As part of the process towards Brexit, UKLF has been in communication with the Department of Business, Energy and Industrial Strategy (BEIS) on the development of rules of origin for export and imports, after Brexit. The Pan Euro-Mediterranean Convention on Rules of Origin are rather esoteric but highly important, in that they determine the origin of product and hence, the tariffs to be applied to exports of that product.
If the UK leaves the Single Market, the UK will have to negotiate new Rules of Origin (RoO) with the EU. From our initial discussions, BEIS have concluded that leather will be heavily affected by revisions to RoO after Brexit. The calculated tariff wedge would be in excess of 2% of the value of exports by the UK leather sector, potentially putting significant pressure on margins.
BEIS has sought to establish panels, with representation from across the sector to provide industry input into the Government’s understanding and negotiations. The first of these panels met in October, with representatives from across the leather supply chain and from BEIS, DEFRA and DExEU. This first meeting served as an introduction to Rules of Origin and to establish how BEIS hopes to interact with industry. BEIS intend to use the panels as a forum for engagement between government and industry, where businesses can both provide information for the development of a future economic partnership, and future trade agreements, and be kept apprised of developments regarding rules of origin.
It is important that the view of the UK leather manufacturers, and all those in the leather supply chain, is understood by BEIS. If you would like to be involved in the sector panel for the leather sector, please contact Kerry Senior at UK Leather Federation.