Post-Brexit trade policy will introduce UK freeports
8 Aug 2019
The government is looking at setting up a string of freeports around the UK providing duty-free trade zones with tax and customs duty advantages
8 Aug 2019
Freeports are typically located within a single country’s legal jurisdiction, but outside its customs borders.
Businesses within the zone would be able to import, warehouse and re-export products duty-free. This cuts down costs for businesses, and they can also defer paying tax on their products while they are stored on site, which can help with cashflow.
Typically, governments offer incentives to help freeports develop, such as tax breaks to companies that relocate there.
According to the Centre for Policy Studies (CPS), there are roughly 3,500 free trade zones worldwide employing 66m people. In the US, which pioneered the concept, there are 250 zones handling $750bn (£616bn) in merchandise every year.
The think tank estimates a UK freeport regime could create more 86,000 jobs for the British economy, largely in industrial areas outside London, if they were as successful as those in the US.
Details of the location and regulatory regime for the proposed freeports have not yet been released but the government says existing ports and airports will be able to bid to become hubs for business and enterprise for both manufacturing and services trade after 31 October, the date the UK is set to leave the EU.
So far, Teesport, the Port of Tyne, Milford Haven and London Gateway have expressed an interest in gaining freeport status, according to preliminary government research.
Liz Truss, international trade secretary, said: ‘Freedoms transformed London’s docklands in the 1980s, and freeports will do the same for towns and cities across the UK. They will onshore enterprise and manufacturing as the gateway to our future prosperity, creating thousands of jobs.
‘We will have a truly independent trade policy after we leave the EU on October 31. I look forward to working with the freeports advisory panel to create the world’s most advanced freeport model and launch the new ports as soon as possible.’
The newly announced freeport advisory panel will assist with the process of determining how locations will bid to become freeports, and will include ministers from the Department for International Trade and the Treasury.
Members include Tim Morris, CEO of UK Major Ports Group; Richard Ballantyne, CEO of British Ports Association; Dr Meredith Crowley, trade economist, University of Cambridge; Henry Overman, professor of economic geography, London School of Economics; Dan Korski, CBE, founder, Public; Dr Eamonn Butler, director, Adam Smith Institute, Tom Clougherty, CPS head of tax; ,Emma Jones, Enterprise Nation founder; and Ben Houchen, Tees Valley mayor.
Pat Sweet | 08-09-2019