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By Richard Baker, Head of Strategy and Policy, North East LEP

In its role as the facilitator of the North East Brexit Group[1], and working with infrastructure and logistics organisations including the Ports of Tyne, Blyth and Sunderland, the North East Local Enterprise Partnership (LEP) has announced that it will commission work to develop a detailed proposal for a Free Zone for the North East LEP area.

It is seeking to identify a contractor who could support the Brexit Group to develop the plan which is ready for the Autumn at a time when Brexit preparations are being stepped up.

Free Zones exist in many regions of the world to facilitate frictionless trade, enabling areas to establish, develop and maintain competitive trade arrangements which can deliver new investment and create jobs. In its Maritime 2050[2] report, the Government has set out a plan to consider the creation of a network of Free Ports across the UK in consultation with logistics and manufacturing sectors. The new Prime Minister, Boris Johnson, has spoken of his support for this plan.

As the UK leaves the European Union, work to understand options to facilitate frictionless trade in the region has been a key strand of the work programme of the Brexit Group given the importance of integrated supply chains and international export markets in the region. Work has already been completed which has examined the legal frameworks and economic issues around Free Ports and Free Zones, and to consult on options with regional businesses and ports in the particular context of the North East economy.

The work identified how the outcome of the Brexit process could have a significant impact on the free flow of goods into the region if it resulted in departure from the EU Customs Union. It could mean that any single shipment arriving to or departing from the UK will require a Customs declaration, a change which will affect UK companies and HMRC alike. Businesses who were involved in the project highlighted that this would require an increase in the resources deployed and costs for both the private sector and the UK Government.

A significant number of companies in the UK trade within the European Union, and few have prior experience in managing Customs processes and procedures. In addition, many North East businesses operate integrated European supply chains, with components crossing the UK-EU border repeatedly before final export of finished goods. Departure from the Customs Union would mean that it is likely that many of the imports and exports from the EU will be subject to duty in the UK for first time in over forty years.

The previous work concluded that a digitally enabled Free Zone, which utilises both physical and digital mechanisms to insulate trade from these costs and regulatory friction which could be caused by exiting the EU customs union, could deliver a positive economic impact for the region. It would shelter existing trading relationships from additional costs and regulation created by EU Exit, and potentially create competitive advantages for the future for the region in attraction of further trade, investment and jobs.

The aim of this work is therefore to build a detailed proposal for a Free Zone in the North East which can facilitate current and future trade linkages for North East business, and provide a competitive opportunity for the region in the future by demonstrating that the North East remains open for business and investment.

Contractors interested in making a proposal for this project can find out more here. Use reference number DN425189 or the title ‘Develop a Proposition to Support Trade Facilitation through a North East Free Port and Digitally Enabled Free Trade Zones’.

 

Please note, this opportunity has a revised tender specification which is available via NEPO.

 

 

[1] Consisting of representatives from: The North East LEP, NECA, NTCA, CBI, NEECC, FSB, EEF, Entrepreneurs Forum, Universities, Colleges, TUC, VCS, MHCLG/BEIS Local Growth Unit.

[2] Maritime 2050 Navigating the Future (2019); Department for Transport

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School pupils at the Port of Blyth