World Trade Organisation Rules

Alan_Brown

Hi, I was wondering if some of the wise heads on here could answer a question I've been pondering. If the UK/EU negotiations for access to the EU market go badly,or stall we will have to rely on the WTO standard trading tariffs.

I saw a report ages ago that said the tariff payments for our total exports to the EU are less than the amount we currently pay into the EU (I believe the BBC fact check had it at 19.24 billion net, per annum). I've no idea whether this is the case, but was wondering about the imports from the EU into the UK.

The UK currently has a large trading deficit with the EU, so while we would have to pay tariffs to export to them, they would obviously have to pay a lot more to export to ours. Does anyone know if the UK government would receive the revenue from these import tariffs?

If so, then would the money saved from not paying EU membership, coupled with the revenue from import tariffs, more than cover the export tariffs?

Also, is there an easy way for exporters to get their export duties refunded from this 'pot'?

It seems to me that if the UK can somehow eliminate the costs to our companies of exporting to the EU, then we would gain an advantage over our EU competitors, well so long as we have a trade deficit with Europe, I guess.

CLAPTON

Alan_Brown wrote: »

Hi, I was wondering if some of the wise heads on here could answer a question I've been pondering. If the UK/EU negotiations for access to the EU market go badly,or stall we will have to rely on the WTO standard trading tariffs.

I saw a report ages ago that said the tariff payments for our total exports to the EU are less than the amount we currently pay into the EU (I believe the BBC fact check had it at 19.24 billion net, per annum). I've no idea whether this is the case, but was wondering about the imports from the EU into the UK.

The UK currently has a large trading deficit with the EU, so while we would have to pay tariffs to export to them, they would obviously have to pay a lot more to export to ours. Does anyone know if the UK government would receive the revenue from these import tariffs?

If so, then would the money saved from not paying EU membership, coupled with the revenue from import tariffs, more than cover the export tariffs?

Also, is there an easy way for exporters to get their export duties refunded from this 'pot'?

It seems to me that if the UK can somehow eliminate the costs to our companies of exporting to the EU, then we would gain an advantage over our EU competitors, well so long as we have a trade deficit with Europe, I guess.

tariffs are imposed by the importing country as a tax.
the effect is that if we export to a country (lets say Germany ) then the germans will impose an import tax on our goods.
we don't pay anything but the german importer or consumer pays more.
In practice, we as exporters may have to reduce the price of our products if we wish to sell the same level of goods.
Of course, if the pound falls in value this may fully compensate for the import tax.

obviously the reverse applies to imports

Generali

Alan_Brown wrote: »

Hi, I was wondering if some of the wise heads on here could answer a question I've been pondering. If the UK/EU negotiations for access to the EU market go badly,or stall we will have to rely on the WTO standard trading tariffs.

I saw a report ages ago that said the tariff payments for our total exports to the EU are less than the amount we currently pay into the EU (I believe the BBC fact check had it at 19.24 billion net, per annum). I've no idea whether this is the case, but was wondering about the imports from the EU into the UK.

The UK currently has a large trading deficit with the EU, so while we would have to pay tariffs to export to them, they would obviously have to pay a lot more to export to ours. Does anyone know if the UK government would receive the revenue from these import tariffs?

If so, then would the money saved from not paying EU membership, coupled with the revenue from import tariffs, more than cover the export tariffs?

Also, is there an easy way for exporters to get their export duties refunded from this 'pot'?

It seems to me that if the UK can somehow eliminate the costs to our companies of exporting to the EU, then we would gain an advantage over our EU competitors, well so long as we have a trade deficit with Europe, I guess.

The EU doesn't respect WTO trading rules, nor do most countries.

Alan_Brown

I found this on the BBC: http://www.bbc.co.uk/news/business-36470809

"Britain could have to impose £9bn worth of additional tariffs on imports. Exporters could face an extra £5bn of tariffs on their sales abroad."

I'm not sure if these figures are accurate, or whether I'm interpreting them correctly, but are they saying that the UK would gain a net £4bn between export and import duties?

I'm no expert on international trade, so I'm hoping that someone on here has a better idea of whether this theory is right, or totally wrong.

Alan_Brown

Generali wrote: »

The EU doesn't respect WTO trading rules.

Do you have links to this? I had a quick google but I'm struggling to find a definitive statement either way.

Rinoa

Generali wrote: »

The EU doesn't respect WTO trading rules, nor do most countries.

Would you care to back that statement up with facts.

Rinoa

Alan_Brown wrote: »

I found this on the BBC: http://www.bbc.co.uk/news/business-36470809

"Britain could have to impose £9bn worth of additional tariffs on imports. Exporters could face an extra £5bn of tariffs on their sales abroad."

I'm not sure if these figures are accurate, or whether I'm interpreting them correctly, but are they saying that the UK would gain a net £4bn between export and import duties?

I'm no expert on international trade, so I'm hoping that someone on here has a better idea of whether this theory is right, or totally wrong.

That's how I've always understood it. Most of our exports are to countries outside the EU so I don't see why it wouldn't work with EU countries after Brexit.

Alan_Brown

Generali wrote: »

The EU doesn't respect WTO trading rules, nor do most countries.

I found this statement:

"The EU is committed to multilateralism and has acknowledged the fundamental importance of WTO in the international trade system.

Being the world's major global player in the international trade, the EU supports the work of the WTO on multilateral rule-making, trade liberalisation and sustainable development."

It doesn't seem to bear out your statement (quite the opposite), but I'll keep on searching.

EDIT: I found this with further searching:

"A fundamental, if rather obvious point to emphasise is that whatever controversy there may be over the exact legal status of WTO law within the EC legal order, there is no question about the binding nature of the former. The EC, as a signatory and party along with its Member States, to the WTO, clearly accepts that the obligations contained in the WTO agreements are legally binding upon it. How those obligations are to be given effect may be a matter of dispute, but their binding nature is not, and it is primarily the political institutions which must give effect to WTO law. If an EC action or measure is found to conflict with the provisions of the GATT, for example, it is up to the Commission and the other institutions to find a solution which is compliant."

Aliliva

Alan_Brown wrote: »

I found this on the BBC: http://www.bbc.co.uk/news/business-36470809

"Britain could have to impose £9bn worth of additional tariffs on imports. Exporters could face an extra £5bn of tariffs on their sales abroad."

Import taxes are imposed on the product when it arrives in the country where it'll be sold. Basically, it's like an additional VAT on the product, so it's totally paid by the final consumer. This means that UK consumers (us) will have to pay 9bn an year more than we do today for our shopping, while EU consumers will have to pay 5bn a year more than they do right now.
So, we won't be 4bn better off, quite the contrary, we'll have to pay 4bn more a year :eek:

Alan_Brown

Hopefully generali will be back soon with some information.

In the meantime, if the WTO rules do apply, does the rest of the theory play out? Would having a defecit with the EU allow us to compensate our exporters to the EU with the income from EU import tariff? (plus maybe some of the Eu membership money we would be saving)?

Alan_Brown

Aliliva wrote: »

Import taxes are imposed on the product when it arrives in the country where it'll be sold. Basically, it's like an additional VAT on the product, so it's totally paid by the final consumer. This means that UK consumers (us) will have to pay 9bn an year more than we do today for our shopping, while EU consumers will have to pay 5bn a year more than they do right now.
So, we won't be 4bn better off, quite the contrary, we'll have to pay 4bn more a year :eek:

Who gets the tax though? VAT goes to the government and companies registered for VAT can claim it back. Can this not happen with import tariffs?