry is another which will be severely affected for eg due to the massive cost of double registration of chemical products, some of which might become unavailable in the U.K. post Brexit.

I'm concerned about data protection and international data flow. It's not clear what will happen and could see financial and insurance companies who rely on international markets leaving the UK.

@Skippii

I'm concerned about data protection and international data flow. It's not clear what will happen and could see financial and insurance companies who rely on international markets leaving the UK.

What makes you think they haven't ?

@wherearemychickens

Aren't we getting a bit late to not yet know which outcome is happening?

Yup, but comments about it earlier on were decried as project fear