No tariffs quotas on movement of goods between the UK and the EU and the EU and the UK. So, in terms of businesses, what does that mean?
Well, no tariffs will be applied for goods to the EU and the supply the goods received from the EU, but there are certain requirements that must be met as we are going to talk about later in this webinar.
So, the newly signed EU-UK trade and co-operation agreement (TCA) is now in force, but does it at least remove all tariffs and quotas?
After all, Boris Johnson has been keen to highlight that the TCA will “enable UK goods to be sold without tariffs, without quotas in the EU market.”
So, Goods "originating" in the EU-UK free trade area will not be subject to customs duties. Goods which fail to satisfy the relevant preferential origin rules will be subject to normal WTO import tariffs (i.e., the Common Customs Tariff of the EU or the Global UK Tariff).
Or to put it another way, the EU-UK TCA only benefits goods that can legitimately claim to have been made in the EU or UK. These so-called rules of origin are not uncommon and can be found in near-every free trade agreement.
Autonomous duty suspensions are available to assist a domestic processing industry which does not have sufficient local access to certain components or intermediate materials, or customs procedures such as under inward processing regimes authorised by the local customs authorities.
Movements of goods (of whatever origin) solely for the purpose of repair will not be subject to customs duties.
That it is why it is very important for traders to assess the products of no EU / UK origin to evaluate if they can claim for preference under the specific tariff origin rulings for non-originating products or materials.
This means that if your business model involves importing goods from Taiwan into the UK, and then selling them to shops across the EU, then tariffs might now be levied twice. That would be when the goods enter the UK, and then again when they enter the EU. The clothes are Indonesian, not British or EU originating, after all.
And while it might be easy to demonstrate that British beef is from the UK, and therefore qualifies for tariff-free trade, things get more complicated when you are thinking of exporting something more complex. For example, a car which contains parts sourced from all over the world.
With any 3rd country imports it would be very important for any business to be aware of other Free Trade Agreements in place with the UK or the EU. As the original import may qualify under preference, but these must be assessed against the specific agreement rules of origin.
The EU and UK have attempted to reduce the “day-one” burden for traders somewhat: agreeing that for the first year, exporters will not be required to have all the evidence supporting their origin claims immediately to hand. But this does not mean the exporters do not still need to comply with the rules and ensure their products are eligible.
Remember that Free trade is rarely free, and for many companies, used to trading with ease across Europe, the new conditions and documentation requirements can come at quite a surprise. While most businesses will surely adapt to the new normal, and continue as before, others will turn their back on exporting all together.
While the TCA is an agreement between the UK and EU, the situation of Northern Ireland remains subject to the provisions in the Withdrawal Agreement. The Protocol on Northern Ireland effectively creates a customs and regulatory border between Great Britain and Northern Ireland. The TCA will not govern trade in goods between the EU and Northern Ireland and goods entering Northern Ireland from Great Britain will count as imports. There will be facilitations for goods moving between Great Britain and Northern Ireland. In terms of services, Northern Ireland will be subject to the UK's rules.
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