UK freeports blow as exporters face tariffs to 23 countries

UK freeports blow as exporters face tariffs to 23 countries

Companies in freeportswill not get to enjoy the full benefits of the new tax-efficient zones if they are exporting to certain countries including Canada, Norway, Switzerland and Singapore, the government has admitted.

Prime ministerBoris Johnson and chancellor Rishi Sunak have declared that eight new English freeports — announced in the Budget — will be a “transformational” benefit from Brexit.

But officials disclosed on Sunday that recent post-Brexit trade agreements with 23 different countries include clauses which specifically prohibit manufacturers in freeport-type zones from benefiting from the deals.

Emily Thornberry, shadow trade secretary, said the clauses could easily have been removed during the trade discussions. “On the surface of it, this looks like a catastrophic blunder by a minister stuck in her silo,” she said.

“As a result, I fear that manufacturers in towns, cities and regions across our country who have succeeded in bidding for freeport status risk missing out on access to key markets.”

Typically, freeports are set up to allow companies to receive components and ingredients from abroad without paying any duties — including tariffs, VAT or excise duties — through a process known as “duty drawback”.

But businesses in freeports which enjoy those advantages will be obliged to pay tariffs when exporting their