OFFICIAL-SENSITIVE Business Readiness Forum Thursday 6 February 2020
Tim imeli lines and Process • We're currently in a transition period which will last until the end of 2020. • During the transition period, the current rules on trade, travel, and business will continue to apply for the UK and EU. • The government will not extend the transition period. • Discussions with the EU on the structure and frequency of negotiations have begun. • We expect negotiations will begin in March.
Future Relatio ionship wit ith th the EU • The government wants to negotiate a relationship with the EU based on co-operation and free trade. • We are looking for an agreement like those the EU has previously struck with other countries, such as Canada. • The UK will leave the single market and the customs union at the end of this year. • A future agreement cannot include any regulatory alignment and the European Court of Justice cannot have any jurisdiction of over UK laws. • The UK will develop independent policies on areas including immigration, competition and subsidies, the environment, social policy, procurement and data protection.
Free Trade Agreement (F (FTA): A free trade agreement between the UK and EU should cover the following areas: • National Treatment and Market Access for Goods • Trade Remedies • Technical Barriers to Trade • Sanitary and Phytosanitary Measures • Customs and Trade Facilitation • Cross-Border Trade in Services and Investment • Temporary Entry for Business Purposes (Mode 4) • Regulatory Framework • Mutual Recognition of Professional Qualifications • Financial Services • Road Transport • Competition Policy, Subsidies, Environment and Climate, Labour, Tax Visit gov.uk/government/speeches/the-future-relationship-between-the-uk-and-the-eu for more information.
Support for businesses • Government will work with businesses to ensure that they are well prepared for the end of the transition period. • Visit gov.uk/transition for the latest updates. • Visit gov.uk/get-rules-tariffs-trade-with-uk to look up tariffs, taxes and rules to trade with the UK. • Visit gov.uk/check-duties-customs-exporting to check duties and customs procedures for exporting goods.
QUESTIONS? 6
UK Global Tariff Consultation 7
UKGT: Overview • DIT has launched consultation for 4-weeks starting 6 February – 5 March, seeking stakeholder views on the UK Global Tariff (UKGT) • The new UKGT will apply to goods imported into the UK on 1 January 2021 unless an exception such as a preferential arrangement, e.g. under a free trade agreement, or tariff suspension applies. In line with the NI protocol, special arrangements will apply to goods entering Northern Ireland. • UKGT will replace what is currently applied during the transition period, the EU’s Common External Tariff (CET) 8
UKGT: Most Favoured Nation Principle • An important principle for tariffs is the Most Favoured Nation (MFN) principle, sometimes referred to as ‘WTO Terms’; as set out in the General Agreement on Tariffs and Trade (GATT). It means that the same tariffs on imported goods must be applied to all WTO trading partners, unless an exception such as a preferential arrangement, e.g. under a free trade agreement, or tariff suspension applies. • The UK currently applies the EU Common External Tariff (CET) as it’s applied MFN tariff, and will continue to do so until the end of the transition period. 9
UKGT: Bound vs. Applied Tariffs • Bound tariffs are the maximum tariffs the UK can apply in line with our legal commitments at the World Trade Organisation (WTO). These tariffs are not applied at the border. Establishing a bound schedule is a WTO commitment, providing certainty and transparency to WTO members on what a country’s tariff schedule will be. • Applied tariff rates are the tariffs applied at the border, the UK is free to set whatever tariffs it wants, as long as they’re applied equally (in line with the Most Favoured Nation principle) and are below the bound rate • The public consultation is on the UK applied tariff, not bound. 10
UKGT: Policy Objectives In setting the tariff rates, the Government will give due regard to the principles set out in the Taxation (Cross-border Trade) Act 2018: • the interests of consumers in the UK, • the interests of producers in the UK of the goods concerned, • the desire to maintain and promote the external trade of the UK, • the desire to maintain and promote productivity in the UK, and • the extent to which the goods concerned are subject to competition. • HMG will introduce the UKGT once it has considered all the evidence, including the response to the consultation, in line with the Government’s stated strategic objectives, such as the delivery of the UK’s trade ambitions and FTA trade agenda, and to maintain the Government’s commitment to developing countries to reduce poverty through trade. The points for consideration set out in the consultation do not represent a final policy position. 11
UKGT: Proposed Amendments What are these proposed amendments? • There are three key areas that HMG is considering amending from the current MFN tariff the UK applies (i.e. the CET). These are: Simplifying and Tailoring the UK tariff schedule • Examples of simplification: • Removing Nuisance Tariffs (>2.5%) • Tariff Banding • Agricultural Tariff simplification Removing tariffs on key inputs to production • Removing tariffs on goods where a good is used as input by a process of production to create another product. An example of this is fabric used in the production of apparel. Removing tariffs where the UK has zero or limited domestic production 12 • Removing tariffs on goods where a good has zero or limited domestic UK production
UKGT: Elements of the Consultation General Direction of MFN Commodity Code Lookup Proposed Amendments Policy General, high level questions on Using a tariff lookup tool to find Specific questions relating to the direction of MFN Policy. specific commodities (this can be proposed tariff schedule amendments: between the HS4 and HS10 level) • and indicate whether they think the Simplification • applied tariff should be removed, Removal of tariffs on key inputs to reduced, or stay the same. production • Removal of tariffs where there is low to zero domestic production 13
UKGT: Preview of Questions for Public Consultation Tariff Look Up Tool: Example Question: 14
UKGT: Useful Information • Please fill in the Public Consultation: GOV.UK link to the Consultation survey on DIT Website. • If you have any process questions, please email: tariffconsultation@trade.gov.uk 15
OFFICIAL-SENSITIVE Business Readiness Forum Thursday 6 February 2020
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