What are the benefits of introducing a Single Trade Window, what challenges need to be considered throughout its development, and how may the future of trade at the UK border once the system is introduced? Ross Law reports.

In July, HMRC awarded Deloitte a £100 million contract spanning a potential seven-year period, to develop a Single Trade Window (STW): a digital system described by the UK government as a single digital gateway at the UK border for traders to complete their import, export, and transit obligations.

The project makes up part of the government’s wider 2025 UK Border Strategy, launched in late December 2020 with the ambitious goal of creating the “world’s most effective border” through the deployment of new technology to make trade more safe, secure, and efficient.

Breaking down the programme, Stephanie Rickard, professor of political science at the London School of Economics tells Retail Systems that the implementation of such system with its anticipated efficiencies, should result in “greater flow of trade across the UK-EU border”.

The STW also forms part of the UK’s World Trade Organisation’s (WTO) Trade Facilitation Agreement (TFA) commitment. Entered into force on 22 February 2017, the TFA sets out measures for effective cooperation of WTO members between customs and other appropriate authorities on trade facilitation and customs compliance issues.

Meeting WTO obligations

William Bain, head of trade policy at the British Chambers of Commerce (BCC) says that along with trade document digitalisation, the development of Single Trade Windows are “gathering pace” in the UK, the EU, and elsewhere.

“The BCC supports this move towards more integrated user interfaces on consignments for border control purposes,” he says, noting that the first part of system test and evaluation regarding development of the UK’s STW by Deloitte is due to be rolled out from the end of 2024.

“Between now and then we’ll be seeking to be involved in the co-design, testing and policy work of STW, focusing on the benefits it could provide to tens of thousands of traders,” Bain adds.

As Rickard explains, the WTO’s agreement on trade facilitation, which the UK signed up to in 2021, features the requirement for signatory countries that they have a STW in place where possible.

As such, the UK has set the creation of an STW in motion, so they are “able to assert to the WTO that they are one such country which is in the process of meeting this requirement”, she says.

“The fact the WTO has this agreement on this technical topic goes to show just how important the enactment of a STW is for trade," Rickard adds, noting that the STW will help solve some of the current challenges such as delayed processing times at the UK-EU border by “making the transaction easier by reducing the cost and allowing businesses to have one portal to put in their information to ease the transactions in a repeated fashion”.

Window of opportunity

According to the World Customs Organisation, “an average international trade transaction involves 27-30 different parties, some 40 documents with 200 data elements among which about 30 of them are repeated and 60 to 70 per cent [of data] is re-keyed at least once”.

"Because with the STW they can put in their information once and use that repeatedly to do those transactions over and over," Rickard says. "It also may make it easier to get the certification from the government and make that flow of information easier, less costly, and more transparent."

Rickard points to the enactment of a similar system in the US – the Automated Commercial Environment (ACE) order which was implemented in May 2015 – which has vastly improved the efficiency of the trading process.

Research for the financial year of 2022 by the US federal agency of Customs and Border Protection (CBP) showed that since the implementation of ACE, factors such as putting 269 forms online, delivered an estimated $720 million in processing efficiencies for the CBP and an estimated $2.25 billion in processing efficiencies for industry.

In terms of time savings, the report found that the ACE directly contributed to a 25 per cent reduction in the time it takes to process cargo entries, and a 15 per cent reduction in the number of manual interventions required to process cargo entries.

"Clearly, there are big efficiencies to be made here if Deloitte can set up a similar system for the UK's border controls," Rickard suggests. "Research has shown that when you reduce those costs, trade flows increase – there are more imports, exports, and more business overall.”

"Hopefully in the UK with the STW we will see trade increase, and this is what all of the research suggests: when you lower the costs, you'll see trade increase,” she adds.

A further benefit of a functioning STW would enable traders, government authorities, customs brokers, trade finance providers and all other actors involved in international trade to exchange information and communicate via one portal, explains Dr Anna Jerzewska, chief executive and founder of consultancy firm Trade and Borders.

“Assuming it is implemented well,” she says, “the STW will help avoid document duplication and should save those it relates to both time and resources.”

The Brexit factor

As seen from mainstream news reporting, Brexit has caused significant friction at the border. Adjusting to new normal of trading across the border, no longer as a member of the single market, has resulted in new strains on the UK border control with televised news images of extreme queues and delays at the key UK border of Dover demonstrating this major issue.

"Brexit, in effect, created a border where there hadn't been one previously," Rickard notes. "All of a sudden, businesses that hadn't had to deal with the likes of customs declarations, safety declarations, rules of origin declarations, we faced with an influx of new paperwork."

Jerzewska however points out that the STW is not a silver bullet towards the new complications which have arisen since the UK’s hard Brexit departure from the single market.

While the enactment of the STW will not remove any of the new border or administrative requirements resulting from leaving the Customs Union and the Single Market, “it will simplify the way paperwork is collected and submitted and the exchange of data between traders, logistics providers and authorities,” Jerzewska explains. She adds that a caveat worth highlighting is that the STW will only be applied in the UK.

While the European Commission passed on giving a specific comment on the development of the UK’s own border controls, a spokesperson said: “It is up to the UK to draw up a workable import regime, taking into account the significant volume of exports from the EU to the UK.

“Nevertheless, the Commission is in close contact with the UK authorities and Member States in order to understand the consequences and requirements resulting from the future implementation of the "Border Target Operating Model" for the EU.”

Making it work

On her hopes for the deployment of a STW, Jerzewska says that the full scope and development of a STW for the UK will require a “very careful design and coordination between various users, stakeholders and government departments”.

“For the full benefits to be achieved, the UK’s trading partners would also need to have their version of the STW operational, and the two systems would need to be connected and interoperable,” she says.

Arguing that there are a range of issues that need to be considered, the “chosen supplier [Deloitte] will need to juggle changing design and requirements, the interests of various stakeholders and above all ensure that the finished product works for users.”

Jerzewska notes that the STW is not just a customs portal but one that would also allow traders to submit information on SPS controls, a set of international rules designed to protect the health and safety of animals, plants, and consumers.

This will mean, as Bain and Jerzewska point out, that other bodies such as the Department for Environment Food and Rural Affairs (DEFRA) and HMRC will need to be involved throughout the system’s design phase.

“This is no small task, especially given the staged approach and various versions of the STW needing to be delivered,” she adds.

Live produce comes with increased complexity, with Rickard noting that animals, animal products and live plants are "one of the stickiest issues in terms of sectors in terms of UK-EU trade post-Brexit”.

Rickard posits that Deloitte will try and include that segment of trade and the economy in the STW system, saying: "One hopeful goal is to get that included in the same STW; while this kind of trade requires more inspections at the border than say textiles, if textiles are going in through the STW, and that reduces the number of physical inspections of textiles, that may free up at least some people power in order to have more inspections of animals and live plants.”

“Hopefully it will ameliorate some of these more critical areas and the flow of items within this trade segment," she adds.

Conclusion

The introduction of a STW is an important aspect of moving the UK’s trade economy forward, something which is more pronounced given the reality of a more complex border environment in post-Brexit Britain.

The challenge of creating a successful system that streamlines trade flow and drives efficiencies will require a measured approach by Deloitte, along with close collaboration and adherence to a range of diktats that the STW can and should cover to render a more harmonious cross-border trade environment for the UK.

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