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Whitehall pins “frictionless” post-Brexit customs hopes on digital tech

Neil Merrett Published 02 February 2017

Broad outline of UK's objectives for life outside the EU seeks cooperation in areas such as data protection; digital technologies viewed as playing a vital role in customs reform

Ensuring the most "frictionless" relationship possible with the EU is among the recurring themes of a government white paper outlining a broad strategy to exit membership of the bloc that includes some early thinking on the need for digital technologies and compatible data standards.

In setting out plans for the UK's new relationship with the EU once it renounces its membership - a process that will take at least two years - the government's intention is to leave the bloc entirely, while seeking to ensure that obligations in areas such as data protection and tech standards are not too adversely affected.

"It is about finding the best way for the benefit of the common systems and frameworks, that currently enable UK and EU businesses to trade with and operate in each others' markets, to continue when we leave the EU through a new comprehensive, bold and ambitious free trade agreement," noted the White Paper.

The wider technology industry and some experts however are critical of a lack of detail on key issues in the paper, notably around the feasibility of its proposals with regard to ensuring service continuity and collaboration.

In cases such as commencing negotiations for a new customs arrangement with EU members, the government has committed to ensuring UK systems and processes are effective as possible to oversee and manage changes, with work already underway to implement new technology.

"We have an open mind on how we implement new customs arrangements with the EU and we will work with businesses and infrastructure providers to ensure those processes are as frictionless as possible, including through the use of digital technologies," said the document.

In areas such as data protection, the UK will be adopting the incoming General Data Protection Regulation (GDPR) with all other EU member states from mid-2018, before seeking to maintain the stability of information transfers once it has left.

Whether this commitment can be realised through maintaining standards and commitments directly in line with the GDPR as it evolves is yet to be decided.

Among the white paper's conclusions, the government said it remains committed to the overall success of the EU, seeking to collaborate with partners on science, research and technology initiatives, "while restoring our own parliamentary democracy, national self-determination."

"Whilst parliament has remained sovereign throughout our membership of the EU, it has not always felt like that," the document notes.

A single mention is also made about the EU's Digital Single Market initiative designed to ensure a consistent regulatory environment that can quickly adapt to the changing needs of the digital economy, however this does not clarify how the UK may look to follow or play a role in these regulations.

"This government will make no attempt to remain in the EU by the backdoor, nor will we hold a second referendum on membership. Instead, the strategic partnership which we seek will underpin free trade between the UK and EU, recognising the deep integration and harmonisation that we have achieved as members of the EU, as well as the closest possible cooperation on key issues like security, foreign policy and science and technology - as we have set out in this White Paper," said the document.

From the perspective of trade, the government said it will seek the most "frictionless" trade, travel and customs relationships that may be possible with the EU, including the Irish border.

Industry association TechUK said the white paper had provided some welcome signs on the government being open to dialogue with the EU relating to ensuring stability with regard to regulation.

Charlotte Holloway, the organisation's policy director, said the paper couldn't answer key questions and vital issues that will be dependent on negotiations ahead.

"This paper recognised that the stability of data transfers between the UK and the EU is important for many sectors. Indeed, data passporting is fundamentally pivotal to the future of the UK services economy - three quarters of the UK's data flows are with EU countries," she said with regard to data protection.

"We repeat our call to the government to make achieving an adequacy agreement with the EU a top priority in forthcoming negotiations."

Holloway also welcomed the government's broad commitment to harness digital technologies in ensuring a "frictionless customs process". Ongoing work to implement a new customs declaration system commenced before the EU referendum, but will now have to factor in the UK's new status.

Concerns however were raised on a need for clarity in hiring skilled workers and talent from across the EU to help meet needs of the technology sector to ensuring a thriving digital economy.

Any further certainty is now expected to be provided once the prime minister has already triggered the Article 50 process that formally commences the UK's two year exit process from the EU.

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