In the wake of the Government’s defeat on the “meaningful vote” on 12 March 2019, the Government has published the proposed rates of import duty in the event that the United Kingdom leaves the European Union without a deal.
The proposed tariffs will apply to goods of both EU and non-EU origin. The reason for this approach is that WTO rules prohibit the use of origin-based tariffs other than in limited circumstances; for example, where a specific trade deal has been agreed with that place of origin (the “most favoured nation” concept – treating one’s trading partners equally on the principle of non-discrimination). Therefore, in the absence of a trade deal agreed between the UK and another country or trading bloc, the UK is not permitted to levy preferential or discriminatory tariff rates for goods originating from a specific country or trading bloc.
The overall picture is that the UK will be less protectionist than many commentators had anticipated: 87% of goods will be subject to a zero-tariff rate compared to the current 80% of goods. Where goods will not be subject to zero-rate tariffs and therefore subject to import duty, overall the levels of duty will be less than currently levied under the EU arrangements.
Where goods are not subject to zero-rate tariffs and therefore subject to some tariffs, those tariffs are expressed as percentages of the existing EU rate.
The few protectionist tariffs which will apply are reserved for specific sectors of the UK economy, including the Agriculture Sector. The picture here is varied and protection across a number of key UK-agricultural products includes:
|Product||Percentage of the
existing EU rate to apply
|Milled and semi-milled grain||83%|
Overall early indications are that:
- the new tariffs could be damaging to EU-based exporters to the UK, because potentially cheaper non-EU goods will be subject to lower (or zero-rated) tariffs, which will help to make those goods more competitive in the UK market than their EU-based alternative, and
- many producers in this country will be disappointed by the lack of protection for their sectors, such as the National Farmers Union.
The Government has stated that the new tariff regime will be temporary, to give time to evaluate the impact of the tariffs.
The full suite of tariff documentation can be found at: https://www.gov.uk/government/collections/customs-vat-and-excise-regulations-leaving-the-eu-with-no-deal#tariff-regulations
The full tariff schedule can be found at: https://t.co/3WbIbDcAvN.