The idea that Britain can leave the European Union and maintain frictionless trade with the bloc of 27 countries is officially dead.
Cabinet minister Michael Gove warned UK businesses on Monday that the government will subject goods from the European Union to border controls starting at the end of this year, acknowledging the end of frictionless trade with the country’s biggest export market.
“The UK will be outside the [EU] single market and outside the customs union, so we will have to be ready for the customs procedures and regulatory checks that will inevitably follow,” Gove said during a speech.
Frictionless trade, which allows goods to move between countries without facing tariffs or border checks, is a key feature of the European Union. Brexit supporters had claimed that Britain could maintain the arrangement, or something close to it, even outside the bloc.
But that dream was predicated on the advent of new technology that would allow trucks to whiz though virtual border checks at speed, or misplaced hopes that the European Union would grant privileges to the United Kingdom that are reserved for members of the bloc.
Prime Minister Boris Johnson’s decision to diverge from EU rules and regulations and not seek a tight economic relationship with the bloc after Brexit was the final nail in the coffin of continued frictionless trade.
“The moment the government’s position became ‘we just want a free trade agreement’ it meant that the UK was advocating increased trade and border friction between the UK and EU,” Sam Lowe, a senior research fellow at The Centre for European Reform, said on Twitter.
Gove made clear Monday that businesses should prepare for import controls on goods moving between the United Kingdom and the European Union when the Brexit transition period ends on December 31. Traders will be required submit customs declarations, Gove said, and shipments could be stopped for inspection.
The border checks could mean delays and more red tape for UK businesses, and foreign companies doing business in Britain, that have suffered from nearly four years of uncertainty over Brexit. The UK economy didn’t grow at all during the final three months of last year, according to data published Tuesday, and business investment has stalled since the June 2016 referendum.
It has long been the position of the UK government that it would leave the EU single market and customs union following Brexit, but British officials have been less forthcoming about the costs to business that would follow.
Former Prime Minister Theresa May, for example, attempted to negotiate a deal with Brussels that would maintain “as frictionless as possible” trade while taking her country out of the European Union.
Johnson signed a political declaration with the European Union last fall that called for arrangements that “will create a free trade area, combining deep regulatory and customs cooperation, underpinned by provisions ensuring a level playing field for open and fair competition.”
Now, the limitations of such arrangements have been made clear.
“We are naturally disappointed that the promise of frictionless trade has been replaced with a promise that trade will be as seamless as possible,” Elizabeth de Jong, UK policy director at the Freight Transport Association, said in a statement.
The biggest crunch point is expected to be the English Channel crossing between Dover and the French town of Calais. The port of Dover handled 2.5 million trucks in 2018 and another 1.7 million passed through the nearby Eurotunnel under the channel.
Companies must now prepare themselves for new barriers that will be erected in less than 11 months if the UK government sticks to its pledge not to request an extension of the transition period from Brussels. De Jong said that government should now help business.
“It is encouraging for industry that [Gove] said he does not underestimate what needs to be done and that he has his civil servants focused on capturing and providing industry with the details we need, we hope within the timeframes we need to prepare,” she said.
Michel Barnier, chief Brexit negotiator for the European Union, said last month that friction at the border would increase as a natural result of choices made by the UK government. Checks will be needed on food products and live animals, for example, to ensure they meet EU standards.
“The UK has chosen to become a third country,” he said during a speech. “It has chosen to create two regulatory spaces. This makes frictionless trade impossible. It makes checks indispensable.”