FOLLOWING MONTHS OF proclamations that the UK would not be seeking an extension to the transition period, senior minister Michael Gove seemed to officially confirm yesterday that this was its final answer.

Although Gove said that he was ‘formally’ declaring the UK’s decision, there is still time to do a u-turn – in fact Maroš Šefčovič, the EU commissioner Gove declared the UK position to, tweeted that ”the EU remains open” in relation to the extension.

The UK government also simultaneously announced that it was going to stagger introducing custom checks from 1 January next year, in an effort to give businesses a break amid the Covid-19 pandemic, and as figures showed that the UK economy shrank by a fifth between March and April.

What this means in practice is that UK companies will have the option of delaying submitting customs declarations and making tariff payments on their exports to EU nations for up to six months, until July 2021.

The new, staggered timeline announced by the UK government yesterday looks like this:

• From January 2021: Traders importing standard goods, covering everything from clothes to electronics, will need to prepare for basic customs requirements, such as keeping sufficient records of imported goods, and will have up to six months to complete customs declarations. While tariffs will need to be paid on all imports, payments can be deferred until the customs declaration has been made. There will be checks on controlled goods like alcohol and tobacco. Businesses will also need to consider how they account for VAT on imported goods. There will also be physical checks at the point of destination or other approved premises on all high risk live animals and plants.
• From April 2021: All products of animal origin – eg, pet food, honey, milk or egg products – and all regulated plants and plant products will also require pre-notification and the relevant health documentation.
• From July 2021: Traders moving all goods will have to make declarations at the point of importation and pay relevant tariffs. Full Safety and Security declarations will be required, while for SPS commodities there will be an increase in physical checks and the taking of samples: checks for animals, plants and their products will now take place at GB Border Control Posts.

British officials said they would consider extending this arrangement beyond that again – but only if a second wave of the pandemic paralysed UK economic activity into next year.

EU officials, meanwhile, have announced no reciprocal reprieve for exports from the 27 member states to Britain.

But – crucially – this option to delay post-Brexit custom checks doesn’t apply to Northern Irelan:

This approach is for GB/EU trade. This approach does not apply to the flow of trade between Northern Ireland and Ireland, or between Northern Ireland and GB which is covered by the Withdrawal Agreement.

So from 1 January, custom and SPS checks will be in place for products coming from Great Britain into Northern Ireland (but they will be as ‘light-touch’ as possible).

“It’s like for people in Northern Ireland when they watch TV and there’s an ad for insurance,” says Seamus Leheny of the Freight Transport Association.

And it has an asterisk at the bottom that says ‘not available in Northern Ireland’. That’s the case with this phased deal.

He said that he confirmed with the Border Delivery Group that this would not apply to Northern Ireland.

“So the Protocol on the UK Command Paper stands, so from 1 January, Northern Ireland is the first to dip its toes in the water with regards to import formalities with goods leaving GB for NI,” he said.

This effectively means that Northern Ireland will experience the first custom checks implemented as part of the EU-UK trade deal (if we get one).

Leheny says that Northern Ireland businesses will be under more intense pressure because of this, and has called for targeted funding for businesses in the North because of it.

“We’re going to be the pilot project. 

There’ll be a lot of eyes looking across the water to Northern Ireland from London, and they’ll be looking to see how the system works here and learn from it before they implement it in Great Britain. 

He said that the custom system the UK is going to use in Dover-Calais is pretty much identical to what they’ve proposed for GB-NI, so the UK needs to get it right in the North by allocating the right resources to make it work.

“It will look badly, and I think it would lead to anxiety in GB if they see that the systems don’t work in Northern Ireland.

It’s a bit like seeing a fire spread from a distance if they see the system not working – chaotic, costing money. It would do nothing for confidence in the UK.

Remind me about the extension?

After the UK formally left the EU on the 31 January, it entered what is called ‘the transition period’ – which kept the UK in the EU’s Single Market and Customs Union from the time of its exit until 31 December 2020.

The aim of this period was to give businesses and citizens time to prepare for the UK’s exit from these EU arrangements, which tightly connect it to other EU countries. It also allowed time for a Free Trade Deal to be negotiated. 

As the UK was originally meant to leave the EU on 29 March 2019 – three years after Article 50 was revoked – there had originally been a longer transition period for a trade deal to be negotiated. 

The UK had an option of extending the transition period by one or two years, but UK Prime Minister Boris Johnson and his government have been emphatic about not requesting that extension and prolonging the Brexit process any further.

Despite scepticism about this staunch refusal (remember he said the UK would leave on 31 October 2019, and it didn’t), the Duchy of Lancaster Michael Gove seems to have officially confirmed this – although there’s still time for a change of mind.

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Fundamental divide

Now that the extension issue can be put aside, the focus will be on getting a trade deal, which needs to be ratified by both sides, by 31 December.

This week, UK chief negotiator David Frost published a document that showed the next negotiating rounds would take place in July, August and September.

London and Brussels have reported making some progress on less divisive issues such as security cooperation and data protection rules.

But much more sensitive subjects such as fishing rights – an issue the pro-Brexit camp rallied around four years ago, and that needs to be agreed on by July – and Britain’s acceptance of EU environmental, health, safety and State Aid rules remain largely unresolved.

The bloc worries that Britain’s rejection of basic EU standards and regulations would create unfair competition, allowing UK exporters to undercut their European competitors.

Johnson’s government counters that such freedom was the whole point of Brexit, and that it is ready to walk away if Brussels does not want a basic deal removing barriers to trade.

It also says that asking for more time would not help bridge this fundamental divide, since the sides are not negotiating the finer details of tariffs on specific goods.

Johnson will get personally involved in the negotiations for the first time on Monday, when he is due to speak to EU Commission president Ursula von der Leyen.

Šefčovič, EU commissioner for Interinstitutional Relations, said Brussels was “pleading” for work to be accelerated to secure a “very close and cordial relationship” by the start of 2021.

In a last-gasp bid to extend the talks, the heads of the devolved governments in Scotland and Wales wrote a joint letter telling Johnson that setting a December 31 deadline during a pandemic was “extraordinarily reckless”.

Without an extension, “at very best there will only be a damaging ‘bare bones’ trade deal or even worse, a disastrous no-deal outcome,” they warned.

- with reporting from AFP