Brexit discussion thread XIII (Please read OP before posting)

Hurrache

Very simply tariffs are basically financial loadings on goods in order to protect domestic markets and goods, duty is tariffs/tax on goods no matter where they're produced.

fly_agaric

trellheim wrote: »

What is the difference between tariff and duty ? I thought the Brexit deal was tariff and quota free ; or is it a rules of origin thing ?

(If I understand correctly) the tariff level on the goods is what results in the Customs duty cost to import them. However "duty" on its own is a vague term.

Could refer to an Excise duty (special taxes that govt. put on some goods - cigarettes, alcohol, fuel oils and sugar [I think] paid at the head of the chain by importer/producer).

trellheim

yes it all seems to blend into one another. My sole concern here is that the Brexit deal specifically said tariff free so why are duties being levied ?

Sam Russell

trellheim wrote: »

yes it all seems to blend into one another. My sole concern here is that the Brexit deal specifically said tariff free so why are duties being levied ?

Well, it is only tariff free for most goods. Tariffs will apply to goods originating outside the EU or the UK or where insufficient content originates within the EU or UK. It is not clear how many, or which, goods will bear tariffs.

It is a mess.

fly_agaric

trellheim wrote: »

yes it all seems to blend into one another. My sole concern here is that the Brexit deal specifically said tariff free so why are duties being levied ?

I'm no expert and only have read what has been reported about this agreement in the media etc. If it is not actually UK goods, I think there could be tariffs + a Customs duty in some cases. So something they import from US say, put it in another box and then try to export into the EU. What the actual detailed rules are around all that in the agreement and how they will play out in real life are outside the limits of my small amount of knowledge.

Edit: regardless of the absence or presence of Customs duty, there are Customs procedures, paperwork, checks etc because the goods are "imports" (UK to EU) now (where they were not before 1/1/21).

paul71

Hurrache wrote: »

Very simply tariffs are basically financial loadings on goods in order to protect domestic markets and goods, duty is tariffs/tax on goods no matter where they're produced.

Exactly, an excise duty is applied to Alcohol on point of entry if imported (UK beer, French wine) or on the manufacturer if brewed in Ireland.

Same thing when we used to grow tobacco here up to the 1950s.

paul71

trellheim wrote: »

yes it all seems to blend into one another. My sole concern here is that the Brexit deal specifically said tariff free so why are duties being levied ?

Because excise duries are not tariffs as explained above and because the EU (or any other country) cannot give a free hand to businesses in the UK to import goods from other 3rd countries and re-export them without tariffs and undermining the customs union.

tubercolossus

paul71 wrote: »

Exactly, an excise duty is applied to Alcohol on point of entry if imported (UK beer, French wine) or on the manufacturer if brewed in Ireland.

Whereas a tariff would only be imposed on the imported product.

Capt'n Midnight

Roger White arrived in France at 2.30pm on Tuesday with a truckload of hard cheese from Somerset.

“I think they are picking on the English trucks maybe,” he said, as there was nothing wrong with the cheese. “Just missing paperwork.” Until it arrived, he would not be free to go.

There are no tariffs and no quotas. The only difference compared to last week is goods now need proper paperwork (and some inspections) and 10% of loads didn't have it.

French drivers are also stuck in the opposite direction.

“Brexit, for us, it’s not very good,” said Brogniart.

Another French driver, Alexandre Tronet, joins the conversation. “This is what you wanted. You wanted Brexit,” he said.

“I got here at 6am,” he added, putting his waiting time so far at six and a half hours. Again he has to wait until the freight owner sends over the correct customs paperwork to authorities stationed at the Eurotunnel border post.

a truckload of hard cheese - Oh I'm still laughing at that.

sondagefaux

Capt'n Midnight wrote: »

Roger White arrived in France at 2.30pm on Tuesday with a truckload of hard cheese from Somerset.

There are no tariffs and no quotas. The only difference compared to last week is goods now need proper paperwork (and some inspections) and 10% of loads didn't have it.

French drivers are also stuck in the opposite direction.



a truckload of hard cheese - Oh I'm still laughing at that.

"Just missing paperwork".

Oh dear, someone hasn't heard of Export Health Certificates..

sondagefaux

Sam Russell wrote: »

Well, it is only tariff free for most goods. Tariffs will apply to goods originating outside the EU or the UK or where insufficient content originates within the EU or UK. It is not clear how many, or which, goods will bear tariffs.

