Gibraltar: The agreement that promises to abolish borders and threatens to paralyze trade

A landmark agreement between the EU and the UK concerning Gibraltar promises to dismantle borders and usher in an era of free movement for people and goods, effectively ending a long-standing division symbolized by the border fence. This accord, set to be implemented on July 15, is hailed as a significant step forward following Brexit.

However, as the implementation date nears, significant concerns are emerging regarding the potential economic and trade repercussions. Customs agents and business representatives in the Spanish towns of Algeciras and La Línea de la Concepción, which are intrinsically linked to Gibraltar's economy, are at the forefront of these objections. They warn that the new framework could lead to increased operational costs and "economic suffocation" for numerous businesses managing daily trade flows between the EU and the British territory.

The core of the dispute lies in the implementation of the New Automated Transit System (NCTS), a European mechanism for monitoring and controlling goods moving between different customs territories. According to customs agents, this system effectively transforms them into financial guarantors for transactions, compelling them to cover potential customs and tax liabilities that may arise during goods transit. The primary objection is that this responsibility is shifted to intermediaries instead of the actual owners or importers of the goods, a role for which customs representatives argue they are neither financially equipped nor insured.

This issue is compounded by the imbalanced trade relationship between the EU and Gibraltar. Annually, goods worth over 1.5 billion euros are transported from Spain and the rest of Europe to Gibraltar, while imports from Gibraltar to the EU are minimal. Consequently, the burden of the new requirements falls almost entirely on Spanish businesses involved in exports to the territory. Industry calculations suggest that the total amount of bank guarantees and insurance coverage required to continue operations could exceed 400 million euros, a sum many small and medium-sized enterprises may struggle to secure amidst high borrowing costs and limited access to financing.