Brexit shock: EU poised to stop trade with UK when the transition period ends

The UK government announced its plans for a new £705m post-Brexit border infrastructure but the EU is poised to step in to stop trade after the transition period is over if they detect unfair competition, it has been revealed. Last week Cabinet Minister Michael Gove said the Government had been “laying the groundwork for months” to help Britain’s borders after the end of December.

But concerns have been raised about how the EU could stop trade between the UK if they think there is not a level playing field.

Speaking to Express.co.uk Nick Witney, senior policy fellow at the European Council on Foreign Relations, said: “My suspicion is we will end up with a deal which provides minimal legal cover for shipping goods in either direction without quotas but with the British side not actually ready to implement any new system of vetting goods for regulatory requirements.”

Mr Witney explained there are concerns Britons will start exporting goods to Europe which are subsidised providing unfair competition for European producers.

He said: “More initially in the short term the EU is worried that the possibility of all sorts of people from around the world could sell stuff into Europe via the UK and undercut European producers.

“Or send stuff into Europe that is not the right standards.”

He added how Europeans will be “poised to step in and stop things coming if they detect any reason to think that it’s unfair competition which would be a very messy situation to live with for months and years.”

Mr Witney said the UK and EU will end up with a compromise by the end of the year rather than a breakdown.

He thinks this will happen because of two reasons, firstly the British side will not be ready at the end of December for trade between the EU.

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International Trade Secretary, Liz Truss, feared the new border arrangements with the EU will not be ready in time for January.

Her leaked letter addressed to Rishi Sunak and Mr Gove highlighted “four key areas of concern” about the Government’s Brexit border plans.

Mr Witney said: “I think we are way behind the curb and that will certainly increase the internal pressure on the Government to find a way not to have an absolute breakdown at the end of the year.”

Ms Truss raised concerns that UK ports will not be prepared to carry out full import checks when they come into place in July next year.

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She also warned that some ports could be exposed to smuggling from January.

Mr Witney also highlighted how the brand knew IT system to help check goods heading to the EU from the start of January has not been tested yet.

When Britain leaves the European Single Market in January, the Government has planned to put a new IT system in place to manage the additional border checks that are needed.

The system, known as Goods Vehicle Movement Service (GVMS), requires those transporting goods to have a GVMS reference number before being able to leave for the EU.

The reference numbers will be checked by customs officials at locations which are unspecified at the moment.

HMRC is not planning to test the new system until November, a month before Britain will leave the EU Single Market.

Mr Witney said the most critical thing to ensure is that on the 1 January goods can continue to move in both directions without tariffs and quotas.

He added: “I suspect that the EU will be prepared to cut some provided that they’re convinced we’re sincere in wanting to get our plans properly in place.

“And provided that they will reserve to themselves the right to step in at any particular point and say ‘no we’re not having any more of whatever it is because we’re not happy’.”

The UK is set to leave the transition period at the end of December.

However, if a trade deal is not agreed by the end of the year the UK will face the prospect of tariffs on exports to the EU.