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British leadership in prestigious European research projects have been hit by the continuing row over the Northern Ireland Protocol and trade border with the UK.

As a result, the EU is preventing British scientists from joining the €95 billion (£80 billion) Horizon Europe research funding programme.

The UK bid to join the group as an associate member has been delayed because of the continuing post-Brexit dispute.

What is Horizon Europe?

The European Commission now says UK scientists cannot hold leadership roles because the UK’s membership of the flagship Horizon Europe (HE) funding network has not been ratified.

Horizon Europe is the EU’s key funding programme for research and innovation, with a budget of €95.5 billion.

It tackles climate change, helps to achieve the UN’s Sustainable Development Goals and boosts the EU’s competitiveness and growth.

Leadership of Gaia project lost

According to The Guardian newspaper, this has resulted in a Cambridge University scientist losing his coordinating position in the European Space Agency’s Gaia mission, which maps the nearly two billion stars in the Milky Way.

Astrophysicist Nicholas Walton has been forced to hand over his leadership role on the scheme because of the continuing row over Northern Ireland’s Brexit arrangements.

Dr Walton, a research fellow at the Institute of Astronomy, was the lead in a €2.8 million pan-European Marie Curie Network research project but must now take a back seat.

He is just one of a handful of British physicists approved for a grant from Horizon Europe.

Option of moving to the EU

The newspaper also reported that Carsten Welsch, a physicist at Liverpool University, must either move to the EU or hand over leadership of his research programme to an EU institution.

Dr Walton’s coordinating role came with the opportunity to be part of the European project researching the €1 billion successor to Gaia, Esa’s Voyage 2050 programme.

The business secretary Kwasi Karteng is reportedly reviewing the UK’s membership of Horizon Europe following the EU’s refusal to ratify the deal in December 2020.

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The UK Government has announced it will introduce a new law to change the post-Brexit trade deal for Northern Ireland, known as the Northern Ireland Protocol.

Foreign Secretary Liz Truss insisted the bill would be legal under international law, but the EU has warned it could trigger a trade war and will pursue a legal challenge against the UK if the Government proceeds with its plans.

The deal governs how goods enter Northern Ireland from the rest of the UK and was negotiated by the Government after the Brexit vote in 2019.

The Foreign Secretary told Parliament the move would change the deal rather than scrap it, to resolve “the grave situation in Northern Ireland”.

But Maros Sefcovic, the Vice President of the European Commission hit back and said it would “need to respond with all measures at its disposal” if the UK went ahead with the legislation.

What is the protocol?

• It is designed to protect the Good Friday Agreement by avoiding a hard border on the island of Ireland.
• The protocol allows goods to move freely between NI and the Republic of Ireland. NI remained in the EU’s single market for goods.
• But NI also stayed in GB’s market too because it is still part of the UK.

What is the Irish Sea border?

• NI’s border with the republic also became the UK’s new border with the EU after Brexit. There needed to be a border somewhere on the island of Ireland because the UK and EU follow different customs rules.
• As a compromise, the UK and EU agreed to a deal that would see customs checks at NI’s ports, creating what is now referred to as the ‘Irish Sea border’.

In October last year, the EU set out its own proposals, which included:

• An 80 per cent reduction in checks on food products arriving in Northern Ireland and halving the amount of paperwork.
• Legislation to allow the trade in medicines between GB and Northern Ireland to continue.
• Relaxing rules so chilled meats, such as sausages, could still be sent across the Irish Sea.

In return, the EU wanted extra safeguards to prevent products from Great Britain crossing into the Republic of Ireland.

The UK rejected this offer, saying it would “worsen the current trading arrangements”.

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A recovery in UK exports reported in February by The Office of National Statistics (ONS) has been short-lived, according to a new survey.

It comes as figures from Germany suggest post-Brexit trade between the two countries has dropped sharply.

German-British Chamber of Industry and Commerce members cited logistical problems related to Brexit as the biggest concern in a 2022 business outlook survey.

The latest Exporter Monitor by Coriolis Technologies and the Institute of Export & International Trade (IOE&IT) data also suggest that the number of exporters in the UK fell in April 2022 by 3.1 per cent.

The survey reveals that a total of 61,915 businesses exported in April 2022, with a combined turnover of £4,857,689,565 and 13,302,762 employees.