It is a mess.

It is clear. It's set out in the trade agreement. The fact that many UK businesses don't have a fecking clue doesn't make the rules unclear.

sondagefaux

UK allows 'emergency' use of bee-killing pesticides that are banned in the EU.

https://www.independent.co.uk/news/uk/home-news/bees-kill-pesticide-insect-sugar-neonic-b1784693.html

View

sondagefaux wrote: »

It is clear. It's set out in the trade agreement. The fact that many UK businesses don't have a fecking clue doesn't make the rules unclear.

In fairness, the trade agreement was only published after most people had “left the office” in order to enjoy Christmas. They weren’t going to ruin their holidays just because Johnson et al insisted on delaying everything to the last minute.

road_high

Late to the conversation here but The “rules of origin” caveat seems to be causing a lot of problems now for U.K. traders and exporters.
The U.K. traditionally has been very much hub for distribution and retail rather than a country that makes stuff from scratch. Kind of a giant warehouse on the edge of Europe.
Take the simple example of sweets made in the eu, exported to U.K. and then redistributed to Ireland- https://www.google.ie/amp/s/www.irishtimes.com/news/ireland/irish-news/percy-pigs-become-latest-brexit-victim-as-retailer-m-s-warns-price-may-rise-1.4453462%3fmode=amp

Kind of mad this wasn’t considered until now- granted the deal was last second but stuff like this is fundamental I’d have thought. Or maybe it was and U.K. govt considered it a price worth paying to get a deal? I can see it causing major difficulties- might it send the U.K. back to the negotiating table to try sort? U.K. companies sound completely unprepared for it. If it stays as is these companies will need a more direct presence here (still possible price rises for consumers) to import directly

fash

road_high wrote: »

Kind of mad this wasn’t considered until now- granted the deal was last second but stuff like this is fundamental I’d have thought. Or maybe it was and U.K. govt considered it a price worth paying to get a deal? I can see it causing major difficulties- might it send the U.K. back to the negotiating table to try sort? U.K. companies sound completely unprepared for it. If it stays as is these companies will need a more direct presence here (still possible price rises for consumers) to import directly

It was considered and was considered a price worth paying - since the only way it could have been avoided would be if the UK remained in a customs Union with the EU - which they didn't want.
Understand: the rules of origin issue is the following:
For a given product, Country A has tariffs of 20% on country C imports.
Country A enters a deal with country B- 0% tariffs.
Country B then gets a deal with country C at 0% - and starts allowing the product pour through at 0% tariff - undermining country A's tariff wall.

The only solution is a customs Union: country A&B have a common external tariff.

peter kern

wrote: »

It was considered and was considered a price worth paying - since the only way it could have been avoided would be if the UK remained in a customs Union with the EU - which they didn't want.
Understand: the rules of origin issue is the following:
For a given product, Country A has tariffs of 20% on country C imports.
Country A enters a deal with country B- 0% tariffs.
Country B then gets a deal with country C at 0% - and starts allowing the product pour through at 0% tariff - undermining country A's tariff wall.

The only solution is a customs Union: country A&B have a common external tariff.

but in this case high road mentions it seems an eu product goes to uk and then tariffs applies when it goes back to eu. so there is no tariff country involved.

Under the agreement, if more than 40% of the pre-finished value of a UK firm’s product was not British, it would attract tariffs.

this makes total sense for products from outside the eu as you mentioned, but to me it makes little sense with a product made in the eu, especially if the export land is NI or Ireland it only seems to increase cost for this island or will result in less choice .

murphaph

Is the M&S guy actually correct?

I thought the rules of origin also zero rated items made in the EU but sold from the UK to the EU, like these sweets.

Perhaps items that are just imported and re-exported are treated differently to items incorporated into other manufactured items (cars being the classic example)?

Can somebody clarify?

rock22

peter kern wrote: »

but in this case high road mentions it seems an eu product goes to uk and then tariffs applies when it goes back to eu. so there is no tariff country involved.

Under the agreement, if more than 40% of the pre-finished value of a UK firm’s product was not British, it would attract tariffs.

this makes total sense for products from outside the eu as you mentioned, but to me it makes little sense with a product made in the eu, especially if the export land is NI or Ireland it only seems to increase cost for this island or will result in less choice .

