What is a Free Port?

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Brexit and the opportunity of new trading links for Britain have raised the question of setting up free ports.

Once Britain exits the European Union, the government can consider setting up free ports, but EU rules over state aid, tariffs and competition have forbidden the move.

Now think-tank the Centre for Policy Studies has issued a report looking at the idea written by MP Rishi Sunak.

Definition of a free port

Free ports are designated zones that are outside of a country for customs purposes. Goods can enter and leave a free port without undergoing import controls or tariffs.

Factories can be set up inside free ports that help companies reduce costs because they do not pay tariffs on raw material imports or finished goods exports.

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How do they help the UK economy?

Sunak reckons setting up a ring of free ports around the country could lead to up to 86,000 new jobs

Where would these ports be sited?

The obvious place is in the north. They could revitalise the Northern Powerhouse as many coastal towns and cities are ranked below average for incomes, jobs and other deprivation standards.

Britain already has a significant port infrastructure.

Free ports could quickly be set up in places such as Liverpool/Manchester; Tyne/Tees/Hartlepool; Hull/Grimsby/Immingham; Milford Haven; Southampton/Portsmouth, Belfast and the Forth and Clyde in Scotland.

Lots of smaller ports all over the country could also benefit, including Port Talbot, Harwich, Newport, Ipswich, Holyhead and Bristol.

Do other countries have free ports?

Yes. The USA is one example. The States has 250 free ports or free trade zones employing 420,000 workers. Every state has at least one free port.

Canada also operates a free trade zone policy.

Ireland runs a free port in Dublin, but EU rules have seen the trade benefits drop away.

What do the port owners say?

James Cooper, CEO of Associated British Ports, the which is the biggest owner of ports, said: “Ports are key to the nation’s trade and many offer ideal locations for new manufacturing. They should be front and centre of an industrial strategy to boost exports and re-balance the economy.”

“This report is an example of the creative and ambitious thinking that should underpin such a strategy, maximising the potential of our ports to promote export-led growth and helping forge a prosperous future post-Brexit.”

Read the full Free Ports Opportunity report

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