Wales is to get its own freeport.
Confirmation is expected later today following an agreement struck between the UK and Welsh governments.
With eight freeports being approved for England and a deal also struck with the Scottish Government, it is understood that the Cardiff Bay administration has secured the financial backing it was seeking for a Welsh freeport, with the potential for more than one, with the Westminster government.
Initially the UK Government had offered the Welsh Government around £8m to support setting up a freeport in Wales. Freeports in England have been offered around £25m each, with a similar funding deal secured by Nicola Sturgeon’s government with the UK Government.
It would appear that the Welsh Government’s funding position has now been met, following protracted negotiations with the UK Government’s Secretary of State for Levelling Up, Michael Gove.
Ports across Wales, including Holyhead, Milford Haven and Associated British Ports’ South Wales ports, have expressed interest to securing freeport status.
While a devolved matter, the UK Government has been consistent in wanting to see a freeport established in Wales.
A freeport prospectus will now be published with bids then being considered. The UK and Welsh governments are expected to have an equal say in the decision making process. There is potential for a Welsh freeport to have multi-sites, which throws up the prospect for ports in South Wales forming part of a wider freeport zone with Cardiff Airport. The port of Holyhead ha also made a strong case for freeport status.
Goods entering freeports would not have to pay tariffs, import VAT or excise duty until they leave the freeport and enter the domestic UK market, with simplified customs procedures and declarations.
However, there are commentators who believe they would have little net economic benefit, claiming they mainly displace business activity from elsewhere.
The UK Trade Policy Observatory said its analysis had found that the policy would have little effect in the UK because tariffs were already low. The UK had seven free ports between 1984 and 2012, but were wound down due to their limited economic impact.