The United Kingdom announced on Tuesday (19.05.2020) a new post-Brexit tariff regime to replace the European Union (EU) external tariff, maintaining a 10% tariff on cars but reducing levies on tens of billions of dollars of imports in the supply chain.
After decades of outsourcing its trade policy to the EU, Britain is seeking free trade deals with countries around the world and aims to have agreements in place covering 80% of British trade by 2022.
El new tariff regime, valid since January 2021, marks a departure from what some U.K. officials call an overly complex EU system that sets out Britain's position while negotiating trade deals with the United States and the Brussels-based bloc.
But it will mean that if Britain and the EU fail to agree a free trade deal by the end of the year, the price of some foods, cars and some chemical inputs imported from the bloc would rise sharply.
Britain said the regime, known as the UK Global Tariff, would be simpler and cheaper than the EU's Common External Tariff. It would apply to countries with which it has no deal and removes all tariffs below 2%.
«Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products"said International Trade Secretary Liz Truss.
The government said tariffs would be eliminated on a wide range of products, with 60% of trade entering the UK tariff-free under WTO terms or through existing preferential access.
The UK will maintain tariffs on products that compete with industries such as agriculture, automotive and fishing, and will remove levies on 30 billion pounds ($37 billion) worth of imports entering UK supply chains.
"Maintaining agricultural protection makes sense as a bargaining chip for EU-US trade negotiations. But it means big cost increases for agricultural imports if there is no UK-EU FTA. “said Thomas Sampson, associate professor at the London School of Economics.
The UK will also remove tariffs on products that support energy efficiency and introduce a temporary zero tariff on products used to combat COVID-19, such as personal protective equipment.
The new regime did not meet all expectations.
A representative of a chemical company who declined to be named said the company had been promised to remove tariffs on inputs for the sector. “It is disappointing across the board,” the representative said.
Source: Reuters
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