UK Unveils Huge Post-Brexit Freeport Plan
The UK Government will create up to ten freeports to boost trade and manufacturing after the country’s departure from the EU on October 31, according to plans quoted in Reuters. The freeports, also known as free trade zones, are also expected to cut costs and bureaucracy and will allow firms to import and re-export goods outside of normal tax and customs regulation.
British ports will be able to bid for Freeport status and the government has created a new Freeports Advisory Panel to assist the process.
The Port of Milford Haven in Wales, the Port of Tyne and Teesport in the northeast of England and London Gateway are among those who have already expressed their interest in joining the free trade zone initiative, the government announced.
Prime Minister Boris Johnson, who took office in July, first promoted the idea of freeports during his Tory leadership campaign, suggesting that the government should create “about six” free trade zones around the country.
Exclusive Paper: Free Ports in Post-Brexit Britain
He believes that the free trade zones will create jobs in so-called “left-behind areas”.
Rishi Sunak, Chief Secretary to the Treasury, said in a statement, “We are exploring freeports as an innovative way to drive growth and support thousands of high-skilled jobs across the UK.”
“We will focus on those areas that could benefit the most, as we look to boost investment and opportunity for communities across the country,” he added.
A recent study by Mace, a consultancy and construction company, reported that creating seven freeports in the north of England could potentially add USD$10.8 billion per year to the country’s GDP as well as creating over 150,000 jobs.
However, this figure was questioned by the UK Trade Policy Observatory, run by the University of Sussex and Chatham House think-tank, claiming that much of the initiative would just involve redistributing business from other parts of the country.
The country had seven freeports at various points between 1984 and 2012. These zones included the Port of Sheerness, Liverpool and Southampton.
International Trade Secretary Liz Truss said that, “Freedoms transformed London’s Docklands in the 1980s, and free ports will do the same for towns and cities across the UK.”
A 2013 US Congressional report estimated that there were about 3,500 freeports worldwide spread across 135 countries, mostly located in the Far East. Currently, there are about 80 freeports across the EU Member States, mostly in countries that joined the Union after 2004.
While these zones are allowed under EU regulation, the block does not encourage them, arguing that that they creates unfair competition between companies.
Supporters of the initiative argue that the benefits would be greater after Brexit as the UK will be allowed to diverge from other EU rules on subsidies.
