After the hardships and worries of 2020, the impending decisions surrounding Brexit have made the process a long, agonising wait for businesses across the steel industry.
Although government restrictions and necessary measures have continued to stay in place, the determination of the steel industry as a whole has allowed us to think positively about growth for the future.
Of course, to see this growth, it’s vital to understand how doing business in the sector has changed.
From exports, imports, tariffs and everything in between, the new Trade and Cooperation Agreement between the UK and EU have introduced new rules and regulations within the industry.
The UK is no longer part of the Single Market, and new rules via the Customs Union are now in place.
In general, as the market stands, the UK currently produces around 7.3 million tonnes of steel per year, employing around 32,000 people and contributing £2.8 billion to UK GDP.
With a further £2.8 billion contributed to the UK’s balance of trade, of course, leaving the EU was going to require months of tough negotiations.
Recent guidance has revealed that steel manufacturers will not be expected to pay the 25% tariff that was initially a significant cause of concern for the industry.
Instead, the European Commission has set out a proposed Tariff Rate Quota for UK steel exports to the EU, which came into effect on 1st January 2021.
This quota means that any goods exported to the EU are eligible for ‘zero tariffs’ if the products meet the ‘Rules of Origin’, along with the relevant documentation.
The ‘Rules of Origin’ are part of free trade agreements, or ‘FTAs’, and determine the “economic nationality of a good”.
The rules are set out to ensure only goods produced in the UK or EU can benefit from these zero tariffs.
Without these rules in place, the UK would have expected to face an £80 million charge from EU Steel Safeguard tariffs as we enter the Brexit transition period.
Any steel manufacturer looking to trade outside of the UK must ensure that its products meet the rules and requirements set out in these regulations.
Businesses can classify their goods by reviewing the specific rules associated with their products using the government’s online system code checker.
Traders will then need to prove the origin of the goods by self-declaring them with a ‘statement on origin’. This document will highlight that the products being traded to the EU meet the necessary rules and regulations.
Although the UK is in a great position by having tariff-free access to EU markets, steel traders must be clued up on the new rules set in place to ensure operations run smoothly.
To support businesses as we move through this transition period, chancellor, Michael Gove, has also announced on 11th February that an additional support package will be introduced for SMEs.
The ‘SME Brexit Support Fund’ is said to be offering £20 million of financial support to businesses as they adjust to these new rules concerning customs, VAT and rules of origin.
Alongside this, the government has also introduced a new three-stage process running up to July 2021, giving UK businesses, who are looking to trade with the EU, the chance to adjust to these new import controls.
These new controls will commence in April, and are part of the more comprehensive ‘Border Operating Model’.
The government has set out this new model to highlight how the border with the EU will work once the transition period is over.
To ensure your business is ready and prepared for the ‘new normal’ in the steel trading sector, companies can also utilise the Prof.IT software package from PCI Systems.
Designed for metal stockholders and processors, the software has been developed to allow businesses to gain more control over order processing, stock control enquiries and reporting.
Being reliable, user-friendly and created with the metal industry in mind, the Prof.IT software package is a great tool to minimise day-to-day problems within the industry.
With a Brexit-ready software in place, you can ensure you’re prepared for the changes coming into force throughout the transition period.
For more information about the Prof.IT software, a member of the PCI team would be more than happy to run through the system’s many benefits with you in more detail.