In Economic assets and infrastructure, Economic assets and infrastructure, Innovation, News, Projects, Transport and connectivity, Transport and Connectivity Schemes

Paul Carbert, Economic Policy Co-ordinator at the North East Local Enterprise Partnership, outlines the North East’s innovative response, which would drive economic growth in the region, create jobs and regenerate coastal communities.

As the UK prepares to complete its exit from the EU and establishes new trading relationships around the world, the UK government launched a consultation earlier this year on Freeports policy.

Freeports and free zones are in place in many parts of the world. They are areas within a country’s land border where different customs rules apply, and are being considered by government as part of its future strategy to strengthen trade relationships and secure inward investment. Freeports provide benefits for exporters and importers because goods can be imported into, manufactured, and exported from inside the zone without incurring tariffs and customs duties unless they enter the domestic market. They offer the potential to promote regeneration and job creation in those areas within the zone and drive growth in the wider economy.

The government’s consultation has sought views on how they should structure their approach to Freeports. It envisages that because of their likely location close to ports or in coastal areas, the strategy offers the opportunity to stimulate the economies of often deprived areas. They are also seeking proposals which position Freeports as hubs for innovation to test new ideas and technologies. The North East Local Enterprise Partnership, and an active list of partners comprising of the North East and North of Tyne Combined Authorities, Business Durham, the CBI, the North East England Chamber of Commerce, Port of Blyth, Port of Sunderland, Port of Tyne, Newcastle International Airport, University of Sunderland, Durham University, Newcastle University, and Northumbria University, submitted a response to the Government’s consultation earlier this month that outlines the region’s preferred approach to Freeports; one that focuses on new growth and jobs, the regeneration of key coastal areas and the development of other parts of the regional economy. It also reinforces the need for the UK’s existing labour market, security and environmental standards to be maintained.

After conducting research and gathering the views of local partners, the North East response has proposed that a multi-site, digitally enabled Free Trade Zone – linking key manufacturing sites in the North East with ports – would provide the greatest benefit for the North East. It would add value to our current economy, provide an opportunity to deploy and test a range of new digital approaches, and guard against the risk of local displacement of economic activity. It would complement a free trade deal with the European Union.

The innovative approach put forward for the North East takes into account the region’s industrial and logistics structure and would build on its wide-ranging assets. It would allow the region’s digital sector to develop innovation that would improve the operation and efficiency of Freeports, and provide an opportunity to stimulate job growth in key sectors such as advanced manufacturing, energy, digital, and transport, particularly at a time when the region’s economy will be continuing to recover from the impact of the Covid-19 pandemic.

Whilst the region agrees Freeports are not a substitute for a comprehensive free trade deal with the EU – the preference in the North East is for both a deal and a Free Trade Zone – should the UK leave the transition period without a new trade deal, Freeports would mitigate some of the impact and provide opportunities to build on existing supply chains and clusters, and attract inward investment.

Following the submission of the region’s response to the Government’s consultation, the North East LEP and its partners will now work on preparing a collaborative bid to a government sponsored competition which is expected in the Autumn, to establish a North East Free Trade Zone.

To receive further updates about the North East LEP’s bid for a North East Free Trade Zone, please sign up to receive Insights North East, the newsletter from the North East Local Enterprise Partnership.

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