'Hard' Brexit

[WTFH]

It's just that those cars will be more expensive for UK citizens to buy post-Brexit.

Because the EU will put an increased tariff on it.

Hang on, you're saying the EU will impose an increased tariff on goods exported from the EU to the UK?

Htf does that work?

posting rights on this level of thick should be revoked.

OPM, be careful what you wish for. Anyone who thinks the EU will put an Export tariff on their own goods is clearly on their own special level.

[meridian]

It’s not WTO tariffs per se, it the U.K. schedule of tariffs lodged with the WTO. A very fine distinction :-) but one which sets us up to trade under WTO rules.

There’s an excellent blog on trade that also discusses the finer points of WTO tariffs, schedules, quotes, MFN, etc here

https://tradebetablog.wordpress.com

Just to clarify why this distinction is meaningful.

Unless and until the U.K. can lodge their agreed schedules of tariffs and quotas with the WTO, we do not have any agreed tariffs or quotas. We can operate under WTO rules, but we don’t have an agreed schedule.

We are currently arguing with a substantial number of non-EU countries about what quotas they will accept, and it’s not looking likely that this will be resolved quickly.

Still, good to know that our Trade Minister is on it now.

[PurpleGorilla]

Just to clarify why this distinction is meaningful.

Unless and until the U.K. can lodge their agreed schedules of tariffs and quotas with the WTO, we do not have any agreed tariffs or quotas. We can operate under WTO rules, but we don’t have an agreed schedule.

We are currently arguing with a substantial number of non-EU countries about what quotas they will accept, and it’s not looking likely that this will be resolved quickly.

Still, good to know that our Trade Minister is on it now.

Because no one is going to want to trade with the 5th largest economy in the world...

[darmstadt]

Because no one is going to want to trade with the 5th largest economy in the world...

What California? Better stop using Google...

https://eu.usatoday.com/story/news/n...-uk/583508002/

[meridian]

'Hard' Brexit

Because no one is going to want to trade with the 5th largest economy in the world...

Where did anyone say that nobody would trade with us? That’s not the issue being discussed.

Northern Ireland is part of the U.K.. If there is no deal that meets acceptance with WTO provisions to prevent a breach of the MFN rules, then there should be a border.

Note: “should”, not “must”. The WTO does not stipulate that there must be a border. However, if there is not, and there is no other agreement that prevents MFN rules kicking in (eg a customs union), then other countries will have the ability to take the U.K. (and, presumably, the EU) to arbitration to force similar rules between the U.K. and their country.

So, for example, if chicken is allowed to cross the border from the EU to the U.K. (RoI to NI) without checks, then the USA may demand that their chicken is also allowed to cross into the U.K. without checks, whether we like it or not.

[meridian]

'Hard' Brexit

Because no one is going to want to trade with the 5th largest economy in the world...

And I’ve just realised I’ve blathered on about NI in the wrong thread.

The first sentence still stands - nobody is saying that nobody will trade with us.

However, until the U.K. lodges it’s schedules at the WTO we don’t have any agreed tariffs or quotas.

Take NZ lamb, for example. There is a certain tariff (x) up to a number of tonnes of lamb into the EU. That is the quota, and after that quota the tariff is (y). If the U.K. does not lodge a schedule with the WTO, then what is the legal tariff that the U.K. can charge NZ? Up to how much tonnage?

So, although I’m not saying that nobody will trade with us, unless the schedules are agreed and lodged then other countries will find it very difficult legally to trade and it will become very messy.

We can’t just roll over the EU schedules because they have different tariffs and quotas, we need our own. And having our own means negotiation with other countries, something we’ve not been that good at in the last two years.

[Cirrus]

other countries will find it very difficult legally to trade and it will become very messy..

You need to watch Donald Trump.

It will not be at all difficult to trade with us, presumably on the same basis we've been trading up to now. Someone might raise an issue with the WTO whereupon there will be months/years of shenanigans which may or may not lead to some fine or a threat of one. But really, who is going to make a huge fuss over a reasonable response to a difficult situation?

I don't support Brexit but too many people massively exaggerate the situation. As David Davis intimated, it won't exactly be pretty but we coped with World War 2 simply by being calm and carrying on.

