Credit Management January February 2020

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TRADE TALK 2020 Vision A clearer view is emerging of future trade with the EU AUTHOR – Samantha Pileggi Samantha Pileggi THE one thing that businesses throughout the UK would have been wishing for over Christmas was clarity. Last year was dogged by uncertainty and parliamentary gridlock around Brexit, but with the Conservatives now holding a significant majority, 2020 should see a clearer path for businesses to follow. The Withdrawal Agreement Bill should be passed through Parliament in time for the UK to leave the EU on 31 January. This will enact a transition period lasting until the end of the year in which the same trading rules operate between the two parties. Prime Minister Johnson has added an amendment to the Bill preventing an extension to the transition period, which would have needed to have been agreed to in the summer this year. Trade deals typically take a lot longer than just one year to negotiate. In practice, the Government could pass further legislation before the summer to retrieve the option of an extension, though this would represent a climbdown. However, some commentators have suggested that a ‘thin deal’ could be agreed to, within the one-year timescale, with several outstanding technical issues to be negotiated beyond 2021. At this stage, our understanding is that the UK will either reach a trade deal of some sort with the EU or it will begin trading with it on World Trade Organisation (WTO) terms at the start of 2021. PREPARING FOR 2021 Throughout 2019, businesses were reluctant to prepare for different potential Brexit eventualities – particularly a ‘No Deal Brexit’. Although the Government provided grant funding for businesses to do training to gain the export skills they would need in the event of a ‘No Deal’, few did. Due to the stasis caused by the Conservatives losing their majority in 2017 and ensuing division within the party around Brexit, the business community – and the nation at large – lost faith in both the Government’s ability to pass the Withdrawal Agreement and its mandate to enable a ‘No Deal’. This has changed with Boris Johnson’s December victory. He now has the mandate and Parliamentary arithmetic to either pass a trade deal with the EU or to continue trade with the EU on WTO terms. This leaves businesses facing the two likely scenarios outlined above. At this stage we do not know what the future trade deal – if agreed to, passed and ratified – will contain. We do know, however, what trade would look like if the UK does not reach a deal. Furthermore, should a trade deal be arranged, the terms of continued trade with the EU under a deal will be better than under WTO terms. As such, if you are prepared for a ‘No Deal’ scenario, you will be more than prepared for a Deal. Businesses can therefore take steps now to prepare for trade with the EU in 2021. GETTING READY Given that we’ve known about what a ‘No Deal Brexit’ would entail for a few years now, much work has already been done to ensure that businesses have access to the training and information needed to continue their trading with the EU in this situation. The Institute of Export & International Trade (IOE&IT) will be continuing its wide range of training courses and qualifications, catering for beginners through to seasoned export professionals, throughout 2020. The UK Customs Academy, set up by the IOE&IT and KGH Customs Services at the request of HMRC in 2019, provides a range of online courses in key Customs procedures and compliance which you’ll need to know. Training is also being provided by Chambers of Commerce across the UK and the World Customs Organisation Academy online which will be of assistance. There is therefore plenty of support available and we are expecting updates in January about the grant funding that HMRC has so far been providing to aid businesses in their ‘No Deal Brexit’ preparations – funding that can be used towards all the training just described. Furthermore, you’ll be gaining key export skills that you can use to expand your business beyond the EU as well – the knowledge needed to trade under WTO rules is already required for exporting to key markets like the USA and China. We do not know for sure what Brexit will look like, but businesses can be certain that they have a year to make sure they’re prepared for one of the two likely options, with plenty of support available for doing so. Following a 2019 characterised by uncertainty, let’s make 2020 the year of preparation. Samantha Pileggi is the Director of Commercial Operations at the Institute of Export & International Trade. Advancing the credit profession / www.cicm.com / January/February 2020 / PAGE 40
WHAT’S YOUR NEW YEAR’S RESOLUTION? Our 2020 goal is to place more outstanding Credit professionals in their dream roles, and to fill even more vacancies for our exceptional clients. We understand the hard and soft skills of aCredit Controller and we pride ourselves on finding you the perfect match. If you’re aCredit professional seeking anew challenge, or acompany seeking to fill your next credit control vacancy Portfolio Credit Control can help wherever you are in the UK. These are some of the roles we recruit for within SME’s through to Global blue chip businesses and the FTSE 100: Credit Manager /Head of Credit Control Credit Controller /Team Leader / Supervisor Senior Credit Controller /Credit and Billing Manager Billings Assistant /Collections Assistant Collections Manager Sales Ledger /Accounts Receivable Credit Analyst WE ARE RATED 9OUT OF 10 LONDON | 0207 650 3199 MANCHESTER | 0161 836 9949 www.portfoliocreditcontrol.com recruitment@portfoliocreditcontrol.com
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