LONDON: July 04, 2018. According to management consulting company Oliver Wyman (OW), the red-tape costs from any new arrangement with the EU Customs Union will outweigh the benefits gained from negotiating free trade deals that cover imports from non-EU countries.

In a new report, co-author and OW Partner Lisa Quest says the annual direct costs of new tariffs and non-tariff barriers will be around £27 billion for UK firms, equivalent to 1.5 percent Gross Value-Added (GVA), and around £31 billion for EU27 firms, equivalent to 0.4 percent GVA).

The report also estimates 70 percent of the extra costs arising from trade barriers will be incurred by just five UK business sectors: financial services; automotive; agriculture, food & drink; consumer goods; and chemicals & plastics.

Quest also answers the question what would happen if a new Customs agreement was broadly the same as the current EU Customs Union, saying it would likely reduce the UK red tape cost increase to £17 billion (1.0 percent of GVA) and the EU27 impact to £14 billion (0.2 percent of GVA).

Meanwhile with the new UK Customs Declaration Service (CDS) set to begin replacing the current system next month, HM Revenue and Customs, the British International Freight Association and software supplier Agency Sector Management (ASM), have been conducting seminars throughout Britain to inform supply chain stakeholders of the process changes they can expect after Britain leaves the European Union.

“CDS is an essential upgrade to cope with an expected increase in declarations post-Brexit, which will benefit the freight forwarding sector as it continues to modernise,” said ASM chairman Peter MacSwiney.

“Alignment with the Union Customs Code (UCC) will enable the trade facilitations required by UK business today - with Brexit taking place next year the changes are well timed for a UK logistics sector in a stage of significant transition,” he added.

ASM’s ‘Sequoia’ software supports Air & Ocean Import and Export; External Temporary Storage Facilities; Customs Freight Simplified Procedures; Customs Warehousing; New Computerised Transit System; Designated Export Place; Air WayBills; Forwarding Documentation; Job Costing and Invoicing; Worksheets and a Web Services Application Programme Interface.