UK tariffs should be cut in no-deal Brexit, trade minister says

12 February 2019 3:48pm

6  February 2019. By Matthew Holehouse.

The needs of UK consumers and producers should be balanced in the event of a no-deal Brexit, but tariffs should be cut where possible, Trade Secretary Liam Fox told lawmakers today.

Fox told lawmakers that the government will soon decide the schedule of tariffs to bring into effect in the event of the UK leaving the EU without a withdrawal deal. Officials are reviewing 15,000 tariff lines currently in force.

Fox said that a no-deal scenario would present the opportunity to lower import tariffs on goods not produced in the UK, but that the government would seek to protect agriculture and industries such as ceramics.

“There needs to be a balance between the impact on consumers and the impact on producers. The government is clear it needs to give protection where necessary without becoming protectionist,” he said.

Fox denied supporting a policy of “unilateral free trade,” in which the UK would abandon all tariffs. Doing so would expose UK businesses to “sudden competition,” he said, and erode the benefits to developing countries of their existing tariff-free access to the UK market.

“I’ve never advocated personally for full liberalization, for those very reasons,” Fox said.

“The government has not taken a decision yet on day-one tariffs in the event of no deal,” Fox told lawmakers. Under World Trade Organization rules, the UK would need to apply the same tariffs to goods from the EU as its other trading partners. This could result in inflationary pressures, he warned.

— Export deadline —

In a separate hearing of lawmakers this morning, Business Secretary Greg Clark said that many UK businesses needed to know by “mid-February” whether or not there would be a trade agreement.

Goods shipped from the UK to Japan and South Korea take six weeks by sea, and exporters will need to know what terms they could be placed on the market after March 29, he said.

“Will they have to pay tariffs? Will they be subject to rules-of-origin checks that will no longer be met? The last minute for important exporters is fast approaching over the next few days or weeks.”

“To those that say we can play this to the wire, we can leave it to March 28; I say ‘no, we’ve got to resolve it’.”