Brexit is going to cause chaos, and there is genuine reason to be concerned about shortages of food drugs and everything else , due to the delays at the border and customs inspections.
But it wasn’t long ago that the European Union did not exist.
Today, I assume that the same truck drivers (well, all those who are over age 45 ) are driving the same routes they did before the EU.
Back in , say, 1990 a typical day’s work could involve driving across 4 countries, crossing borders using 4 different currencies. There was no internet, computers were rare, and I assume that much of the customs and administration was done by writing documents by hand.
And there was no chaos.
Why is it so impossible to go back to the “good old days”?
Obviously, today’s world is very different; businesses work with just-in-time delivery cycles, etc.So making changes will disrupt things for a while,till buyers and sellers learn to coordinate their schedules. This will definitely create some chaos when Brexit begins.
But from what I’ve seen, the fear-mongers are claiming that the chaos is permanent , and unsolvable.
They claim that there simply isn’t enough room to park the trucks, unload the ships, etc…and *there is no way to fix this. *
Yet those same trucks and ships supplied Britain pretty efficiently back then.
What has changed?
(or what am I not understanding?)
You have to go back a bit further than the 1990s. The UK joined the EEC in 1973.
Back in those days, before containerisation and the ‘logistics revolution’ got going, there were regular problems at the docks. Dockers were second only to miners for going on strike and halting the flow of essential goods, and stuff used to go missing. Moving stuff between countries was a significant cost to business.
Moreover, manufacturing techniques have developed somewhat over the decades. Something called integrated supply chains and ‘just in time’ delivery. These improved the efficiency of manufacturing no end and it depends on the smooth processes that come with the EU customs union. Big businesses like car manufacture require parts made in many countries to cross borders several times before the are eventually assembled into a vehicle at a plant. Any delays means they have to stockpile parts at key locations. All that adds costs to making things in the UK and this will influence investment decisions in the future.
One other innovation has happened that has made Dover-Calais a very popular route for UK-EU trade. In 1994 the Channel Tunnel opened. Trucks drive onto a shuttle train at Dover and 35 minutes later they drive off onto the roads of France. Very quick and easy and so most of the truck carried goods, especially perishable foods go through this route. It is a very busy port and it handles a large portion of the traffic between the UK and the Continent.
Once we are outside the EU, the UK is outside the legal and regulatory framework of the EU. Any new arrangement would be dependent on negotiating a trade deal with the EU. That bit has not even started. So the UK will be treat as any other country from outside the EU, with which there is no deal. That involves customs inspections, conformity regulations and tariffs to be applied. Inspections mean delays and trucks will have to wait in line on both sides of the Channel. However, once an UK-EU trade deal is negotiated and the all the IT systems for the new customs procedures are developed then I am sure it will all go very smoothly. The track record for the delivery of large government IT projects is not impressive.
Estimates for how long a trade deal will take vary. But the EU Canada deal took 7 years and that did not cover services. Some take much longer. Trade deals are complicated and take years. The UK has zero experience at negotiating trade deals because for decades now the EU has done this for us. The UK has been relying on the trade the EU has negotiated with other nations and trading blocs around the world. So as well as negotiating an UK-EU deal there would also have to be many separate deals between the UK and the rest of the world.
So how long for a UK-EU deal? Some say 10 years. No matter how keen the UK is, it depends on other countries and, in the case of the EU, 27 of them ratifying any trade agreement.
Brexit is abandoning 45 years of UK investment in the development of a European single market. It is will take a while to replace that. It is a lot more than just a bit of form filling at the border.
OP: You need to distinguish between the short term and the long term.
In the short term there will be chaos because there will not be the capacity to handle the amount of traffic currently going through. A great deal of this is due to the lack of customs inspections stations and customs inspectors. If the system can only handle 1,000 trucks in a certain length of time and 4,000 trucks want to go through delays will stretch and stretch. Governments will take months (maybe a year or two) to deal with these types of problems (for example lots of areas are already built up and and you have to go through lengthy eminent domain and other legal procedures before you can even buy the land needed for new facilities).
