Friends don't let friends stay in something as stupid as the EU - Credit, public domain

It’s a long running and consistent theme of the scare stories about Brexit. That Britain will now have to charge WTO tariffs upon all imports. This is, of course, incoorect, the truth is that:

To insist, meanwhile, that we must raise tariffs on the imports we desire is to misunderstand the WTO system. As a source in Geneva explains, Britain is a WTO member in its own right and will still be so even after Brexit happens. This means that we have promised not to charge higher than the allowable ceilings in tariffs upon imports from other WTO members. The Most Favoured Nation clause also states that whatever we do decide to charge ourselves, we must apply the same rate to the same products from all different WTO countries.

But not charging higher than the allowable ceilings does not commit us to charging anything at all. We can apply a 0 per cent rate (yes, I checked) if we so wish.

That is, being outside the EU means we do not have to charge the EU external tariff rates upon anything and can insist that we pay ourselves nothing on all sources of food from everywhere. Economists are reasonably certain this is going to lead to lower food prices in Britain.

That really is what the situation is. At which point we get the Independent’s InFact column:

Under this cliff-edge, the UK would be forced to trade with the EU under World Trade Organisation (WTO) rules. Currently, goods moving between the EU and UK don’t need to be checked at borders and face no tariffs, and complex supply chains in industries like car-making cross national boundaries.

But under WTO rules there would be immediate customs and regulatory checks and the UK and EU would have to pay tariffs on each others’ goods.

This isn’t something the EU can just opt-out of: the WTO effectively requires countries to charge the same tariffs to countries they don’t have a trade deal with, a rule called the “most favoured nation” tariffs. Grant someone a special favour, and you have to do it to all members.

A parliamentary report into a no-deal concluded that “this would almost certainly involve the immediate imposition of tariffs across a range of sectors”.

Some tariffs would be more significant than others: the highest would be on British farmers, who would face 30-40 per cent charges for exporting to the EU, effectively making many exports unviable. Lower tariffs would be on things such as automotive parts, where a 5 per cent charge would apply.

These tariffs are what Britain, currently a member of the EU, charges countries outside the EU, as a member of the trade area. Britain would, now outside the EU and without any special opt-out, be on the other side of the fence.

No, we don’t have to charge tariffs on what we import from the EU. But rather more fun is the connection that they don’t make, isn’t it? So, we’ll be out of the EU’s tariff regime, we don’t have to charge EU tariffs on imports from non-EU countries, as we do now. And they really are quite clear about the implication there, aren’t they, that this will make food and other imports cheaper in the UK. I mean, you did manage to gather than from their exposition?

Isn’t it just fabulous the job our national press is doing in speaking truth to power, sorting through all that fake news for us to bring only the nuggets of verified truth? Thank the Lord for factchecking columns, eh?

Support Continental Telegraph Donate

3 COMMENTS

  1. Trump this morning tweets that Tariffs are “the greatest!” But they are great only in compelling foreign leaders to talk to him, enabling him to act without the consent of his dithering allies in Congress, and enabling him to make progress toward his alleged goal of going the maximum distance in the exact opposite direction (mutual free trade).

    Tariffs are not the greatest! Taxes that are incorrectly perceived as being paid by foreign businesses, and thus can be raised without great political damage, are dangerous. And taxes that can be levied discriminating among countries and among products takes people away from producing and toward lobbying and backslapping for legislators to do favors to “protect” their industries. That is why the WTO was invented and why the case opened against Trump’s tariffs at the WTO should prevail.

    Back to the theme: Yes, the British press is arguing that newfound liberty would be used to achieve the exact worst result, and advocates of liberty must have wanted that result all along.