, 14 tweets, 3 min read Read on Twitter
Much on free ports /zones over the last couple of days. The only thing you really need to know about them is that they have absolutely nothing to do with the most pressing #Brexit challenges
These remained unchanged since well before March –NI border, customs procedures, delays, business readiness etc. Free zones/ports change very little here.
The issue of whether or not EU membership has prevented us from having free ports/tax free zones is completely irrelevant (also- it hasn’t).
As a reminder- we used to have them in the UK until recently. If you’ve never heard about this it’s probably because they didn’t make such a big difference to the UK economy after all. If they did, they’d still be around
In free zones/ ports customs duties are suspended and import/export procedures simplified. Processing, manufacturing and exporting of goods produced from imports with suspended duties is allowed in these areas, unlike under customs warehousing (these are for storage mainly)
But just like with warehousing, removing goods from a free port/zone changes nothing when it comes to import procedures – you still have to complete the same customs procedures on import. And moving goods from such zone/port to the rest of the UK would be an import.
Free zones are used a lot in the US and Middle East. They work well and can support investment in the region. The point is that free ports/ zones do not help in any way with the most pressing border issues.
In fact, they create more borders and points of entry and increase the number of formalities needed (entry into the zone + entry into the final customs territory). This is particularly relevant in the context of using free zones as part of a solution in NI
Can provide additional flexibility for businesses but only those with operations in the zone/port. Relocation issues and shifting of investment need to be considered. Not to say we shouldn't use them in the future
It's just they are not as big of an opportunity as they’re being sold as. They can be useful but the potential impact should not be exaggerated- most likely similar to any other #customs procedure: helpful for the companies that have the opportunity and know how to use it
As to whether it would make much of a difference to set them up outside EU’s rules on state aid and subsidies- not relevant at this point. Perhaps it would but like everything else there will be trade offs in terms of alignment etc
So basically, let's not get ahead of ourselves with planning free zones. They is nothing new about them. We had them, we didn't use them much and we allowed them to expire.
For more on why free ports have been in the news recently here is a good piece by @BBCChrisMorris

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