In the long term the capacity problems will be fixed and you will have the same types of problems to you have elsewhere in the world crossing borders (checking documents, inspections, tariffs…)
According to the first graph on this page, global trade increased five-fold (in constant dollars) between 1975 and 2010, or two-fold from 1996 to 2010. I assume free trade agreements contributed to this growth. That page has several interesting graphs, including an intra-Western Europe graph, and a fascinating motion picture showing container ships moving around the globe. (But it has few, if any, graphs specific to the U.K.)
Yes that’s the simple and obvious summary. And just to add as is implied, the amount of trade has increased enormously since pre EU (not to mention since previous iterations of post war European trade agreements). It’s like the idea of now imposing tight trade restrictions on US/Canada automobile trade. Even prior to NAFTA, the two countries had set up a largely ‘borderless’ trade in cars and parts. To which the market naturally adapted with much more two way trade flow in cars and parts than previously. Of course it would cause a mess to suddenly step back to the previous situation. Though that doesn’t mean the previous situation was unworkable or switching back to it would never again be workable. It would be workable, at a lower overall economic efficiency, after enduring quite a mess in that industry for awhile.
The problem is less a comment on the pre-EEC border regime in the UK, but that in the event of no-deal, all of Britain’s trade deals are nullified overnight. Rather than the 700-odd deals we currently enjoy, not including frictionless trade in the Single Market, we’ll have zero. WTO rules are the base (assuming we’re in it), and contrary to the delusions of the Rees-Moggs of this world, they suck. There’s a series of default customs rates for products that are instantly applied to products entering your country and your products entering other countries that can only be altered through formal trade arrangements, which take years. Plus, within the EU, the UK has enjoyed forty years of light infrastructure to do with customs and trade issues. We do not have the infrastructure now to go back to managing it ourselves.
Sure, long-term, that will be ironed out, but it’ll be years. Years to simply get back to something still inferior to EU membership.
We have had warnings of this. Those who wish to reverse the referendum are hyping it for all they’re worth. It might be scaremongering; it might not. There is no evidence one way or the other. Whether or not it actually happens remains to be seen.
Seriously, Quartz, are you just going to keep sticking your head in the sand? Do you just automatically tune out unwelcome facts and assume it’s a conspiracy of Remainers? What makes you different from a climate change denier?
Rod Mackenzie of the Road Haulage Association was on the news before Christmas warning that there aren’t enough haulage permits to go around - just 2,000 for 40,000 trucks, and will throttle so many supply lines huge numbers of SMEs will simply go out of business. Just one firm will have 7 million customs declarations in a week. We’re in deep trouble.
Meanwhile, Kent County Council, not really known as a hive of Remoany traitors, issued a report on Operation Fennel, to hold 10,000 HGVs ‘on a routine basis’ to mitigate supply lines for 3-6 months in the event of No Deal. They’re warning of a complete choking of the M25, the M20, and the M26 at minimum, and possibly storing lorries in neighbouring counties if they get desperate. The report warns of disruption to schools, food supplies, hospitals, danger to vulnerable people dependent on public services, an increase in the number of migrants, and a suspension of Kent’s bulk waste treatment system (it’s done in the EU).
Perhaps the Government could recruit volunteer traffic stewards from among the ostriches screaming ‘Project Fear!’ at every bit of inconvenient evidence that is produced about this utter abortion of a policy.
But I doubt you’ll bother, you’ll likely just skulk off like every other time you’re presented with evidence.
Prior to 1975, transportation was more expensive than it is now, with containerization, computer scheduling, etc. And the cost of mass production in large centralized factories has continued to decline. Thus there was a lot less importing of goods back then.
So the net result is that previously, many goods needed in the UK were produced in factories within the UK, so no border crossing, inspections, import-export regulations, etc. But now, many of those goods are produced in centralized facilities somewhere in the EU, often outside the UK. No problem while the UK is part of the EU. But not so after Brexit.
Quartz, there certainly is evidence of the effect of a hard border. Just go to the Windsor-Detroit border crossing between Canada and the US, or the Peace Bridge at Buffalo. Those are choke points similar to the Chunnel, where all the road traffic has to cross at the same point.
And there can be signifiant delays, because both the US and the Canadian Customs officials have a mandate to inspect traffic crossing the border. They may not thoroughly check every truck, but they can always check some.
And that causes delays. To the point that the Government of Canada runs a web-service to alert to significant delays.
And note that when it says “no delays” that doesn’t mean you can just drive across. It means “no delays within our anticipated times for stopping, questioning, and searching”.