At the same time, the number of employees working for exporting firms declined, by nearly six per cent, while exporter revenues dropped by nearly four per cent compared to March 2022.

Outlook for trade looks difficult

The outlook for the coming months looks difficult for UK exporters, especially given the current geopolitical situation.

The survey suggests that there could be a mild uptick during May, but the June and July forecasts show that exporter counts will flat line at best. At worst, any May growth will be short-lived.

The Financial Times has also reported that UK trade with Germany has dropped sharply since 2016, lagging behind overall import and export levels in both countries

Data from Destatis, the German office for national statistics, revealed that German exports to the UK fell 3.9 per cent in March compared with February and were down 0.3 per cent on March 2021.

Compared with March 2019, exports to Britain were down 27 per cent, even though Germany’s overall exports grew by 16 per cent, the report said.

Is this because of leaving the single market?

The figures reflect the gradual decoupling of the UK manufacturing economy from the EU single market, said Ulrich Hoppe, Director-General of the German chamber.

“From a German perspective, the UK is to some extent being taken out of EU supply chains . . . because it has become more complex and expensive [to trade with UK] and that has an effect on bilateral trade,” he said.

The UK fell to the bottom of Germany’s top 10 trading partners for both exports and imports, and dropped to 13th place as a source of German imports in 2021.

Mixed confidence levels for UK businesses

Half of the companies surveyed were positive or very positive about their current and expected future performance in the UK, with half planning to increase their investment and to recruit more staff.

However, more respondents expect the UK economy to continue to ‘cool’ in the coming 12 months: 38 per cent expect a worsening performance and only 23 per cent expect it to perform better.

Further delays on border controls at UK ports caused by Brexit have led to some of the country’s biggest ports threatening to sue the Government.

According to the Guardian newspaper, they are considering legal action to recover the costs of building border control posts they fear will never be used, after confirmation that post-Brexit import checks will be delayed for the fourth time.

Brexit Opportunities Minister, Jacob Rees-Mogg, announced that after being delayed three times, physical checks on fresh food and plants from the EU, which were due to begin in July, have been pushed back to the end of 2023.

New strategy in the autumn

According to the news website, he announced plans to digitise all checks and paperwork at the border, with a new strategy published in the autumn.

The decision means that the UK will effectively continue to rely on the EU to monitor food and plant safety. Food producers said they were being placed at a disadvantage compared with European competitors who would have less red tape to deal with.

The British Ports Association (BPA), a lobby group for the industry, said it was concerned the expensive border posts, subsidised with nearly £200m from the taxpayer, may never be used.

‘White elephants’ claim

Richard Ballantyne, the BPA’s Chief Executive, said ports had rushed to get infrastructure ready on time: “This announcement is a major policy change, meaning the facilities will effectively become white elephants, wasting millions of pounds of public and private funding”.

Checks on meat were due to start on 1 July and on dairy on 1 September, with all remaining goods including fish and composite foods to be subject to checks from 1 November. A date for controls on live animals has yet to be agreed.

The operator of Eurotunnel, through which a quarter of all trade between the UK and EU passes, welcomed the announcement.

‘Question of fairness’

“We would have had to check more certificates, more declarations, and would not have been able to board trucks which didn’t have the right paperwork to go with the goods,” said John Keefe, director of public affairs at Getlink.

However, the National Farmers’ Union called the move “unacceptable” and said it was another blow for British food producers, as they grapple with soaring costs.

“This is a question of fairness,” said NFU’s President, Minette Batters, calling import controls crucial “to the nation’s biosecurity, animal health and food safety”.

The British Veterinary Association also criticised the move, saying it “flies in the face not only of common sense, but also of the government’s commitment to preserving high levels of animal and human health in the UK”.

For help and advice with Brexit related matters, please get in touch with our expert team today.

Businesses have had to get to grips with many changes to trade with the EU in the post-Brexit era and a new study has suggested that new rules introduced last year have caused a “major shock” to UK-EU trade.

According to the latest LSE Centre for Economic Performance study, imports from the EU to the UK fell by a quarter relative to those from elsewhere in 2021.

The LSE analysed trade patterns of around 1,200 products between the UK and the continent and also found that there had been a “sharp drop” in the number of relationships between UK exporters and EU importers.