It might be that those sweets were made with ingredients sourced from outside the EU.
In any event, it shows that importing goods into the UK and then exporting them to Ireland is no longer a viable model as the customer ends up paying a lot more. But as end users/customer, many of us have little say in how the product arrives here. It needs EU or government action to ensure the final customer is not hit with price increases - and that's not going to hapen . One legacy of UK membership of EU is an absolute deference to 'market economics'.

fash

peter kern wrote: »

but in this case high road mentions it seems an eu product goes to uk and then tariffs applies when it goes back to eu. so there is no tariff country involved.

Under the agreement, if more than 40% of the pre-finished value of a UK firm’s product was not British, it would attract tariffs.

this makes total sense for products from outside the eu as you mentioned, but to me it makes little sense with a product made in the eu, especially if the export land is NI or Ireland it only seems to increase cost for this island or will result in less choice .

I'm not sure of the exact details agreed in the various industries. Usually the "must contain minimum (e.g.) 60% by value content" includes value added by either parties to the treaty.
However there can be reasons why you don't want to allow the other side to simply "finish off your work and sell it on" - if you want to take back that "finish off" industry.

Nody

peter kern wrote: »

but in this case high road mentions it seems an eu product goes to uk and then tariffs applies when it goes back to eu. so there is no tariff country involved.

Under the agreement, if more than 40% of the pre-finished value of a UK firm’s product was not British, it would attract tariffs.

this makes total sense for products from outside the eu as you mentioned, but to me it makes little sense with a product made in the eu, especially if the export land is NI or Ireland it only seems to increase cost for this island or will result in less choice .

It makes total sense period; this is standard set up for any third party country for a FTA. That UK companies are to lazy to actually add 60% value to a product is not an EU's problem; that's UK's problem. If UK companies wishes to fix that they have two option; either add more value, or the more common approach, relocate the whole thing into an EU country instead. The second option is what many companies are now doing because while it was easy to do such trade chains while in EU it will no longer make sense and the low value (by definition) step in UK is then simply removed. Let me give you an example outside of EU on how this plays out.

We produced the raw product materials in Russia in one of our factories, exported it to Poland to be made into the final product. Tariffs paid for export from Russia to Poland. From Poland we shipped the final product to Switzerland because they owned the distribution channel it was suppose to go into and their warehouse was in Switzerland. Tariffs paid to export from Poland to Switzerland. Switzerland then send the product to Belgium to be packaged into a gift basket kind of deal with other products we sell. Tariffs paid to export Switzerland to Belgium. Gift basket sent back to Swiz warehouse. Tariffs paid to export Belgium to Switzerland. In the end the truck cost about 100k USD in tariffs making the whole supply chain impossible for obvious reasons but the procurement people who planned it and thought it would be a great idea did not know that when they sent the first truck (and we only found out about it when we got the invoices for the first truck and could ask Procurement where they wanted the cost charged to).

What UK is now experiencing is not something new; it's standard. The only time you get to export it back tariff free is if you ship the same goods type and can show your export volume vs. import volume from same destination basically. But why would you ship back exactly the same product in the first place? Often there's been some kind of work done to it and that will change it into a new product category and hello tariffs.

road_high

There’s really no need for stuff produced in the EU to be going to the U.K. and then to be resold back into the eu. I’m sure it’s done for streamlining purposes and having one centralised distribution centre but falls foul completely if the reality (that the U.K. voted for and wanted!)

schmoo2k

road_high wrote: »

There’s really no need for stuff produced in the EU to be going to the U.K. and then to be resold back into the eu. I’m sure it’s done for streamlining purposes and having one centralised distribution centre but falls foul completely if the reality (that the U.K. voted for and wanted!)

Small electrics come to mind, swap out power supply to UK compatible one and then sold onto UK / Ireland

FrancieBrady

road_high wrote: »

There’s really no need for stuff produced in the EU to be going to the U.K. and then to be resold back into the eu. I’m sure it’s done for streamlining purposes and having one centralised distribution centre but falls foul completely if the reality (that the U.K. voted for and wanted!)

I presume it is the law of unintended consequences and these 'hubs' will be another casualty in the UK?

