No-deal tariffs plan ‘offers no advantage to industry’

Government tariff plans in the event of a no-deal Brexit have come under fire from trade bodies.

The plans, announced by the Department for International Trade this morning (13 March), would bring in a zero tariff on 87% of total imports to the UK, including wheat.

The government said these tariffs would apply for up to 12 months, while a consultation and review on a permanent approach to tariffs is undertaken, adding they were designed to “minimise costs to business and consumers while protecting vulnerable industries”.

In the case of wheat imports, the no-deal plan essentially maintains the status quo as tariffs are not currently applied on the vast majority of imports.

However, the National Association of British and Irish Millers (Nabim) has criticised the plan for doing nothing to offset the impact of tariffs being applied on UK products that are exported.

And the Food & Drink Federation has declared it “disgraceful” that business are only seeing the tariff plan two weeks before Brexit.

Nabim has previously warned no-deal would be a ‘catastrophe’ for millers as exports would be subject to tariffs of around 50% of their value, and that similar tariffs could apply to bread and baked goods.

Describing the tariff plan as a “scorched earth policy”, Nabim director Alex Waugh today told British Baker: “On balance, this doesn’t create advantage for the UK milling and baking sectors and certainly doesn’t offset the disadvantage of significant tariffs to an export market.

“The proposal to go to zero (percent tariff) on a temporary basis means that, as far as wheat is concerned, UK millers will continue to have access to the wheat they buy now – but it increases the risk of subsidised imports of processed products coming into the UK.”

If you’ve already reduced your tariffs to zero, you haven’t got much to give away

He also warned the plan would undermine the UK’s negotiating capital when talking about trade agreements with anyone, including the European Union.

“We export to and import from EU – normally if they apply tariffs we’d do the same to them, but that opportunity won’t be created. If you’ve already reduced your tariffs to zero, you haven’t got much to give away – we are just going to be tariffed out of their market.

“For some businesses this would be a complete disaster; we are not expecting, in those circumstances, for much trade to be maintained.”

The FDF described the new tariff system as confusing and complex.

 “It includes some zero tariffs, some new tariffs and some quotas,” added FDF chairman Ian Wright. “Some foodstuffs qualify for partial protection and some not for any protection at all, with little logic to explain the difference.”

 “In a world where it is costly and complex to export finished goods to the EU, and costly and complex to import key ingredients, many food and drink manufacturers who trade with the EU will surely question whether the UK is the right place for them to be.”

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