Realist, not conformist analysis of the latest financial, business and political news

Brexit And Coffee Tariffs From Poor Countries

Thanks for all the fish, obviously

Certain people seem to be getting the wrong idea about these new tariffs that the British government is imposing after Brexit. Yes, obviously, as all rational traders know, there should be no tariffs on anything ever. This also not being the system we’re about to gain as of Jan 1.

However, it is also true that there’s a few bits an’ bobs of detail that must be dealt with along the way. For example, here we’ve a whinge about coffee tariffs:

One way of reading that is that we’re right bastards because the EU allowed 0% tariffs on imports from poor countries while the UK system will have 6%.

Yes, yes, agreed, it’s the imports which are the benefit so it’s us here getting screwed but still. Except, well, it’s not actually true.

The 0% comes from the General Scheme of Preferences. We get to buy stuff from poor peeps – or at least peeps in poor countries – without taxing ourselves in the form of tariffs. The EU has such a system. So does the new and liberated UK system:

The UK Generalised Scheme of Preferences from 1 January 2021
The UK GSP will continue to provide trade preferences to the same countries as the EU’s GSP. There will be 3 frameworks:

least developed countries framework (LDCF)
general framework
enhanced framework
These frameworks will replicate the same market access as the EU’s GSP.

Where there was a 0% tariff ‘cuz peeps wuz poor there will be a 0% tariff.

Amazingly, details matter.

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