A Week Into Brexit, the Pain for U.K. Businesses Has Arrived – The New York Times

“The things which are proving problematic are the things that we expected to be problematic,” Ms. Jones said. “So for goods, it’s all about the speed and accuracy with which people are preparing the right paperwork.”

Many U.K. businesses — at least 150,000, according to data from Britain’s tax agency — have never traded beyond the European Union, and so have no experience dealing with the customs systems.

The situation in Northern Ireland is an added wrinkle. Northern Ireland will remain partially in the European Union’s single market, an exception that avoids a border with the Republic of Ireland but creates a border in the Irish Sea. Logistics experts say the Trader Support Service, a free government service to help companies complete customs forms to send goods from England, Wales and Scotland to Northern Ireland, has been overwhelmed.

Some businesses anticipated cross-border problems with Europe, and filled warehouses with stockpiled goods — auto parts and pharmaceuticals, for example — before the end of the Brexit transition period. That has kept cross-border shipments at a fraction of their normal level so far. Over the next few weeks, as those stockpiles run down, business activity will pick up, exacerbating delays.

Another new problem faced by large retailers with international locations: “Rules-of-origin requirements,” which determine whether a product leaving Britain is “British enough” to qualify for tariff-free trade with the European Union. International retailers who use sites in Britain as distribution centers are now finding that they can’t automatically re-export their products to their stores in the European Union without facing tariffs — even if the product came from the bloc.

For example, a company could not import jeans from Bangladesh or cheese from France into a hub in England and then send it on to a store in Ireland without facing export tariffs. The British Retail Consortium said at least 50 of its members face such tariffs. Debenhams, a large but now bankrupt chain of department stores, shut down its Irish website because of confusion over trade rules.

As companies scramble to catch up to the rule changes, the question is: What does Britain do with the sovereignty and freedom it has secured from leaving the European Union? The government has to decide how much it wants to diverge from Europe’s rules, where it might want to deregulate, and if it wants to pay the price for that.

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A Week Into Brexit, the Pain for U.K. Businesses Has Arrived – The New York Times

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