The researchers have said that the findings are surprising given the fact that the UK has delayed the introduction of many customs checks on EU goods until this year.

Exports to the EU are recovering, but the study team said that much of this was down to an increase in sales of costly machinery.

When looking at the wider variety of goods sold to the EU, this was in decline by up to 30 per cent, with research suggesting that the administration of the new rules made it less attractive for smaller businesses to sell low-value items in European markets.

Thomas Prayer of the LSE said: “It appears the UK simply stopped selling a lot of products to smaller countries in the EU.”

What new challenges has Brexit created?

Having reviewed the various factors behind the decline in trade, the LSE researchers pointed at three primary factors limiting trade:

• Additional red tape
• New customs controls
• Taxes and tariffs hitting European businesses hard.

Could things get worse for EU-UK trade?

At the moment full border checks have still not been implemented and these remain delayed until July at the moment.

There are already rumours growing that this final set of border checks may be delayed further in the months ahead to support trade and prevent a sudden surge of additional costs and administration.

However, given the main trade barriers appear to be the controls and costs and work involved in checks and red tape there are clear fears about the volume of exports between the UK and EU in future.

Nevertheless, the EU remains a close trading partner with the UK and many opportunities still exist for businesses to enter new markets on the continent with the right support and advice.

The Government has relaxed customs rules for goods heading to Ukraine after aid donations to the embattled country were held up due to Brexit confusion.

The rules have been eased after post-Brexit bureaucracy left lorries with supplies meant for Ukraine stuck at the border in Dover for days.

A report on The Independent news website said organisations sending goods to Ukraine will be able to make oral customs declarations, or a ‘declaration by conduct’, such as passing through a ‘nothing to declare’ green channel.

An oral declaration requires an individual to identify the relevant goods to an HMRC officer.

Goods can bypass electronic system

According to a report, this means goods can now bypass electronic customs declarations which have been blamed for holding up lorries trying to reach Europe.

Other customs formalities, such as needing to notify HMRC when the goods have been exported, were also lifted.

The Government said the rule changes – which will be temporary – will apply to aid being sent to any destinations besides Russia and Belarus.

Provided the goods are not exported to, or through, those two countries, then these simplified processes apply to qualifying goods regardless of the destination “to allow maximum flexibility to get aid to where the need is greatest,” an HMRC statement said.

Electronic customs declaration waived

The move replaces the need to lodge an electronic customs declaration to HMRC through CHIEF or CDS and applies to designated airports and south coast ports in the UK.

Britain’s exit from the EU single market and customs union led to extra paperwork for goods crossing the border between the UK and the EU.

A new electronic system, the Goods Vehicle Movement Service (GVMS), was launched in January to facilitate the declarations needed to cross the Channel.

The system has caused big queues on the roads to Dover, according to hauliers, who have complained that even lorries with the right paperwork have been taking 15 minutes to clear the border.

Ensuring humanitarian aid is fast-tracked

Lucy Frazer QC MP, financial secretary to the Treasury, said: “Government advice remains that the best way to help the Ukrainian people is to donate money through the Disasters Emergency Committee or other trusted charities.

“However, we appreciate that people and businesses may still wish to donate aid directly to the region, so this new customs easement will ensure that humanitarian aid is fast-tracked from GB to help those most affected.”

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The Solicitors Regulation Authority (SRA) has issued a reminder to the legal sector of its compliance duties in the wake of the Government’s imposition of sanctions on Russia.

The new financial sanctions prevent law firms from doing business or acting for listed individuals, entities or ships without a licence.

The SRA warns that the onus is on firms to check the most up to date financial sanctions lists before offering services or undertaking any client transactions.

The Authority also advises that firms should not deal with any funds or make resources available to any individual who is subject to an asset freeze as a result of the sanctions.

The SRA has warned that firms may be spot checked to ensure compliance and breach of the financial sanctions could result in disciplinary action, a criminal prosecution or a fine by the Government’s Office of Financial Sanctions Implementation (OFSI).

Law firms are also reminded of their obligation to report any client to OFSI if they suspect they are a ‘designated’ person under the financial sanctions’ regime.

Exemptions apply for reasonable fees for legal advice and, in such circumstances, firms will be required to seek a licence from OFSI.

