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This is an exaggeration as have been and are so many claims coming out of Tory gov. It's not worth repeating.

Eurotrib has had the opportunity to review EU 2017 WTO portfolio. No EU third-country duties approach 50% much eless 20% or 15%. Eurotrib has had the opportunity to review EU BREXIT impact papers estimating 4% tariff which is line with EU favored nation ask. Currently, EU tariff on UK imports is 0. It will remain 0 until March '19 or March '21.

Any tariff greater than 0 is the number driving prospects of "permanent insanity or piracy" through the UK.

And Eurotrib has had the opportunity to review the EU-UK joint notice to WTO regarding quota divestment. EU is highly unlikely to short UK import quota in re-balancing EU27 WTO commitments, if only to support IE's small-holders' beef & dairy exports to UK, their largest trade partner. In the scheme of things, this business is marginal to EU internal and EU-UK trade balances.

IE's and UK's biggest losses are going to come from transnational banking and financial services. That's the way it is. The writing was on the wall from '12, when Draghi took on decimating eurozone bond rates and yield. "Austerity" finished the City, ironically. This is one reason why Barnier is so confident. UK has no leverage.

Pun intended.

Diversity is the key to economic and political evolution.

by Cat on Tue Jan 23rd, 2018 at 12:46:29 AM EST
For a detailed study of the impact of WTO tariff rates on EU/UK trade see here (pdf). There are different tariff rates on over 5,000 different product lines ranging from 0% to over 80%. Food and clothing attract the highest tariffs with meat c. 50%. The aggregate tariff on all Irish exports to UK is by far the highest in the EU (because of our heavy emphasis on food) and comes in at c. 18%. Trade in some product lines is expected to cease entirely because of the punitive nature of the tariff rates.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jan 23rd, 2018 at 01:02:56 AM EST
[ Parent ]
Overall the study estimates a 30% reduction in UK/Ireland trade on medium price elasticity assumptions. However the study assumes the UK remains within the customs Union and therefore assumes no non-tariff barriers to trade. With the UK also intent on leaving the Customs Union the actual impact on trade could be much higher.

Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jan 23rd, 2018 at 01:09:18 AM EST
[ Parent ]
You keep referring to that paper without x-reference to World Tariff Profiles 2017, EU BREXIT impact papers, or change in play to date. Why is that?

Section 3 describes the WTO tariff structure and presents implied tariffs by country and sector if these were applied to the current trade structure between the UK and each of the other EU member states
[...]
Our analysis is based on bilateral trade flows between the UK and each of the 27 other member states of the EU from the United Nations ComTrade data source for 2015.
[...]
without an agreed trade deal, the UK will not be able to apply different tariffs to trade from the
EU than it is willing to apply to all other countries.  

What's wrong with these assumptions besides category errors and the fact that the EU does not apply one rate/product line to all third-countries, because, well, bi-lateral trade agreements are in place?

archived: consider the source
condition for UK "transition" period
Joint letter from the EU and the UK Permanent Representatives to the WTO
World Tariff Profiles 2017
of which "data on bound, applied and preferential tariffs and import statistics are available in up to six digits of the Harmonized System (HS) codes" (Tariff Analysis Online )
EU Impact Studies of which The Impact and Consequences of Brexit for Northern Ireland

Diversity is the key to economic and political evolution.

by Cat on Tue Jan 23rd, 2018 at 02:10:16 AM EST
[ Parent ]
You keep referring to that paper without x-reference to World Tariff Profiles 2017, EU BREXIT impact papers, or change in play to date. Why is that?

What's wrong with these assumptions besides category errors and the fact that the EU does not apply one rate/product line to all third-countries, because, well, bi-lateral trade agreements are in place?

  1. The paper examines the impact of applying WTO tariff and quota's on existing levels and types of trade between UK and individual EU27 countries

  2. World Tariff Profiles 2017 do not apply to intra-EU trade and therefore doesn't include Ireland/UK trade

  3. The Brexit impact paper you reference makes no reference to tariff rates or impact on trade (beyond broad estimates of impact on GDP).

