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Leaving the Customs Union Must not Leave UK Tech Firms Tied up in Red Tape

New techUK paper outlines how Government can shape new smart Customs arrangements and maintain frictionless cross-border trading.

Ensuring that any new Customs arrangement with the EU works for tech is the key recommendation of techUK’s latest report, released yesterday. Leaving the Customs Union: Challenges and Opportunities for a Digital Global Britain, outlines recommendations to stimulate the UK tech sector and create a new world-leading customs system to power Digital Global Britain.

About half of digital sector goods exports, and one-third of services exports, are with EU countries. The UK tech sector has highly integrated supply chains across European and global markets. Twenty per cent of all the goods and services produced by these firms are bought by businesses and consumers around the world; two-fifths of these in the EU.

The report highlights key tech sector concerns on potential issues arising as the UK leaves the Customs Union, including additional contractual obligations on tech companies, added costs for imports and exports, increased time for goods in transit, and risk of unexpected interruptions in supply chains and distribution channels.

Key recommendations for a customs regime fit for Digital Global Britain detailed in the report include:

  • Ensuring EU Exit Negotiation Goals on Customs for the UK tech sector are met:
  • The Government should commit as a minimum to join the Customs Union as part of any transitional agreement to the new trading relationship with the EU, for a minimum of three years.
  • The Government should explore ways to use existing European and world wide regulatory mechanisms based in the EU as a way of ensuring that additional Customs Checks are not required (such as REACH and ECHA).
  • Global Britain shaping International Trade and Customs standards
  • The Government must ensure that the UK can benefit from key aspects of WTO rules, and publically commit to signing the Information Technology Agreement on day one of leaving the EU.
  • The Government must increase its participation in key forums for the pursuit of positive international trade alliances on digital issues, such as G20 discussions on digital trade and the WTO ITA 20th anniversary summit.
  • Towards a Smart Customs System
  • The UK Government should make a bold commitment in a revised Customs 2020 plan to be recognised by start-ups, scaling SMEs and large businesses as a world-leading digital customs authority in the use of new technologies, with a particular emphasis on first time exporters.
  • techUK encourages the Government to undertake an immediate review to investigate how new digital technologies such as blockchain and machine learning can play a role in delivering a world-leading data-driven frictionless customs system.

Antony Walker, Deputy CEO at techUK, said:

“Customs arrangements matter for the UK tech industry. Leaving the Customs Union presents the Government with an opportunity to rethink how the UK can create a world-leading Customs regime, which harnesses the latest developments in digital technologies.

“The UK’s digital sectors have thrived as a result of our international relationships and connected complex supply chains, but companies need concrete reassurances on what the future customs regime looks like outside of the European Union.

“Now is the time to work together to understand what industries need and create a new world-leading custom regime that will underpin a prosperous forward looking Digital Global Britain.”

Check out techUK’s Brexit hub to see our other work on Brexit

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