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Brexit: Can the UK release the tariffs to zero?



  Felixstowe port

MEPs are set to hold important votes next week on the terms of Brexit, whose outcome may determine whether the UK has greater flexibility to set its own trading tariffs.

A second "meaningful vote" on the Brexit agreement negotiated by Prime Minister Theresa May is expected to take place on Tuesday. that the UK government could cut trade tariffs between 80% and 90% of goods, with some scrapped charges.

Business Secretary Greg Clark told the BBC that new tariff plans would be published only after next week's vote on Mrs May & # 39; s The Brexit agreement, if clear, Britain should leave the EU without an agreement.

He said the changes would have "major implications" for some sectors.

What is a tariff? tax is applied only at international level Allied merchandise

In most cases, tariffs are applied to imported goods by the country that imports the goods. em.

But it can also be tariffs on exported goods.

What are tariffs for?

Import duties provide a local competitive advantage because it is not covered by the tariffs.

They also provide revenues for governments, but compared to other types of tax, the contribution is relatively small in rich countries.

Customs revenue collected by the United Kingdom was approximately SEK 3 billion in 201

7.

Under a non-agreement on Brexit, it may be less if the tariffs are eliminated enough or much, as the remaining tariffs would apply to EU goods that

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PA

Captions

Reports show that certain sectors, including cars, will maintain customs protection

Why do the UK have to set new tariffs?

In one word: Brexit. At present, the EU is using the United Kingdom's Common Customs Tariff for goods imported from outside the EU (except for goods from countries with which the EU has a free trade agreement).

It will continue if there is a revocation agreement and as long as the backstop to avoid a hard border in Ireland is in force.

After that, or in the case of a British agreement, the UK would no longer apply the EU customs policy and so one has to decide on any charges to be imposed.

What are the current tariffs?

To give some examples that the UK could apply if it chose to: The EU highest car tax is 10%, while on some types of clothing and porcelain it is 12% 19659003] On some types of beef it is 12.8% plus 265 euros per 100 kg (agricultural tariffs can be very complicated).

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Getty Images

Captions

If Britain reduces tariffs, some industries, especially agriculture, may face more competition

Are there any restrictions on the tariffs that the UK can impose?

The World Trade Organization rules (Britain is a member) pose some obstacles. WTO members have "schedules" that are mainly lists of the fees they promise not to exceed.

Countries can freely apply tariffs below these levels. Generally, they must apply the same charges to goods from all members, subject to some exceptions.

They can reduce or eliminate tariffs on goods from countries with which they have a free trade agreement.

Rich countries can also do so for goods from developing countries.

What are the potential benefits?

Tariff revenue (as it is) would go to the UK Treasury. It is currently paid to the EU (less 20% for the cost of collecting it).

It would also allow the UK government to set tariff levels in line with its assessment of the UK's best (rather than EU interests). It is likely that some tariffs would be reduced or eliminated, especially when there are no UK manufacturers to protect.

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Getty Images

Taking an obvious example: citrus fruits.

It can help lower costs in stores.

However, it is important to note that some goods are already exempt from EU tariffs, where the country concerned has a trade agreement.

Another consideration is that lower prices can be offset by a fall in the value of the pound, which analysts think is particularly likely in the event of a no-deal Brexit.

What are people worried about?

If Britain reduces tariffs, some industries, and especially agriculture, may face more competition.

Some have suggested that if Britain were to remove all customs (as some have advocated), it could lead to many business failures between manufacturers and farmers.

It is probably why (unconfirmed) reports of government plans suggest some sectors will retain customs protection, including agriculture, ceramics and cars.

To the extent that the United Kingdom retains some duties, if there is no scenario, they would have to apply for imports from the EU, which are currently completely duty free. It follows from WTO rules. [19659000] It can make EU goods more expensive.

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