LONDON – The British government said Friday it will delay bringing in full border checks on goods coming from the European Union to relieve pressure on businesses hammered by the coronavirus pandemic. But the U.K. once again ruled out delaying its full economic break with the bloc beyond the end of this year.
The U.K. left the now-27-nation bloc on Jan. 31, but remains part of its single market for trade and other economic structures during a transition period that lasts until Dec. 31. After that, British firms trading with the EU will face customs checks, border inspections and — unless there is a free trade deal — tariffs.
The bloc is the U.K.’s biggest economic partner, accounting for about half of Britain’s trade. In February the U.K. government announced that goods coming from the EU would require inspections and customs declarations starting in January.
But on Friday the government said border checks would be introduced in stages. Importers of most goods will be able to delay submitting customs declarations or paying tariffs for up to six months, though they will have to keep customs records. From July 2021, traders will have to make full declarations and pay tariffs at the point of importation.
The government estimates that businesses will have to fill out 200 million new customs forms a year under the new rules.
The government also announced 50 million pounds ($63 million) to help set up a huge new border industry to deal with trade red tape, including customs brokers and freight forwarders. The U.K. says it will build new customs and border facilities for all the checks — a process that has been set back by the pandemic.
Britain’s economy is already reeling from the impact of the coronavirus pandemic. The Office for National Statistics said Friday that economic activity shrank by 20.4% in April, the first full month after a nationwide lockdown was introduced to slow the spread of the virus.
All areas of the economy were hit during the month, in particular pubs, education, health and car sales. The month-on-month decline was unprecedented and, adding the still substantial 5.8% decline in March, means the U.K. economy is around 25% smaller than it was in February.
The U.K. and the bloc are trying to negotiate a free trade deal to kick in after that, but talks have stalled amid wide differences over key issues, from fishing rights to competition rules.
British Prime Minister Boris Johnson is due to hold talks with EU chief Ursula von der Leyen and other top officials of the bloc by video call on Monday in a bid to break the impasse in trade talks.
Britain has firmly ruled out seeking an extension to the transition period, which was permitted under a U.K.-EU divorce agreement, raising the prospect of a "no-deal exit that many British businesses say could be devastating.
EU commission vice-president Maros Sefcovic said Britain's Michael Gove, the minister in charge of Brexit preparations ‘’could not be clearer'' there would not be an extension although the EU was ready to grant one. Sefcovic and Gove co-chaired an EU-U.K. joint committee meeting on Friday.
“He explained that this was the promise which was given to the British citizens in the electoral campaign, and also Prime Minister (Boris) Johnson was very explicit on this issue," Sefcovic said.
Gove said: “We have informed the EU today that we will not extend the transition period.”
Opposition politicians in Britain condemned the government's refusal to seek an extension. The leaders of Scotland and Wales, Nicola Sturgeon and Mark Drakeford, said in a letter to Johnson that “exiting the transition period at the end of the year would be extraordinarily reckless.”
Speaking during a press conference, Sefcovic said some positive results were achieved during Friday's meeting but insisted there was still lots of work to do.
Asked about the border checks, Sefcovic said the EU is determined to protect its single market, customs union and financial interests.
He said Britain had yet to provide details about how it would implement an agreement between the two sides to ensure that the border between EU member Ireland and the U.K's Northern Ireland was kept free of customs posts and other barriers.
The agreement effectively keeps Northern Ireland inside the EU's customs territory and will require some checks on goods moving between Northern Ireland and the rest of the U.K. — a politically sensitive issue that the British government is reluctant to discuss.
“We need to move from aspiration to operation and fast," Sefcovic said.
Petrequin reported from Brussels.
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