[darmstadt]

Where did anyone say that nobody would trade with us? That’s not the issue being discussed.

Northern Ireland is part of the U.K.. If there is no deal that meets acceptance with WTO provisions to prevent a breach of the MFN rules, then there should be a border.

Note: “should”, not “must”. The WTO does not stipulate that there must be a border. However, if there is not, and there is no other agreement that prevents MFN rules kicking in (eg a customs union), then other countries will have the ability to take the U.K. (and, presumably, the EU) to arbitration to force similar rules between the U.K. and their country.

So, for example, if chicken is allowed to cross the border from the EU to the U.K. (RoI to NI) without checks, then the USA may demand that their chicken is also allowed to cross into the U.K. without checks, whether we like it or not.

Something like this then:

FACT 1: ARTICLE 10 of the European Union (Withdrawal) Act 2018 makes it illegal for the UK Government to authorise regulations which "create or facilitate border arrangements between Northern Ireland and the Republic of Ireland after exit day which feature physical infrastructure, including border posts, or checks and controls, that did not exist before exit day and are not in accordance with an agreement between the United Kingdom and the EU."
FACT 2: WTO rules require that all WTO members control goods coming into and going out of their territory, in order to calculate tariffs and quotas. In order to do that, each member must have customs checks at borders. That is what is meant by a 'hard border'. In order to trade under WTO rules, the UK must have a hard border without exception, including between the Republic of Ireland and Northern Ireland.

IMPLICATION: Fact 1 above makes it illegal for the UK to satisfy the requirements of Fact 2. In other words the UK has now made it illegal for itself to trade under WTO rules. Moreover it makes it impossible for the UK to negotiate any trade deal that would mitigate WTO tariffs

[meridian]

Something like this then:

FACT 1: ARTICLE 10 of the European Union (Withdrawal) Act 2018 makes it illegal for the UK Government to authorise regulations which "create or facilitate border arrangements between Northern Ireland and the Republic of Ireland after exit day which feature physical infrastructure, including border posts, or checks and controls, that did not exist before exit day and are not in accordance with an agreement between the United Kingdom and the EU."
FACT 2: WTO rules require that all WTO members control goods coming into and going out of their territory, in order to calculate tariffs and quotas. In order to do that, each member must have customs checks at borders. That is what is meant by a 'hard border'. In order to trade under WTO rules, the UK must have a hard border without exception, including between the Republic of Ireland and Northern Ireland.

IMPLICATION: Fact 1 above makes it illegal for the UK to satisfy the requirements of Fact 2. In other words the UK has now made it illegal for itself to trade under WTO rules. Moreover it makes it impossible for the UK to negotiate any trade deal that would mitigate WTO tariffs

I would dispute 2 as a “fact”. Can you cite the relevant GATT where it states that the rules require control of goods, and that there must be customs checks?

My understanding of reading it is that it is not the WTO’s function to state how a country controls it’s borders, but if a country does not do so then it leaves itself open to MFN

[meridian]

'Hard' Brexit

You need to watch Donald Trump.

It will not be at all difficult to trade with us, presumably on the same basis we've been trading up to now. Someone might raise an issue with the WTO whereupon there will be months/years of shenanigans which may or may not lead to some fine or a threat of one. But really, who is going to make a huge fuss over a reasonable response to a difficult situation?

I don't support Brexit but too many people massively exaggerate the situation. As David Davis intimated, it won't exactly be pretty but we coped with World War 2 simply by being calm and carrying on.

No, that’s the issue - we don’t currently have an agreed tariff or quota schedule to trade internationally on.

Trump can raise or lower tariffs, because they have a schedule that has tariffs on them. When he does this unilaterally (without agreement) it causes trade wars. The U.K. can unilaterally lodge a schedule with the WTO but none of it with any country is agreed, leaving us open to trade hostilities ourselves.

Granted, 90% of countries won’t care that much. But big exporters to the EU and the U.K. will. That means USA, China, NZ, Australia, etc.

Invoking WWII? Thousands died then, probably not the best example of “coping”. The ones that talk about it as glory days are the ones who never lived through it, the grandads that were actually there didn’t like to talk about it that much...