At the start of the year, Pascal Perrochon, International Affairs Manager of France Chimie, Lamia Djilali, deputy head of international affairs and customs policy at France Chimie and Marie Zimmer, REACH manager / product management in France, come back in detail on Brexit and its consequences for our sector. On the program: a return to the challenges of Brexit for chemical SMEs, a decryption of the post-Brexit agreement and finally a focus on France Chimie information and support campaigns for its members.
What are the challenges of Brexit for chemicals SMEs?
Historically, chemical SMEs favor intra-Community exports for a number of obvious reasons:
- Geographical proximity
- The advantages offered by the single European market, without customs duties or customs procedures, apart from the declaration of trade in goods (DEB)
Until the start of the 2021 school year and the implementation of Brexit, the United Kingdom constituted a major part of these exports with 4.2 billion exports in 2018, i.e. the 3rde country of destination of our products.
Given the close links between French chemicals and British industrial sectors, in particular the automobile and aeronautics sectors, the challenges for SMEs in the sector are therefore multiple:
- Maintain current business flows despite new constraints.
- To conquer new market share in the United Kingdom, although it will not be more advantageous from now on to be French or European, the United Kingdom having signed trade agreements with many other partners in the world who are becoming direct competitors.
Finally, it is important to underline that Brexit leads de facto to a double regulation on the products, the United Kingdom having developed a regulatory system distinct and identical to the European system (REACH, CLP…). To access the British market, companies will therefore have to fulfill obligations comparable to those required on the European market, thus duplicating the costs: these provisions will be particularly penalizing for SMEs!
What does the post-Brexit agreement found at the end of 2020 change?
The main changes in force from 1is January 2021 are linked to customs clearance of goods.
While the agreement makes it possible to avoid the application of customs duties and quotas, it is now necessary to establish export declarations, the UK being now a third country for the EU.
For small and medium-sized businesses that have until now only done intra-community trade, this is a radical change and it is necessary to directly manage customs issues internally when possible, or through a customs broker.
In both cases, this should be done in conjunction with your carrier: it is indeed essential to know manage rules of origin.
Indeed, if we cannot prove that the product is indeed European in order to penetrate the British market, then we cannot benefit from the preferences of the agreement. The authorities have put in place a “smart border” which requires giving the right information to its transporter for a smooth passage.
Finally, the regulatory cooperation component of UK REACH has not yet been applied (scheduled for March 31) but this remains a very important dimension for our sector.
How do you support members to approach this start of the year with confidence?
France Chimie has put in place regular and detailed communication since the vote in favor of Brexit in 2016, in particular at the time of negotiations for the withdrawal agreement, by distributing notes to prepare for a “No deal” for example, or by organizing thematic webinars on customs issues by the economic department or on product regulations by the technical department of France Chimie. The latest webinar, for example, focused on new product regulations in the UK.
In addition, we are in direct contact with the national authorities, in particular the Customs. We can therefore report any problem encountered by an SME in its exchanges with the United Kingdom, for which the public authorities should be solicited.
Finally, we strive to respond directly to all individual business questions, even if our vocation is above all to initiate collective actions on behalf of the sector. The link with the regional and sectoral network of France Chimie is also major in informing and promoting our positions concerning these new relations with the United Kingdom.
A webinar on the impact of Brexit on SMEs is scheduled for February 18 at 10 a.m.
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