Brexit News: UK Free Ports Will Thrive, But EU Vulnerable To Smugglers, Expert Says | Politics

Rishi Sunak talks about the Freeports announcement

Mr. Sunak outlined plans for eight new free ports, at East Midlands Airport, Felixstowe and Harwich, Humber Region, Liverpool City Region, Plymouth, Solent Thames and Teeside. Additionally, the following month, during his spring budget, Mr. Sunak confirmed that employers within Freeports would benefit from NIC support.

Pieter Cleppe, a researcher at the Property Rights Alliance think tank and author of a 2020 paper on the subject, told Express.co.uk: “Brexit-free ports will be a better application of the idea of ​​free ports than Brexit-free ports. the EU, as the UK is now freed from EU competition policy which has prevented EU free ports from properly acting as low tax / low customs / low regulation havens, given that interestingly enough, the European Commission considers it a distortion of fair competition.

‘It is true that in theory the EU could challenge UK tax breaks, but the EU-UK trade agreement makes this very complex for the EU, meaning the UK is largely free from provide tax exemptions to free ports as it pleases. ‘

Cleppe added: “A major unintended effect of the EU paralyzing EU free ports with all kinds of restrictions, is that they seem to have become vulnerable to all kinds of smuggling and illicit trade purposes.”

Chancellor Rishi Sunak (Image: GETTY)

Boris Johnson and Rishi Sunak during a visit to Teesport on Teesside (Image: GETTY)

The European Parliament, among other EU institutions, has already raised concerns about the situation, Cleppe said.

He explained: “The Organization for Economic Cooperation and Development (OECD) has estimated that the establishment of a new free trade area ‘is associated with a 5.9 percent increase in the value of counterfeit exports from the host economy. ‘, but it seems to be highly dependent on how the free ports are structured.

“The UK expert group RUSI has noted that, for example, in Morocco, free zones may present lower criminal risks than other border crossings and logistics centers, as they are subject to a higher level of regulation and control.”

READ MORE: EU Warning: Crisis looming as bloc will lose £ 675bn

Rishi Sunak and Boris Johnson during their visit to Teesport (Image: GETTY)

Cleppe added: ‘The UK’s post-Brexit approach of offering tax advantages to free ports much lower than the EU allows for EU free ports, combined with restrictions on free ports acting as warehouses of art. , should ensure that problems related to EU free ports are avoided at the same time. The economic benefits that EU free ports are struggling to provide are materializing.

“The need for free ports is also a consequence of the heavy taxes, regulations and customs that burden ordinary trade.

“In an ideal scenario, we shouldn’t really need ‘free ports’, but rather general cuts in taxes, customs and regulations for the entire territory.”

DO NOT MISS
Joe Biden risks Boris Johnson’s fury over US trade deal [REPORT]
Boris braces for a HUGE economic dividend on the chaotic EU [INSIGHT]
Easter Lockout Rules – Holidays, Shops, Pubs – All Restrictions [ANALYSIS]

Liz Truss, Secretary for International Trade (Image: GETTY)

Mapped Freeports (Imagen: Express)

Speaking to the BBC in March after a visit to a French free port, former Portuguese MEP Anamaria Gomes said: “We left our visit to Le Freeport with great apprehension.

“This is a way that could easily be used to store products outside of anyone’s control, to hide them when it is most convenient, avoiding taxes.”

Also speaking to the BBC in March, German MEP Markus Ferber, coordinator of the Group of the European People’s Party in the ECON Committee of the European Parliament, said: ‘If free ports are used for their original purpose, that is to temporarily store goods in transit, there is little wrong with them.

“In fact, there are quite a few free ports in the EU. However, often those free ports are not used for that limited purpose, but rather to support illicit activities, that is, tax evasion and money laundering, so there is a need for strict regulation and effective enforcement. .

Key moments of Brexit (Image: Express)

“Otherwise, there is a serious risk of abuse.

“Therefore, some skepticism regarding free ports is often justified.”

Speaking in February, Mr Sunak predicted that free ports would “unlock potential in Britain’s ports, as well as boost and regenerate communities across the UK.

He said: “They will attract new businesses, spreading jobs, investments and opportunities in towns and cities across the country.

Markus Ferber, the German MEP, has also warned of the risk (Image: GETTY)

“This is all part of our mission as an open and outward-oriented country, championing global free trade with vibrant free ports serving the whole of the UK.”

Secretary of State for International Trade Liz Truss added: “We are taking back control of our trade policy and opening up every corner of the UK to opportunities around the world.

“Freeports will unleash the potential of our historic ports, creating jobs and regenerating communities across the UK.

“These centers will also deepen partnerships around the world as we restore our economic and political independence.”

–