News

Meeting the costs of Brexit

Published: 17 Feb 2020 00:01

Rural Economy at risk.

The UK Government should give an immediate commitment to cover the cost to business and government of leaving the EU, Rural Economy Secretary Fergus Ewing said.

With the UK Government acknowledging there will be additional checks and certificates required for trade with the EU, Mr Ewing said it is vital they commit to meeting the resulting additional costs incurred by Scotland becoming a ‘third country’.

As such, Scottish and UK exporters of products of animal origin are likely to need an Export Health Certificate (EHC) to export to the EU as of the end of the transition period.

The seafood industry has estimated that EHCs and the associated customs clearance and transportation documents will cost it between £7 million and £15 million a year. There will also be additional costs for relevant authorities to recruit and train sufficient numbers of Certifying Officers to meet the increase in demand for EHCs as a consequence.

Speaking ahead of a visit to Belfast for a meeting with UK Government and Devolved Government counterparts, Mr Ewing said:

“With the UK Government finally accepting Brexit will result in additional border checks and certification, they now need to commit to meeting the costs for businesses and authorities that come as a consequence. The requirement for each consignment of our seafood exports to be accompanied by an EHC provides a good example of the impacts and costs.

“Fish, crustaceans and molluscs are Scotland’s third most important sector in terms of goods trade to the EU – amounting to £694 million in 2018.

“The imposing of EHCs is a significant non-tariff barrier for businesses, particularly in the seafood sector, that trade with the EU. Even with our risk-based approach to certification, the costs and administrative burdens for the sector and local authorities is expected to cost up to £15 million a year, placing the long-term viability of many businesses at risk.

“With more than 150,000 consignments of products of animal origin exported to the EU each year, we continue to press the UK Government to negotiate a derogation or find a way to significantly reduce the bureaucratic burden of export certification. Failing this, the UK Government should cover the cost to exporters and authorities.”

James Withers, Chief Executive of Scotland Food & Drink:

“Additional bureaucratic costs and the associated risk of delays is a real concern. Costly new checks and processes - and potentially tariffs on some of our food products - will act as a major new barrier to trade with our biggest single export market. Scotland sold £2 billion of food and drink to the EU last year, and frictionless trade is particularly important for Scotland’s unrivalled stock of perishable produce, where time is of the essence.”

Background

The Scottish Government has made numerous representations to the UK Government to ask them to support close alignment with EU legislation and seek a derogation from EU EHC requirements in the event of ‘no deal’ and to meet the increased costs. However, the UK Government has so far indicated its preference for divergence, thus increasing the need for ECHs.