ParcelHero: “flawed” Brexit deal could cost UK importers £5.25bn
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ParcelHero has slammed the UK’s trade agreement with the EU, calling it “flawed”. The international parcel delivery company says the post-Brexit trade deal will cost UK importers £5.25bn in lost imports and extra costs , and want a six-month waiver on proof of origin requirements until the issues with the agreement are remedied.
In its comprehensive 9-chapter report, available to read in full on its website, ParcelHero says that Brexit has increased costs for business and consumers, restricted the UK’s free trade with Europe, reduced the UK’s exports to Europe, slowed deliveries between the UK and the EU, made returning deliveries more difficult and costly, as well as reduced the rights of UK consumers buying from the EU.
The report covers VAT, free trade, returns, carrier surcharges, consumer rights, and border checks at Northern Ireland, but also dedicates a considerable portion of its text to the rules or origin requirements in the UK-EU trade agreement.
According to ParcelHero, 35% of UK retailers and traders importing from the EU are experiencing major problems. The parcel delivery company says it expects a 35% drop in EU-UK e-commerce imports, which could cost UK importers £5.25bn in lost imports and extra costs.
As ParcelHero explains in its report, if a British importer is bringing in goods to the UK from the EU that were made outside the Union, or even that have a number of components that originated beyond the EU, then the product does not qualify as duty exempt. The same rules apply when UK businesses export to the EU.
As a consequence of the rules of origin requirements, tariffs will have to be paid, costing e-commerce fashion store ASOS an estimated £15m this year.
ParcelHero’s report also cites February’s ONS figures, which show 35% of businesses are now facing importing challenges because of disruption at the UK borders. Similarly, 25% of exporters recorded disruption at borders.
As far as ParcelHero are concerned, the aforementioned tariff and non-tariff barriers in UK-EU deal mean that David Davis’s suggestion that Brexit will only have upsides is “a hollow claim”.
Moreover, the ParcelHero report refers to “a ridiculous situation” whereby shoppers could still be purchasing goods from the EU even when they buy from a .co.uk site, incurring unexpected extra costs in the process.
The Government needs to issue clear advice to UK shoppers and importers now, give the Consumer Centre UK some teeth and, ideally, introduce a six-month waiver on proof of origin requirements until the details of this rushed and flawed agreement are properly ironed out. It’s also clear that Consumer Centre UK needs teeth if it is to defend the rights of UK shoppers buying from EU online sellers. It must be granted the equivalent status to the EU’s ODR (Online Disputes Resolution) system that formerly covered UK citizens. If not, British shoppers will be too anxious to shop in the EU and will miss out on thousands of products in the future.