The EU trade commissioner has warned European companies that they need to do more to prepare themselves for the jolt of the UK leaving the bloc’s single market, saying businesses risked a “logistical nightmare” if they did not grasp the new reality.
Phil Hogan told the Financial Times that companies and public authorities should “reactivate” contingency plans they developed over recent years for coping with a no-deal Brexit, saying that the British government’s decision to seek a more distant relationship with the EU meant there would inevitably be a big change to trading conditions.
“I am very concerned that there’s not sufficient planning in place presently,” Mr Hogan said in an interview. “The last thing we want to see is a logistical nightmare for our exporters at our ports and airports through not being properly prepared.”
His comments emphasise the limits of what can be achieved for business by the tariff-free, quota-free trade deal that Britain and the EU will seek to negotiate.
Talks on the new agreement begin on Monday in Brussels, as the two sides seek to settle the terms of their new relationship before the end of Britain’s post-Brexit transition period on December 31.
Boris Johnson has emphasised that his overriding priority in the talks is to secure Britain’s economic and political independence from the EU, even if that means frictions that complicate life for the country’s businesses.
David Frost, the UK’s chief negotiator, said last month that the country was ready to bear the cost of new barriers to trade.
“We aren’t frightened by suggestions there is going to be friction, there is going to be greater barriers,” he said. “We know that and have factored this in and we look further forward — to the gains of the future.”
Mr Hogan emphasised that Mr Johnson’s decision to rule out any extension of the transition period — a standstill arrangement that keeps the UK temporarily in the EU single market and customs union — meant that there was no time to lose.
“Even with a deal, there is on December 31, January 1, a new trading environment,” he said. “There’s a lot more paperwork and logistical information that’s going to be required now by both sides.”
Contingency planning “should be reactivated by all member states and all stakeholders” that have “very strong” trade ties with Britain, he said, adding that this was “very important on the UK side as well”.
Mr Hogan said that there “has been probably a bit of relaxation in the last couple of months” after EU leaders and Boris Johnson last year reached a deal on Britain’s EU exit treaty and signed a joint political declaration on future relations.
He added he was worried that businesses were “going to run into serious problems unwittingly and in an unplanned way at the end of the year”.
Michael Gove, the UK Cabinet Office minister, has acknowledged that up to 50,000 people will have to be recruited to carry out customs paperwork under a new trade deal.
Brussels has emphasised that EU-UK trade will inevitably face new checks and controls even if the two sides go as far as possible in smoothing bureaucracy.
British and EU goods will need to pass through customs posts, companies will have to file declarations, and products will need to be inspected to ensure they comply with the necessary regulatory standards.
A future EU-UK agreement on plants, animals and food could reduce the volume of inspections but not eliminate them entirely.
Michel Barnier, the EU’s chief Brexit negotiator, warned last week that the bloc would be strict in applying “rules of origin” checks at the border to make sure goods “really are British”.