The government announced in March that several Free Ports, sometimes called Free Trade Zones, would be opening in the UK, in a measure to help develop the Uk’s post-Brexit international trading arrangements.
Business Live reports that Chancellor Rishi Sunak announced the eight UK Free Ports in the March Budget, which include East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, Thames and Teesside, with Newport in Wales, and ports in Milford Haven and Holyhead also contending for Free Port status.
But what exactly is a Free Port?
Free Ports are commonly used all around the world, although there are few in the EU, to help promote trade and, in particular, the export market.
The government has said it will be introducing broader tax and financial incentives to encourage businesses to operate within the Free Ports, such as greater capital and building allowances.
Currently, there are no operational Free Ports within the UK. While the UK was still a member state of the EU, the country was unable to negotiate individual trade agreements with other countries, but in the post-Brexit landscape, the UK has the freedom to set its trade policies and re-introduce Free Ports.
Free Ports are designed to both facilitate international trade and promote the region's economic development in which they are located. A Free Port is an area that is physically within a country but effectively treated as being outside of it for tax purposes, meaning it would need to be a designated physical area.
The designated area would be a geographical location, rather than a single building or campus, and likely entail an enclosed area where the flow of goods and people entering and exiting could be monitored and controlled, to prevent criminal behaviour relating to people's illegal entry or the unpaid import taxes for goods.
The first Free Ports will likely open in the UK towards the end of this calendar year.]
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