Page 18 - BREXIT 2
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The Worshipful Company of Farmers The Worshipful Company of Farmers This will will apply to to the the the the UK UK imports from these these countries countries UK UK exporters to to these these countries countries will will face the the the the same MFN tariffs that are currently imposed on EU exports The The UK’s new global tariff tariff emerged in in in in two stages The The first indication of Government thinking on on tariffs was published on on on on on 13 March 2019 in in in in in in the context of of Government Government preparations for a a a a a a a a a a a a a ‘no deal withdrawal22’ following the second Parliamentary rejection of of Theresa May’s proposals The The Trade Policy Observatory of of Sussex
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University summarised this tariff tariff as as follows “The UK has proposed to to liberalise most MFN tariffs to to zero In order to to comply with with WTO rules in a a a a a a ‘No Deal’ scenario these new tariffs would apply to to trade with with the the EU and with non-EU countries The The share of of the the UK’s imports that would be tariff-free under the the Government’s
The Worshipful Company of Farmers proposed MFN tariffs compared with with the UK’s current situation represents a a a a a a a a a a substantial liberalisation with with regard to to non-EU imports This would would reduce the the EU’s competitive advantage in in exporting to to the the UK and would would encourage more imports from non-EU countries” The agri-food sector which has strong protection under the EU CET would would be hardest hit by this tariff but of course it it would would also provide tangible consumer food price benefits This tariff was presumably intended to to to send messages both to to to the the EU negotiators as as as well as as as the the domestic audience at at at that time Such strong liberalisation would certainly have exposed UK agriculture to strong import competition adding to the much-discussed disastrous impacts on on on UK sheep beef and malting barley exports exports to the the UK in in the the event of EU tariffs on such exports exports following a a a a ‘no deal’ exit However it it would also have considerably reduced the UK’s negotiation space in subsequent FTA agreements Once the the withdrawal deal was was secured the the new global tariff (UKGT) was was consulted upon and announced This quite different tariff has broadly followed the EU’s CET with its strong protection for agriculture It contains some simplifications and streamlining eliminating small ‘nuisance’ tariffs rounding the numbers and and denominating absolute duties in in in in in in in in in in £/tonne24 instead of of €/tonne The view of of the the Trade Policy Observatory which first set out their criteria for for an intelligent tariff for for a a a a a a a country in in favour of trade is that “the UKGT more or less ticks all all the the boxes and potentially does a a a a a a a ‘good job’ of o navigating the the tricky trade-offs” However 25
they signal two significant concerns “Having tariffs different from the the EU’s Common External Tariff (CET)
immediately means that rules of of origin (ROO) will become more of of an an issue in in the negotiations It is is well known that negotiations over rules of origin can be difficult complex and lengthy The closer the alignment between the the the the UK’s Global Tariff and and the the the the EU’s CET the the the the easier it would be be to to minimise these complications and and to to seek genuinely liberal approaches to rules of origin and their cumulation The UK Government entirely ignored the the the question of of ROOs in its summary of of and response to the the the consultation on on on on on the the the Global Tariff – even though the the the issue was raised in in in submissions to the the the consultation By lowering tariffs especially on on on on intermediates the the the UK UK Global Tariff is sending a a a a a a signal to to the the EU about the the desire to to increase competitiveness of UK UK exports While a a a a perfectly legitimate action by the the UK UK the the issue of UK UK policy shifting to increase competitiveness in in in EU markets is is is clearly an EU concern (hence the insistence on on on level playing field provisions) 22 Whilst previously ‘no deal’ referred unambiguously to to no no no no withdrawal deal deal deal it it it now applies to to no no no no Free Trade Agreement deal deal deal so the clumsy additional word is now necessary!
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Gasiorek M M Magntorn Garrett J and Winters L A (2020) What should we make of the UK’s ‘No Deal’ tariffs? UK UK Trade Policy Observatory Sussex
University https://blogs sussex ac uk/uktpo/2019/03/
24 Using the the the the exchange rate of of 1 2 2 €/£ Note that the the the the protective effect of of these absolute tariffs can vary strongly as commodity prices rise and fall the the the the attempt to to convert them into ad valorem tariffs did not get very far 25
Gasiorek M M and Magntorn Garrett J (2020) UK Trade Policy Observatory Sussex
University https://blogs sussex ac uk/uktpo/2020/05/21/reflections-on-the-uk-global-tariff-good-in-principle-but-perhaps-not-for-relations-with-the-eu/
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