Friday 20th Oct 2017 - Logistics & Supply Chain

Supply chain professionals must be heard in Brexit talks – update

Sir Tim Barrow, the UK’s permanent representative at the European Union, has handed over a letter to European council president Donald Tusk invoking Article 50 of the Lisbon Treaty and starting negotiations for the UK to leave the union.

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

It means that after some nine months of speculation, work will start in earnest on the process of redefining the UK’s relationship with the rest of Europe.

In her letter, prime minister Teresa May said the UK government would publish a white paper on 30th March outlining its plans to convert the body of existing European Union law into UK law. (Read the full letter here).

An extraordinary European Council will be convened by Donald Tusk on 29th April to adopt a set of guidelines on the withdrawal of the United Kingdom from the European Union. These guidelines will define the overall principles that the EU will pursue during the negotiations.

Organisations such as the Confederation of British Industry and the Freight Transport Association have emphasised the importance of access to the single market and minimising red tape in moving goods between the UK and the rest of Europe.

The risk is that negotiators will not adequately take into account the complexity of supply chain relationships between companies in Europe.

The government certainly knows about this – its own white paper on Brexit includes an analysis of the UK share of foreign content in EU exports. For France, Germany and Spain the figure is around six per cent. Clearly, there is a risk that multiple supply chain links could be damaged or even broken by sudden imposition of trade barriers between the EU and UK.
And the danger has been highlighted by Professor Alan McKinnon.

In an article entitled “Supply Chain Naivety in Brexitland”, he points out that many of these links are “time compressed” and re-imposition of customs barriers would make such arrangements impractical.

Already, it seems that the UK government’s negotiating position is changing. Reports from Brussels this morning suggest that the UK is backing away from the threat to leave with no deal.

Nevertheless, supply chain professionals can play a key role in ensuring that negotiators on both sides the table understand degree of interdependency that exist in supply chain ecosystems. They must make their voices heard as the Brexit negotiations progress.

 

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