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Tariff scheme on imports from outside the EU in no-deal Brexit would be a 'wrecking ball' to the economy

Products coming from the remaining 27 EU member states which are currently imported free of tariffs will now face levies for the first time. Credit: PA

The decision to slash tariffs on a range of imports from outside the European Union if MPs vote on Wednesday to leave without a deal would "take a wrecking ball" to the economy.

The national secretary of the GMB union, Jude Brimble said trade secretary Liam Fox's plan to cut tariffs was "grossly irresponsible" and would put tens of thousands of jobs at risk.

Despite the pledge to slash tariffs, the new trade deal would see some products coming from the remaining 27 EU member states, which are currently imported free of tariffs, facing levies for the first time.

Ministers said that, overall, the changes would represent a “modest liberalisation” of the UK’s tariff regime.

Under a unilateral temporary scheme announced by the Government, 87% of all imports to the UK by value would be eligible for zero-tariff access – up from 80% at present – while many other goods will be subject to a lower rate than currently applied under EU rules.

87%
Imports to the UK by value which would be eligible for zero-tariff access under new rules.
80%
Imports to the UK by value which are currently eligible for zero-tariff access.

In special arrangements for Northern Ireland, the UK’s temporary import tariffs will not apply to EU goods crossing the border from the Republic.

Among the 13% of imports by value which will be subject to tariffs will be:

  • Beef, lamb, pork and poultry and some dairy products, in order to protect UK farmers and producers from cheap imports;
  • A number of tariffs on finished vehicles to support the automotive sector, which will not apply to car parts imported from the EU to prevent disruption to supply chains;
  • Products including certain ceramics, fertiliser and fuel, where tariffs protect UK producers against unfair practices like dumping and state subsidies;
  • Goods including bananas, raw cane sugar and certain kinds of fish, where tariffs are used to permit preferential access to the UK market for developing countries.
Tariffs on finished cars and trucks will be set at 10.6%. Credit: PA

If the UK leaves the EU without a deal on March 29, the temporary schedules will apply for up to 12 months while a full consultation and review of a permanent approach is undertaken.

Proposed tariff rates on a range of food products were announced as a proportion of the so-called “most favoured nation” (MFN) currently imposed by the EU on imports from countries which do not have a free trade agreement.

Rates include beef (53% of MFN), poultry meat (60%), sheep meat (100%), pig meat (13%), butter (32%), Cheddar-like cheese (13%), protected fish and seafood products (100%) and milled and semi-milled products (83%).

Tariffs on finished cars and trucks will be set at 10.6%, down from the EU MFN rate of 11.3%, while for finished buses the rate will remain unchanged at 12.6%.

Britain's trading relationship with the EU will radically change after Brexit. Credit: PA

Other rates include 0.2% on mineral products, 0.1% on chemical products, 2.1 on fertilisers, 0.1% on plastics and rubber, 0.2% on leather and hides, 0.9% on textiles and textile products, 0.3% on stone and cement, 1.2% on ceramics, 0.2% on glass and 2.9% on transport equipment.

Trade Policy Minister George Hollingbery said: “Our priority is securing a deal with the EU as this will avoid disruption to our global trading relationships. However we must prepare for all eventualities.

“If we leave without a deal, we will set the majority of our import tariffs to zero, whilst maintaining tariffs for the most sensitive industries.

“This balanced approach will help to support British jobs and avoid potential price spikes that would hit the poorest households the hardest.

“It represents a modest liberalisation of tariffs and we will be monitoring the economy closely as well as consulting with businesses to decide what our tariffs should be after this transitional period.”

Liam Fox's no-deal tariff scheme could threaten jobs, union bosses say. Credit: PA

But there was criticism from Trade Unions over the government's announcement of a no-deal tariff scheme.

Ms Brimble from the GMB union said: "Liam Fox's plan to crush tariffs takes a wrecking ball to our economy. It would risk tens of thousands of jobs in our proud ceramics industry alone.

"The Government has failed to publish any impact assessments for this disastrous scheme and has not consulted with unions and businesses affected. Their claims to be working in the national interest are today in tatters.

"This grossly irresponsible plan shows their true agenda, where jobs and communities are crushed under the heel of an extreme ideological agenda. If allowed it would inevitably lead to retribution from other countries and turn the UK into a Wild West economy.

"That ministers think they can get away with this grossly irresponsible plan shows why MPs of all parties must put the national interest first in preventing the UK leaving with no deal - and why we need much stronger democratic safeguards in all trade negotiations to prevent ministers from running riot with jobs and communities."

TUC general secretary Frances O'Grady said: "Ending tariffs in the event of a no-deal Brexit would be a hammer blow to our manufacturing industries and the communities they support.

"The Government is flying blind, having introduced these plans without any consultation with the workers they will affect. We need a full and proper impact assessment."