So at 11pm GMT on December 31st 2020, the United Kingdom of Great Britain and Northern Ireland finally and decisively left the European Union. In the final days of 2020, negotiators for both sides moved on from months of stalemate to finally agree to a Free Trade Treaty.
Actually, the title “Free Trade Treaty” is a little misleading and this huge document covers a lot more than goods crossing borders and how to tax them. At a very basic level, the UK has agreed to maintain regulatory standards that are extraordinarily closely aligned with those of the EU as a condition of receiving free trade status. This is similar in many ways to deals done by countries like Switzerland and Norway with the EU. The agreement runs to about 600 pages but even that is misleading and these pages have references to thousands of pages of footnotes, references and definitions.
It covers everything from manufacturing and trade through to visa rights (or lack of them, sadly for many). Today, however, I want to focus on what all of this will mean in the real world for our industry i.e. the manufacture, sale and use of scientific research apparatus.
So here goes:
Tariff Free Trade
Goods sold from the UK to the EU (or vice versa) will for the most part have no duties or tariffs applied. However, while Free Trade means no tariffs, it does not mean no hassles! All goods travelling between the EU and the UK will have to clear customs which means paperwork, or its digital equivalent, and that will have both financial and time costs. UK importers such as universities and drug companies will now have to pay VAT before they can get their goods out from customs. They will have to file import documents at the port or airport of entry and we, as sellers, cannot do this for them.
There is a glimmer of hope in that the UK has agreed to some fast track digital processes with EU countries, especially Ireland. Goods travelling between the UK and Ireland can be pre-cleared, i.e. trucks can file and get clearance before crossing borders and they should in most cases be able to get clearance as they travel, so they can travel straight through the border and onwards to delivery points.
Another complication is Northern Ireland. While Northern Ireland is part of the UK, the UK has decided to leave it within Europe, for trade purposes. This means that goods can travel between Northern Ireland and the Republic of Ireland unhindered i.e. no border controls.
Professional Qualification Recognition
Sadly, the UK’s departure from the EU also means it’s departure from the EU mutual recognition of professional standards. This basically means that professional qualifications for doctors, accountants, vets, nurses, etc. obtained in the UK will no longer be automatically recognised in other EU countries. Each accrediting body, such as universities and other professional recognition associations, will now have to negotiate individual agreements with each of the 27 EU member states for each and every professional qualification they want to have recognised.
Visas, Travel and Work
UK citizens no longer have a right to visa free travel to EU states, and vice versa. The treaty does allow for 90 day visits, without a visa, but stays longer than that will require a visa. Similarly, EU residents wanting to move to the UK for work and UK residents wanting to move to EU countries will now have to obtain a work permit and a visa. In the short term this is hugely annoying for the thousands of Britons who have holiday homes in France, Spain and Portugal. In the longer term it will make it harder for scientists to move in and out of the UK. Science has always relied on movement to help encourage innovation and while countries are still likely to grant these visas, just requiring them may discourage movement and especially short term secondments of 6 months or a year.
Similarly, as an employer within the EU, if my company advertised a job and someone from the UK applies then I will now have to consider if we are willing to support a working visa application if the candidate is successful.
Erasmus and the EU Horizon Programme
Erasmus is a very important programme for university students in Europe. It allows (and indeed encourages) students to broaden their horizons by taking a semester of their course at a university in another country. The UK has lost access to this programme and so UK students cannot use it to visit any EU country for temporary study. Of course the reverse is also true i.e. EU students can no longer opt to take a semester in the UK, but this is less problematic as they still have 27 EU other countries to choose from.
The one exception to this is for Northern Ireland whose students will still be able to participate in the Erasmus program.
On a more positive note, the UK will remain in the Horizon Europe research programme. This programme provides about 12 billion Euros of funding to research projects that cross country borders and ideally also involve both academic and industry partners. It is a massive and very successful programme and the UK has agreed to continue to pay into the central fund in return for the EU allowing UK researchers and companies to have access. In practice this means that funding sources for research in the UK will remain unchanged, at least for the next seven years.
Pharmaceuticals Mutual Recognition
Thankfully, the trade deal does help the pharma industry somewhat. The main concession here is that both the EU and UK have agreed to recognise tests and inspections done in the other jurisdiction. This should mean that pharma research and development in the UK will continue as normal and (unlike banking for instance) there will be no need to move or replicate work to the other jurisdiction in order for it to be recognised. So our private sector research customers in the UK should continue as normal.
So the UK and EU have done a deal and it is definitely better than no deal. The UK has agreed to be tied into certain EU standards but has opted out of free travel. Both sides have agreed on tariff free trade (for the most part) and arrangements are in place to get goods through customs with minimal disruption. However, the responsibility will fall on the end-users to complete customs formalities and pay local VAT at the port of entry.
Let’s hope it all works as simply as the negotiators on both the EU and UK sides have promised us. Only time will tell!
January 12th, 2021
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