Sam Russell

road_high wrote: »

There’s really no need for stuff produced in the EU to be going to the U.K. and then to be resold back into the eu. I’m sure it’s done for streamlining purposes and having one centralised distribution centre but falls foul completely if the reality (that the U.K. voted for and wanted!)

My understanding (which might be wrong) is that sweets made in the EU are sent in bulk to the UK to be packaged for sale in UK and Ireland. The process of packaging means they are no longer the same product and now attract tariffs.

I am surprised that a 'zero tariff, zero quota' deal ends up like this, but there you go.

peter kern

fash wrote: »

I'm not sure of the exact details agreed in the various industries. Usually the "must contain minimum (e.g.) 60% by value content" includes value added by either parties to the treaty.
However there can be reasons why you don't want to allow the other side to simply "finish off your work and sell it on" - if you want to take back that "finish off" industry.

and again i guess i would agree with you if it does not involve this island
in a small market like here it makes no sense or at least i still cant see it .
and i guess the most likely finishng touch in this product is packaging it into a branded m s plastic bag. and a potential result is that M S finds now a british producer to the cost of the german factory . or ships directly to ireland and then passes on the extra cost , so again i cant the the benefit of the eu
and i dont think MS customers and staff would see it as an advantage if dunnes stores takes over MS.

Akrasia

PokeHerKing wrote: »

Let's not go down the road of believing that the EU or EU states are above protectionism or nationalism. We are all humans.

Brexit can be retarded without needing to make out the EU is perfect.

The EU will engage in protectionism when it is in the interest of the EU member states subject to abiding by our international trade treaties.

The UK want to engage in protectionism, but this may lock them out of trading arrangements with the EU who will now trade with a partner who want to build in a competitive advantage for themselves.

The UK could, and did benefit from EU protectionism when it was in the EU, now it has left, so we can make all the Scotch Whisky and specialist UK cheeses that we like.

Sam Russell

Akrasia wrote: »

The EU will engage in protectionism when it is in the interest of the EU member states subject to abiding by our international trade treaties.

The UK want to engage in protectionism, but this may lock them out of trading arrangements with the EU who will now trade with a partner who want to build in a competitive advantage for themselves.

The UK could, and did benefit from EU protectionism when it was in the EU, now it has left, so we can make all the Scotch Whisky and specialist UK cheeses that we like.

I think it is more likely that we import 'Scotch' whisky from India or some such place and sell it on. [Actually, it is a bad example as we make plenty of Irish Whiskey so why sell a lesser product!]

We sell Cheddar cheese that has no relationship to the Cheddar Gorge, so that might be an area where we could sell Irish Stilton, or Irish Red Leicester.

peter kern

Thomasirl123 wrote: »

https://www.google.com/amp/s/amp.independent.ie/news/eu-says-it-has-secured-nearly-half-of-pfizers-2021-global-output-of-covid-19-vaccines-39946643.html

Fact is the EU have ordered 600 million doses!

the question was , does the uk with hard nationalism slow down the vaccination process , since somebody made the comment that uk nationalist risk lives by waiting for the uk vaccine .
then the point was raised, was the eu under pressure by france to put nat interest ahead of saving lives?
which it denies and there is no hard evidence.

but if we look at the stats until now the uk has outperformed every eu country.
https://ourworldindata.org/covid-vaccinations.

ancapailldorcha

peter kern wrote: »

the question was , does the uk with hard nationalism slow down the vaccination process , since somebody made the comment that uk nationalist risk lives by waiting for the uk vaccine .
then the point was raised, was the eu under pressure by france to put nat interest ahead of saving lives?
which it denies and there is no hard evidence.

but if we look at the stats until now the uk has outperformed every eu country.
https://ourworldindata.org/covid-vaccinations.

Mod: There's a thread about the UK's response to covid in the Coronavirus forum. Please take any further discussion of covid there. Thanks.

lawred2

road_high wrote: »

There’s really no need for stuff produced in the EU to be going to the U.K. and then to be resold back into the eu. I’m sure it’s done for streamlining purposes and having one centralised distribution centre but falls foul completely if the reality (that the U.K. voted for and wanted!)

This will all change. It takes experiencing it for real before people act.

But it won't be long before the UK is cut out of most distribution channels save for those that serve their own domestic consumption.