The SRA also offers advice to law firms when reviewing client lists and considering who they feel comfortable acting for, stating that: “the general position is that firms can choose who they act for, and can choose not to act for any reason (unless unlawful, for example under equalities legislation).

“The question of terminating a current retainer is one for the common law and turns on whether there is a ‘good reason’ for the termination.

“The current situation with the conflict in Ukraine is clearly novel, and whether there is a ‘good reason’ for terminating a client retainer in response will be a matter for the courts to decide, on the individual facts. Either way, from a regulatory point of view, our concern is to ensure that the firm has carefully considered the legal position and also understood and mitigated any risks to the client.”

The UK has moved into the second and final phase of accession to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), it has been announced.

Membership will give British businesses unlimited access to a global market worth £8.4 trillion each year.

Here’s what you need to know.

What is the Comprehensive and Progressive Agreement for Trans-Pacific Partnership?

Launched in March 2018, the CPTPP is a free trade agreement between 11 major Pacific Rim Nations, including Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.

According to the latest statistics, the free trade area – described as “one of the largest and most exciting free-trading clubs in the world” – contains more than 500 million people and generates an estimated £8.4 trillion in revenue each year.

If successful, the UK will be the first non-founding member to join the partnership.

What are the benefits of joining?

Assession will cut red tape and costs for British businesses trading with Trans-Pacific members.

Under the agreement, up to 95 per cent of import charges and tariffs will be reduced or cut completely, while the rules of origin will be simplified providing 70 per cent of the materials or components used come from participating countries.

For example, 99.9 per cent of UK exports to the CPTPP will be eligible for tariff-free trade.

Membership will also give professional and digital services businesses unrivalled access to international markets.

What’s the catch?

Like membership to the EU, members must comply with strict product and financial regulations, such as food and health and safety standards. Most British suppliers, however, will already meet the minimum level of compliance under existing UK laws.

“Major milestone”

Commenting on the announcement, Secretary of State for International Trade Anne-Marie Trevelyan said: “CPTPP is one of the largest and most exciting free-trading clubs in the world. Today’s announcement is a major milestone for us joining this dynamic group of economies and means the finish line is in sight.

“I look forward to visiting Asia next week and flying the flag for Global Britain by holding valuable trade talks with key partners across the Indo-Pacific region and pushing to secure CPTPP accession by the end of the year. This is just one aspect of our Indo-Pacific strategy, which will benefit businesses and consumers across every part of the UK and help us to level up at home.”

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The Government is planning to build a central hub to “encompass everything traders do” to support businesses in the wake of Brexit.

Known as the Single Trade Window, the digital service will allow international traders to input all of their import and export data in one place.

Here’s what we know so far.

What is the Single Trade Window?

The Single Trade Window is a central digital service that allows traders to upload all of their data relating to imports and exports, instead of having to complete forms in multiple systems run by different border agencies, such as HM Revenue & Customs (HMRC), DEFRA, and the Home Office.

It comes after the introduction of full customs controls on 1 January 2022, significantly changing the way traders do business overseas. This includes the requirement to make full import customs declarations and pay tariffs at the point of import, as well as using the correct country code for the country of origin and the country of dispatch when completing a customs declaration.

According to recent research, more than half of businesses were not confident in trading with the European Union after full controls came into force.

What is the benefit of the Single Trade Window?

According to the Government, the UK Single Trade Window will reduce the cost of trade by streamlining trader interactions with border authorities. Some of the benefits include:

• Allowing the trader or intermediary to submit all border data needed in a standardised format. This would mean submitting only once to border authorities through a single portal.
• Putting the onus on government to facilitate data sharing amongst border authorities and agencies to then receive the information they need.
• Eliminating the need for the user to submit the same data to different border authorities or agencies, via multiple different portals.

Kevin Shakespeare, Director of Strategic Partnerships and International Development at the The Institute of Export & International Trade, said the Single Trade Window could also “reduce delays and supply chain costs” for businesses.

Focus on “simplification”

Commenting on the new service, Phillip Stansfield, a Deputy Director on the UK’s Single Trade Window programme, said: “At the heart of our ambitions is simplification.

“Our aim is to make the lives of Government departments and traders easier, giving you more time for what really matters which is running your business.”

Further reading

Click here to learn more about the UK Single Trade Window.

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