Any deal is better than no deal
Any deal is better than no deal
BLOG · BY TTF CEO DAVID HOPKINS · 28 July
There is not long to go until the UK leaves the EU on the 31 December 2020. Join us in advocating for a deal by contacting your local MP.
Writing about Brexit has become a characteristic feature of this job. The referendum was held just 5 months after I took the role and it has dogged our activity ever since. Unsurprisingly, like everyone else, I am mightily tired of it.
Perhaps this nationwide apathy explains why, this month the Government relaunched its campaign to “Get Ready for Brexit”. It is a PR-led attempt to try to sound upbeat and breathe new life and enthusiasm into a process many had put to the back of their minds, with the COVID crisis obviously taking precedence.
The question this campaign raises though is: as we do not yet know the full terms of departure, how can we get ready?
It’s a fair point, there is still a lot to sort out. There are many things we do know, however. The Government has made it clear that it is determined to push ahead with all the things that are not so well received in business, such as increased bureaucracy, increased costs, and increased time to move goods across borders.
Much of this can be seen in the new publication for the Border Operating Model here: https://www.gov.uk/government/publications/the-border-operating-model
TTF will be republishing our guidance across all of the operating areas for the timber supply chain and how these are affected later this week. Much of this has already been covered, and members need to start taking action now to ensure they are ready from day one.
To top all this off, Government also published the UK Global Tariff regime. On the face of it, this is a positive document for trading with the rest of the world, with the stated intention to lower the tariffs currently in existence and simplify the framework.
However, in the event of a no deal exit it will have exactly the opposite effect on imports from Europe, our main trading partner, imposing duty on many products that have been duty free within the single market. A closer look reveals some obvious problems for the wood sector
First, the UK Global Tariff introduces tariffs on imports of European plywood and laminated timber products of between 6 and 10%. This will reduce the competitiveness of these products in the market – possibly pushing buyers towards competing non-timber alternatives or products from outside Europe with lower transparency and worse track record on performance –
Secondly, it seems to provide a disincentive to manufacturing certain products and adding value within UK borders. For example, manufacturing of certain joinery items such as door sets, windows or I-beams, can use laminated sections as components or feedstock. These components could now face tariffs of up to 10% adding costs to the manufacturing process.
However, paradoxically, importing fully manufactured items of joinery or I-beams will attract considerably lower tariffs of zero to two per cent. Under this scenario, what would be the point of maintaining manufacturing in the UK – with the associated costs of machinery, trained skilled staff and so on – when one could simply import the products from abroad?
This scenario seems a far cry from the vision of a competitive global Britain that the Government likes to promote.
TTF has raised this issue with the British Woodworking Federation and the Structural Timber Association who are also running campaigns with their members.
Of course, it may not come to this. The scenario described above could easily be solved by negotiating and agreeing a comprehensive free trade deal with the EU, thus eliminating the need for tariffs.
So, we are asking for your support to write to your local MP and ask them to put pressure on the Government to secure a deal and protect those areas of the timber supply chain that are threatened by this tariff regime.
Below you will find a template letter and here you will find a link to contact your local MP. It is always more powerful for local business to highlight the issues to their local MP and to amplify this through multiple timber businesses across the country.
We don’t think it is too much to ask. The referendum campaign was fought on the basis that we would get a deal and that doing so would be the easiest trade deal in history. We are simply asking for the Government to drop the no-deal rhetoric and work constructively.
We can then all move on and place our focus firmly on a positive future for the UK timber sector.