Businesses are becoming exasperated at the lack of progress in Brexit talks and are pausing or cancelling investment in the UK.

A week that many had hoped would bring progress in the talks has now come and gone without a breakthrough.

Employers group the CBI says 80% of surveyed members feel Brexit uncertainty has already had a negative impact on investment decisions.

On Friday, Theresa May held a conference call with 150 top bosses.

She wanted to reassure them that she was still confident of striking a deal and that she recognised their concerns.

The chief executive of one company on the call told the BBC the PM had “done a good job and had a reassuring tone” while another said there had been “nothing new in her message”.

Of the members surveyed by the CBI, 39% said they would trigger additional contingency plans if there was no further clarity by November, while a further 19% said it was already too late.

Nicole Sykes, the CBI’s head of EU negotiations, says the situation is urgent, pointing to concrete examples of cancelled projects: “We heard from a fashion house that wanted to set up a new factory in the UK. £50m of investment, cancelled.

“But we’re also talking about some small things. We heard from a Northern Ireland farmer who wanted to build a new machine to make their operations more efficient, grow competitive. Again, that’s been cancelled. So we really are talking about real economic consequences.”

Despite the PM’s attempts to calm nerves, many businesses are in the process of stepping up their preparations for leaving the EU without a deal at the end of March next year.

Supermarket executives told the BBC they were weighing up the viability of flying in fresh food from outside the EU to avoid potential log jams at the ports like Dover.

Different companies reached different conclusions.

One said: “We haven’t started chartering aircraft yet but we are looking at it. We are very worried about Dover so we are also looking at alternative ports like Felixstowe as an alternative.”

Another major supermarket executive said that air freight isn’t the answer: “There simply isn’t the capacity at a moment when every other industry will be trying to do the same thing.”

However, they felt that the problem is potentially so severe that they do not believe it will come to that.

“There is no way the UK or EU would allow the UK to run out of food, but we are looking at alternative ways to transport fresh food, as stockpiling is not an option.”

The car industry is also very sensitive to supply chain hold-ups.

Industry body the SMMT described the lack of progress in talks as hugely disappointing and said it had “grave concerns”.

Car makers are looking at alternative ports, increased warehousing and moving the supply of some parts outside the UK.

BMW has already brought forward an annual shutdown of Mini production to coincide with the UK’s departure from the EU, while Jaguar Land Rover has warned of the potential loss of tens of thousands of UK jobs.

It’s not just business which is pessimistic about a deal being struck in time.

International Trade Secretary Liam Fox this week reiterated his prediction that a no deal scenario was more likely than not.

“I’ve said that the chance of a no deal is 60% and I’m not changing that view,” he said.

He also told a gathering of business leaders this week that great opportunities in international trade await the UK outside the EU.

Most of the audience that night will hope he got the first bit wrong.

UK firms near point of no return

Source: BBC News

eCommerce is the big elephant in the Customs room. It is a trade area that is exploding and the global Customs systems are not designed to handle this extreme increase of transactions due to changed consumer behaviour. The difference between the postal process and other couriers is another thing that will change over time. Sweden started to demand VAT, and thus declarations, on all transaction already early this year. Other countries is about to follow.

Now according to reports, the United States government is to tighten up the checks made on imports to the US with a specific focus on ecommerce and marketplaces items coming in. Dan Wilson has written about this.

In particular, this reflects growing tension on trade between the USA and China, a significant increase in mail imports over the course of this year and political pressure from the Trump administration. Needless to say, customs checks on ecommerce imports could mean delays on shipping.

What is rather surprising is the dramatic increase in imports that has occurred this year and a lot of these obviously come from China. The US Customs & Border Protection agency (CBP) reports that they have increased from 1.4m daily at the start of the year to an estimated 2.1 million daily shipments in August. The CBP has predicted that this volume could rise further to 2.5m shipments per day during the peak season that’s on the horizon.

In the USA, imported goods are exempt from duties under the personal daily exemption rules and the de minimis threshold in the US is set at $800. On October 3rd, the United States Senate sent legislation to the White House to sign that will require the US Postal Service to send advance electronic notifications related to every incoming international shipments to CBP.

The same bill also demands that, by December 31st this year, that data on 70% of all international mail must be transmitted before the goods reach the US border. And by December 31st, 2019, that threshold will rise to 100% of imports sent by mail.

This sounds like a huge change to how customs checks on ecommerce imports are operated in the United States and an enormous task that will likely lead to delays. It will be interesting to know anecdotally how it works over the next few weeks and months as it rolls out. In particular, one of the political motives relates to counterfeit goods because President Trump has promised to curb the imports of same to help US manufacturing businesses.

Source: TB

EU’s Barnier says ‘yes’, Irish border issue could sink Brexit deal.

The thorny issue of the border between Ireland and the British province of Northern Ireland could sink the negotiations on Britain’s exit from the European Union, the EU’s chief Brexit negotiator Michel Barnier said on Friday (19 October).

“The answer is yes,” he said when asked on France Inter radio if the Irish border issue could cause the negotiations to collapse. “I believe we need a deal. I’m not yet sure we’ll get one. It is difficult, but possible.”

EU’s Barnier says ‘yes’, Irish border issue could sink Brexit deal