Update: UK’s Global Tariff Announced

Article   21 May 2020

The UK introduced the UK Global Tariff on 19th May for the post-Brexit trade regime, replacing the existing Common External Tariff from the EU. It’ll come into force in January 2021. These tariffs will form the basis of the import tariffs for goods entering the UK, but can be overridden by any trade deals struck with other countries.

Major concerns will remain within the farming sector in the UK, as the possibility of any bilateral trade agreements which could undercut these remains. Of particular concern is the possibility of concessions made to the US on agricultural exports to the UK as part of a wider US-UK trade deal. The question remains over cheaper imports affecting UK prices, along with differing welfare and safety standards of the US production.

In the interim, the Global Trade Tariff has eased some of these concerns. The UK government has taken heed of the strong lobbying of the UK farming sector and retained the majority of the protection of the UK’s agriculture sector.

 

What is Proposed?

Agriculture tariffs in UK are predominantly maintained:

    • Average tariff for agricultural products slightly reduced from 18.3% to 16%
    • Existing protection of markets at this stage to be maintained for now including Beef, Lamb, Poultry and Pork .
    • Small liberalisation of Sugar – 0% tariff rate quota (TRQ) on Refining Sugar – 260k per annum any origin
    • Import tariffs on Bananas remains to protect preferential tariffs for developing nations
    • Simplification of tariffs applied
      • Tariffs to be simplified & slightly rounded down
      • Tariffs of 2% removed

“Agricultural products, where tariffs have been largely retained with the aim of maintaining similar current consumption and production patterns and avoiding additional disruption for UK farmers and consumers”

 

Zero Tariffs applied to some ingredients:

    • Cooking products such as baking powder (down from 6.1%), yeast (down from 12%), bay leaves (down from 7%), ground thyme (down from 8.5%) and cocoa powder (down from 8%)

 

Table Comparing the UK Global Agricultural commodity Tariff with EUSource: MFN Tariff Policy – the UK Global Tariff Government Response and Policy

 

The farmers unions from across the UK gave a united response

“We are pleased the government has listened and maintained many of the safeguards currently in place for UK farmers under its new UK Global Tariff schedule. This is particularly important in fulfilling the UK government’s commitment not to undermine our high food and farming standards.

“It is worth remembering, however, that these tariffs are likely to be negotiated away as part of any trade deals that will be struck in the coming months, and so those deals must include strong provisions ensuring food imports are produced to the same standards required of our own farmers.

“Not only will this help the government fulfil its vision of a sustainable and profitable UK farming sector but will also meet public demand that our standards are not undermined in future trade policy.

“Although the overall position appears to support UK farmers, we need to examine and fully consider all the implications of the simplifications involved. For instance, it is still likely that the changes will lead to increased competition for some domestically produced commodities and we will need to understand the precise nature and impact of that.

“We are also urging the government to provide clarity around its ability to adjust the tariffs announced today, in particular in the event that there is no negotiated agreement with the EU on a future relationship by the end of the year.” (Source)

If you would like to look at the changes by a product level please follow this link.

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