Missed opportunities
By Pete North - March 16, 2021
I really don’t like going over old ground because it doesn’t really achieve anything and what’s done is done. You will recall, though, that when the Brexit debate finally got round to acknowledging the EEA Efta option, it was mangled to include a customs union. They pointed to Norway and noted there are still customs checks at the Norway Sweden border.
Of course were Norway in a customs union it wouldn’t have made any real difference. “Customs” formalities are about far more than revenue. They include security, prevention of illegal immigration and import of controlled/prohibited goods.
But what the debate missed was the several developments in the pipeline. there was of course the Union Customs Code and the move toward mandatory e-declarations and then the evolution of Single Window. Then, as the EU boasts today, the ICS2 system.
On 12 March and 15 March, respectively, an important amendment of the agreements with Switzerland and Norway as regards the customs security measures was adopted. The original agreements of 2009* have been updated to maintain a high level of security and safety at the external borders and to keep the equivalence of the customs security measures in trade with third countries. The amended agreements reflect key developments of the EU legislation relevant to the risk management and security, mainly as regards the deployment of the Import Control System 2 (ICS2) of the EU.
Both amended agreements are applicable from 15 March, and create a basis for Switzerland and Norway to join the ICS2, alongside EU Member States.
ICS2 is an essential EU instrument for managing entry security and safety border controls in the customs field, supporting the EU’s customs pre-arrival security and safety programme. It enables Member States’ Customs to better assess risks on the basis of common information and thus better protect the EU and its citizens against hazardous or dangerous imports and from illegal trade.
Switzerland and Norway have agreed to apply the same security and safety measures in force in the EU, including being part of ICS2, and therefore trade between these countries and the EU will be exempt from the requirement to lodge entry and exit summary declarations. Switzerland and Norway will also apply equivalent standards for the Authorised Economic Operators, including security and safety standards and facilitation measures in respect of security-related customs controls.
This will ensure both the continuation of smooth flows of goods between both countries and the EU, and thus the facilitation of the legitimate trade and a high level of security in the supply chain.
Essentially this is, for Norway, the missing link for the level of frictionless trade that EU members enjoy. It doesn’t completely eliminate all remaining formalities and Norway will continue to maintain a border post, but it will not concern itself with customs revenues and origin inspections.
As far as the Brexit debate went, frictionless trade wasn’t actually a requirement. It just had to be within tolerance to maintain existing trade and any subsequent areas of concern could be addressed in an additional Northern Ireland protocol. But having failed to comprehend how the EEA system works, politicians, “experts” and journalists alike insisted the only way to crack the nut was a customs union. Thereby, they turned a viable exit proposition into BRINO and something no Brexiteer could support.
That, though, is all ancient history. We have left the single market and while Norway and Switzerland are improving their trade and moving forwards, the UK, though its own incompetence is going backwards.
Notwithstanding our departure from the single market the TCA still commits both parties to a Single Window, and had HMG anticipated the problems, they might have had some sort of plan in that direction. Instead of putting Brexit behind us, our trade is collapsing, and by the looks of it, our threadbare trade relationship is already imploding too.
Politically and economically this is unsustainable yet the Tories continue to play dangerous games, unable to admit there is even a problem. There is no way this ends well.