- The trade group argues adopting digital processes and cutting border red tape alone could boost commerce without renegotiating the post-Brexit agreement
Digital improvements could boost trade between the UK and the EU without the need to overhaul the post-Brexit agreement, the International Chamber of Commerce UK has said, amid reports that London and Brussels are preparing a so-called “reset” bill.
UK Prime Minister Keir Starmer is reportedly working on legislation to align parts of Britain’s law books with the bloc in a bid to reduce red tape and grow trade across the English Channel, ahead of this year’s formal review of the UK-EU deal.
But the ICC UK argued that ministers could increase bilateral trade without renegotiating the current Trade and Cooperation Agreement (TCA) by “focusing on digital trade, paperless borders and cutting red tape”.
“The government has rightly identified the need to reset our relationship with Europe, but businesses cannot afford to wait years for new treaties, nor need them in the short term,” said ICC UK’s secretary general, Chris Southworth.
“The ‘reset’ doesn’t require reopening the TCA, it requires opening our eyes to the digital tools already at our disposal.”
In a report published today, the trade group set out five key steps to improve UK-EU relations without overhauling the current deal.
These include making all UK-EU trade paperless, interoperable and digital by the end of the current parliamentary term, as well as fully implementing the Electronic Trade Documents Act and the Digital Assets Act, and mandating the use of electronic transactions by the government’s procurement department.
The recommendations also include accelerating the adoption of digital trade corridors with major partners such as Belgium, France and the Netherlands, and following the EU in implementing interoperable digital identities and harmonised data standards to reduce barriers to trade finance – specifically by easing compliance and know-your-customer processes.
Ministers should also focus on already existing agreements among the G7, G20 and World Trade Organization to “maximise their intended benefits”, ICC UK said.
Southworth argued the UK had “the legal framework, innovation capabilities and the technology to cut border processing times and slash costs for small- and medium-sized businesses” – many of which have quit doing business with the bloc since Brexit due to costly border red tape, several studies have shown.
ICC UK has found that the current paper-heavy model results in 70-80% of the required information being duplicative. Companies using electronic trade documents can transact in minutes rather than weeks, while digital trade could reduce operational costs by 80% and shipping costs by 20%, the trade organisation said.
It also estimates that digitalisation could increase trade across the G7 by US$9tn and reduce trade costs by an average of 84%.
“The legal frameworks are already in place, the technology exists, and our European partners are moving ahead,” Southworth added.
“These are practical, implementable steps that could be taken today. If ministers are serious about growth, competitiveness and backing British small businesses, then removing unnecessary friction from UK-EU trade is the single biggest prize.”
The Department for Business and Trade has previously said the so-called ‘UK-EU reset’ is set to improve trade relations and bring £9bn to the British economy by 2040.
A UK government spokesperson told GTR that “the UK has pioneered trade digitalisation, and we have set ambitions higher than ever through our new ‘digital trade corridors’ with Germany and France”.
Additionally, “over 70% of services trade between the UK and South Korea is now also conducted digitally thanks to our recent deal, and we have committed to cooperating on AI so we can use each other’s technology more easily and affordably,” the spokesperson said.
The ICC last year called for the creation of “digital trade superhighways” in a bid to bring the current “outdated” trade corridors into a fully digital global network, which it said would unlock US$10tn in “efficiency and growth”.
The group’s landmark digital trade roadmap launched in December 204 is also in the process of being updated in response to the UK government’s recently announced trade strategy, GTR revealed last October.