  4. What category errors are you referring to  - beyond the assumption of the UK remaining within the Customs Union - which I have already referenced?

  5. The whole point of the paper is to examine would would happen in the absence of a bi-lateral trade agreement between UK and EU27 - i.e. a no deal Brexit

  6. Why the dismissive tone?


Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jan 23rd, 2018 at 10:52:49 AM EST
[ Parent ]
WTO governance and commitments (tariff, quota) apply to EU bloc viz. third-country WTO members. UK-EU "no deal" cannot default to academic calculation, but de minimis range determined by WTO members' and based on WTO member historical trade balances. That is total UK share of total EU bloc is not tabula rasa, but comparable to EU bloc trade with and duties applied to third-country products' origins.

Completing divestment of total UK share from total EU bloc trade balance is an arithmetic exercise. It is the subject of the formal joint notice to WTO. Nominally this difference positions UK by "default" for preferential quota and tariff treatment by EU

Tariffs placed by the EU, at a Most Favoured Nation level of 3.2 per cent upon agricultural products exported from Northern Ireland, would have significant adverse effects, whilst average WTOlevel tariffs on agricultural imports into Northern Ireland would create inflationary pressures.

or WTO standards. EG. BEETS, CAPS, EU prerogatives. Let us remember for Sammy Wilson's sake, NI is the UK.

To the extent UK goods and services can be segregated from those originating in EU27 at every point in any supply chain by product code is the political exercise of Phase II settlement in which the UK has thus far, apparently refused to participate. Which is to say, Tory gov has deferred to EU authority at bi-lateral ("no deal") -> WTO-level specification. And I expect Tory gov to default to this defensive strategy with every other prospective trade partner.

In the esri paper, distribution of UK trade to each EU member --deranged from political, heterogenous human prerogatives as well as FX hurdles to investment and sales-- predicates a persistent, erroneous belief that UK is free to dictate bi-lateral trade arrangements with each member. This a silly, incongruous basis by which to project EU bloc relations to the UK.

Because EC tariff quota mediate members' third-country trade.

+50% is exaggeration, when delta 0 to 3.2% will do to dramatize the disadvantages conveyed by BREXIT. Withdrawal from a customs union.


Diversity is the key to economic and political evolution.

by Cat on Tue Jan 23rd, 2018 at 07:04:28 PM EST
[ Parent ]
I have argued on many occasions that the Brexiteers' breezy assumption that the UK can simply default to WTO tariffs and rules in the event of a no-deal Brexit is erroneous. For one thing, a no-deal Brexit implies leaving on bad terms without payment of the exit payment which the EU27 claims is due.  In that context the EU may not be disposed to offer the UK most favoured nation status.

In addition, there has been no agreement on a methodology for carving out UK share of current EU28 WTO trade quotas, and in that context, it cannot simply be assumed that proportionate (to what?) quotas will be granted to the UK. The Joint letter from the EU and the UK Permanent Representatives to the WTO is a statement of intent only, and implies a harmonious Brexit process and Treaty will be agreed.

Finally, the EU is actively engaged in negotiating bi-lateral trade deals with all its major trading partners to the point where trading by default WTO rules will apply only to a diminishing residual share of total EU external trade. The WTO is effectively a moribund organisation which has not been able to conclude a successful trade round in many years. There is nothing to prevent the EU27 withdrawing from the WTO and applying punitive tariffs to the UK if it deems the UK to have been in dereliction of payment of debts rightfully due.

Remember, a no deal Brexit implies leaving on very bad terms indeed, and the EU27 will be under no obligation to make life easy for the UK even if Ireland, in particular, is caught in the cross-fire. The one thing the EU cannot allow happen is for the UK to be seen to "have cake and eat it" outside of all the other obligations EU members have to observe. Other ways can be found to compensate Ireland and specific industries most effected.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Tue Jan 23rd, 2018 at 09:59:07 PM EST
[ Parent ]

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