The deal of 1,300 pages was signed in Brussels on Monday evening by the 27 EU ambassadors, but how exactly various provisions are subsequently interpreted in practice remains to be seen. This year, the UK was the 6th largest trading partner for the Grand Duchy, with exports of well over €500 million euros, and the 8th largest import partner with €417 million of goods flowing into Luxembourg.
"Even with the new agreement in place, our companies are faced with new trade barriers, leading to adjustments as well as additional costs," says Christophe Brighi, working for the Chamber of Commerce and acting as economic and commercial attaché for the Luxembourg Embassy in London as of next year.
Customs and regulatory controls in trade with the island will still come into force on 1 January, despite both the UK and the EU having agreed on zero tariffs and quotas on all goods. "I am particularly concerned that all importers are subject to customs formalities and that they must respect the rules of the other side", he says.
Without the deal tariffs from the WTO would have been applicable, which could have meant that products such as meat and milk would be slapped with 50% tariffs and cars at 10% on bilateral exchanges. "In addition to zero tariffs on trade in goods, the agreement also limits the fees that customs may charge for services", Brighi explains.
Luxembourg's export and logistics companies will be scratching their heads at the moment: "The information from the British side came very late and is still very unclear. In other words, there has been a great deal of uncertainty until this week."
It is the "B-word" for the owners of Home from Home, a store on Route de Arlon importing English products. Despite being in contact with UK customs for months, John Heffernan, owner of the store, says he still does not know what can be imported and what not. It is all somewhat along the lines of "wait and see".
Home from Home has their first major delivery coming from the UK on 7 January. "It's all change, really", says Heffernan. Then the owners will see what arrives, and what does not.