It’s definitely a “hard” border, even though Canada and the US are at peace and have a free-trade deal in place (for now, at least).
So, that’s clear evidence of how a hard border can work. You can’t just wave that sort of evidence away and say “Shan’t!”
And, those border crossing arrangements have been worked out over decades to make them as efficient as possible. Britain will be starting from scratch on March 29, if there’s a hard Brexit.
This question has been well answered, but I can affirm that the US-Canada border near Buffalo is a nightmare–this is between two countries with a long peaceful history and decades of trade and transit agreements.
What do you think will happen when Britain suddenly has NO such deals with any of its near neighbors, including Ireland?
And there’s an invisible aspect to all of it, which is all of the trade and movement that doesn’t occur because of all the onerous rules and duties. That would be much more visible if we’d been in a customs union with Canada for decades, and then suddenly that ended.
Observing from far away, I have no reason to expect shortages of drugs. Drug supply is already disjointed, requiring local storage to manage supply irregularities. Having stuff take an extra week or month at the border is no different from having stuff take an extra week or year in the supply chain for some other reason.
I’ve had a friend of mine be informed that his wife will be unable to 9 of the 11 drugs she uses, including thyroid medication. The GP has been instructed not to prescribe them.
Pharma companies aren’t like Haribo- they don’t turn their production line to the latest coloured sweet - it takes approx £1-4Bn to bring a drug to market and takes approx 12 years, so they specialise in niche therapeutic areas. So for example AZ focuses on
1). Cardiovascular and Metabolic Diseases.
2). Oncology.
3). Respiratory, Inflammation and Autoimmunity.
4). Neuroscience, Infection and Specific types of Vaccines.
Point to note - none of that covers insulin. Hence, insulin is the big story at present because insulin supplies are now threatened as they are imported.
You need a licence to sell a drug its known as Marketing Authorisation (MA). You can’t chop and change your drug supplier like you can your utility bill as every new drug brought to market needs an MA. Its takes up to 210 days to get an MA ( that number is misleading because the “clock can be stopped” during that period if extra things need to be sorted or tested). Plus another 2 months to grant the licence. So approximately a year. So even if we had the forethought to look for new supplies of insulin it would still have taken them a long time to get on to the UK market. We didn’t and so now there isn’t enough time to look for new suppliers.
there is ample private sector evidence that it is not hyping as the companies with direct economic interest are observed by indirect statistics - the inventory delivery reports and other statistics not at all generated for the purposes of “elites” as some past pretensions or sneering EU commissars patting on the head. showsa record capital deployment to stockpiling in inventories, which is of course an immediate deadweight loss. There are in fact already the evidence in the economic statistics of anticipatory impacts for the logistics.
From the personal since I am involved in the investment monitorying I can see the UK connected companies covered, now that they are taking the Hard Brexit seriously in a serious frenzy about the logistics problem, which is extremely serious as anyone genuinely and seriously involved in the logistics of the goods trade knows.
The hard reality of the physical logistics requirements for the hard exit are not mere assumptions, they are a reality.
But it seems clear that the Brexiters had a conception of the world similar to the OP, without understanding (as the Brexit secretary himself confirmed in saying himself - directly! - he "did not quite understand the importance"of the Calais-Dover transit).
A claim there is no evidence requires simply ignoring the emerging evidence or simply not understanding it at all (or being in a complete denial).
Of course.
since 2016 his precious pretension has been the “questioning.”
it is necessary to note that with the scenario of the No Deal Brexit and suddenly having the goods trade under only the WTO rules, the EU by these very rules needs to apply the same standards and checks to the goods from the UK as from say the China. If they do not, then the other countries under the WTO only can bring the action against the EU.
the Chinese and… essentially everyone else is unlikely to say *“oh good show UK, no worries at all our good mates, we’ll let you benefit and not at all seek the same benefit…” *
Thus no matter the EU feelings, anything done by the EU sans the negotiated accord has to take into the careful consideration the wider implications. Something that seems to never occur to the UK hard Brexiters who engage in the completely magical thinking.
While the UK Brexiters have been whining about how mean the EU is, it was them - the UK Brexiters who were celebrating the concept when they promoted the Exit.
It was either non comprehending idiocy, complete fantasizing or dishonesty or a terrible combination of all three.