The Telegraph, May 19, Patrick Minford
The government has now published the tariffs it will levy on countries with which it has no free trade agreement (FTA). From the end of this year when we leave the EU, this will replace the EU tariff system which we still share within the EU customs union.
Briefly, what it does is abolish tariffs on inputs and goods we do not produce, while keeping tariffs at roughly current rates on products made here. It also abolishes a huge swathe of complex ‘variants’ put in place by the EU largely to satisfy special EU producer interests.
Remember these tariffs apply to those we do not have an FTA with. However, we are actively working to negotiate FTAs with non-EU countries, such as the US, Australia and other Asia-Pacific countries. Our aim is to give tariff and barrier-free access to them in exchange for the same for our key industries, both goods and services.
At the end of that process, effectively most of these tariffs will have no force since products from all over the world will come in under FTAs free of barriers; world prices will at last prevail in the UK market again, reverting to our distant free trade history.
As for the EU, with whom we are also trying to reach an FTA, either it will become more flexible and agree to Canada-plus; or there will be no EU FTA for now and tariffs will be levied both ways, as must happen under WTO rules, since these ‘MFN tariffs’ apply to any country without an FTA. WTO rules also rule out discriminatory action on standards and mandate a seamless border; so there should be no illegal border non-tariff barriers on EU-UK trade under WTO rules.
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