They hit free ports in the UK because exporters have tariffs for 23 countries

Companies freeports the government has admitted that it will not enjoy all the advantages of the new tax efficiency zones. If they export to Canada, Norway, Switzerland and Singapore to certain countries.

Prime Minister Boris Johnson and Chancellor Rishi Suna have stated that the new eight English free ports – announced in the Budget – will be a “transformative” benefit of Brexit.

But officials said on Sunday that trade agreements with the last 23 countries after Brexit contained some clauses, including clauses banning manufacturers from using free port-type sites.

Emily Thornberry, the shadow trade secretary, said the clauses could easily be removed in trade discussions. “On the surface, this seems like a catastrophic mistake made by a minister entering the silo,” he said.

“As a result, I fear that manufacturers in our country’s towns, cities and regions are at risk of losing access to key markets that have managed to bid for free port status.”

Typically, free ports allow companies to receive components and components from abroad without paying any taxes (including tariffs, VAT or excise duties) through a process called “tax refund”.

But free port businesses with these advantages will have to pay tariffs when exporting finished products to the 23 countries in question, unlike other companies in the country.

The Commerce Department said there had been no “mistakes” but acknowledged that the so-called “tax exemption bans” would apply to those countries.

“It is not uncommon for free trade agreements to have these provisions,” the Department of Trade and Industry said. “When these provisions apply, companies may take advantage of preferential rates under a tax refund or free trade agreement if they comply with the original rules of that agreement, whichever is best suited.”

Sam Lowe, lead researcher at the Center for European Reform, says the clause goes against political “narrative” eight new freeports announced in the spring budget it would be economically transformative.

“I’ve always thought that they were largely nonsensical,” he said. “It totally happens that if you produce certain products in free ports you won’t be able to take advantage of a lot of free trade agreements.”

According to Labor Party research, Britain’s exports to 23 countries concerned were worth € 35.56 billion in 2019, almost 10% of the world’s exports of goods from around the UK that year.

Thornberry said Commerce Secretary Liz Truss should have been aware of the clauses when she made the final deals in Canada, Singapore and Mexico, among others.

“It would take about an hour of discussion and a pen to explain to negotiators in those countries the UK’s free port policy and remove the ban clauses in those agreements, and I can’t understand why Liz Truss failed,” he said. .

“I have written to Liz Truss asking for clarification of the situation, and if it needs to be resolved, I have asked her to return immediately to the negotiating table with these 23 countries and remove these clauses before free British ports are launched later this year.”

New budget freeports include Teesside, London Gateway, Liverpool City Region, Humber, Felixstowe, Southampton, Plymouth and East Midlands Airport.

The issue does not apply to the UK’s trade agreement with the EU, which is the largest export market.