Trade Deals

Do you want to know what the British proposal is for handling customs after Brexit? Alright then here you go, it’s very simple really…..

If Britain imports something from outside the EU-27 and then that product is shipped into the EU-27 then the British government collects the EU tariff and pays it on to the EU once the goods have been exported onwards.

Say, for example, we import a Harley Davidson motorcycle valued at £10,000 into Britain and the EU has a 10% tariff then if that bike is then exported into an EU-27 country then we would pay the EU £1,000.

Let’s look at another example. Say we import 20 tons of beef from Argentina (at £1,000 per ton with a 10% EU tariff) and two tons are shipped into the EU-27 we would then pass on the tariff of £200 on the two tons.

See I told you it’d be easy.  Oh but wait…. what if we use ten tons of that beef as materials for making beef curry and then sell on that curry as a ready meal into the EU-27? We would have to calculate the proportion of the meal that matches the beef tariff from Argentina.

Oh and if we are importing vegetables in that meal from Asia then we’d have to look at the tariff on each ingredient and then calculate how much we owe the EU-27.

What about car parts? Say we export a car into the EU built by Nissan in Sunderland? Valued at £20,000 export price we’d have to identify the value of specific parts that came from the EU (with a tariff), identify what parts came from outside the EU (with different tariffs) and then when it’s exported into the EU deduct the tariffs on the parts from the EU and pass on the tariffs we collected on non-EU parts.

Getting more complicated now eh? Bear in mind that a car has 30,000 parts! We’d have to do this for all 4,500 plus product nomenclature (product groups) that we trade with the EU.  Bear in mind just one product group like steel plate has over 3,200 different grades of steel and you can begin to see the size of the complexity – and THIS my friends is the top suggestion that Theresa May is still trying to get all her Cabinet and party to agree on from the Body Bag Summit at Chequers, despite the fact that it’s already been ruled out by the EU as completely unrealistic and unworkable. And they’ve categorically stated that the EU will not allow a third country to collect tariffs and duty on its behalf. If there was a dispute then where would Britain as a third country go for resolution outside the EU?  The incompetence of this administration is simply astounding. It’s almost as if they don’t know what they are doing!