The plane truth about Brexit for the aviation industry

15 June 2018

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Irrespective of whether you voted to leave or remain in the European Union, there’s a growing body of opinion that the aerospace industry should be treated as a special case in the Brexit negotiations.

The fluid, cross-national nature of the industry means that ongoing discussions about border checks, frictionless trade and ‘trusted trader’ schemes inevitably stall when it comes to aviation.

There is, according to the General Aviation Manufacturers Association (GAMA) and British aerospace trade group, ADS, a very real danger that aircraft could be grounded if the aviation sector is not separated from the political talks.

In a letter to Michael Barnier, the EU’s chief negotiator, the groups have warned that the UK Civil Aviation Authority (CAA) and the European Aviation Safety Authority (EASA) need to begin planning now on how to untangle regulations covering how aircraft are certified.

Failure to agree a strategy before the exit date of March 2019, means EU aviation rules would no longer apply to the UK.

With UK-made aircraft parts no longer certified under EU-airworthiness rules, the only option would be to ground any aircraft which contain them, according to the industry bodies.

Concerns have already been expressed about possible job losses in the sector when the UK quits the European Customs Union and the Single Market.

ADS, which represents the aerospace, defence, security and space industry, said recently withdrawal could cost the sectors up to £2.3bn.

Border checks would be burdensome for exporters, while rules of origin requirements and regulatory compliance checks will add more costs.

The alternative being debated by cabinet ministers for a new customs partnership is ‘untested’ and ‘onerous’, says the body.

A useful comparison is the Canada-US border, which has a similar system to the so-called Maximum Facilitation option (max fac) currently being proposed by the UK Government.

This would give UK exporters all the benefits currently enjoyed by the EU’s existing trading partners but with more lenient border checks which would be further simplified or waived entirely for firms given ‘trusted trader’ status.

The agreement now in place between the US and Canada took 10 years to develop – the UK and the EU have less than three – and it cost billions of dollars to implement by respective governments as well as by Canadian and US companies.

Even after a decade of improvements to the system, only 100 of the most trusted Canadian companies are permitted to use the ‘fast track’ system.

In those circumstances, the chances of arriving at a deal which ensures a smooth transition to a new operational structure look optimistic at best. Aviation is one of the most complicated industries to regulate across borders and the more borders that exist, the more complicated it becomes. We hope the Government and the EU recognise this reality before it’s too late.

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