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Here’s my letter to Liz Truss exposing the catastrophic negotiating blunder that risks leaving manufacturers in the UK’s new generation of freeports shut out of £35bn in export markets, as reported by the FT, the Indie and others today. A short thread to explain (1/6).
When DIT Ministers were negotiating rollover deals to maintain our free trade after Brexit, they failed to remove ‘prohibition clauses’ from 23 of those deals, which stop manufacturers who don’t pay duty on their imports from getting lower tariffs on their exports (2/6).
One of the key advantages for manufacturers based in the new freeports is that they can import components and materials duty free, transform them into finished goods, and then export them around the world. A prohibition clause inevitably scuppers that advantage (3/6).
In the small print of their November ‘freeports bidding prospectus’, the Treasury identified this problem and warned potential bidders they might not qualify for tariff reductions on exports to a number of countries with whom the UK had signed rollover deals since 2019 (4/6).
Inexplicably, despite that warning, Liz Truss went on to sign TEN more agreements containing the same prohibition clauses, including with Canada, Singapore, Norway, and Mexico, meaning UK manufacturers based in freeports can’t benefit from those trade agreements (5/6).
I asked Liz Truss recently what she was doing to promote freeports, and I got the response that it was a ‘domestic policy’, not something she was focused on. She’s going to have to start, because this blunder needs to be rectified urgently, before the freeports start work (6/6).
