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U.K. Ponders Post-Brexit Free Trade Zones
Britain’s newly elected government is studying a scheme that would create as many as 10 free ports to avoid tariffs after the U.K. exits the European Union.
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Britain’s newly elected government is studying a scheme that would create as many as 10 free ports to avoid tariffs after the U.K. exits the European Union, BBC News reports.
Free ports, also called free trade zones, are allowed under EU rules. The U.K. operated seven of them between 1984 and 2012, when their enabling legislation lapsed.
The free ports designate an area where companies are allowed to make products out of imported components, then export those goods—all without paying the same level of taxes charged to manufacturers elsewhere in the country.
But the EU doesn’t encourage the zones. The bloc argues that they provide an unfair competitive advantage over companies that adhere to normal EU trade practices.
Backers predict such zones will generate thousands of new jobs, BBC says. Skeptics claim the scheme would merely relocate existing jobs. They also warn that, because zones avoid customs inspections, they could foster parts counterfeiting and money laundering operations.
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