Brexit – update to no-deal scenario
10 January, 2019
With the impending departure of the United Kingdom (UK) from the European Union (EU) on 29th March 2019, it is essential we are as prepared as possible.
In a no-deal scenario, the UK will fall back onto World Trade Organisation (WTO) tariffs.
The UK has taken the current EU WTO tariff schedule and, essentially, copied and pasted them as the fallback position for the UK. Although presented to the WTO, they will not be live until the UK exits the EU. Even if any WTO member objects, the tariffs will still be valid while the WTO members ratify the schedule .
With regards to imports from countries outside the EU, nothing should change. Those countries will still pay the tariffs they paid when we were part of the EU, unless the UK Government enters negotiations with supplying countries and creates separate Free Trade Agreements (FTAs).
The major change will be with our dealings with the remaining EU countries.
On 29th March 2019, the EU will become a third country and any imports from the EU will be subject to the third country duty that the UK government have set (current third country rates are available from the UK Gov link above) .
In the event of a no-deal Brexit tariffs will be based on the WTO’s “Most Favoured Nation” principle.
The UK Government has produced an overview of what those rates may be : (Possible WTO MFN Tariffs)
With regards to quotas, as part of the EU, any quotas are negotiated by the EU and split proportionately between EU members.
In a no-deal scenario, the UK may agree to keep those quotas we currently have, irrespective of what the EU does.
Current EU quotas can be found here: Current EU quotas
This is obviously a period of uncertainty, but we can be as prepared as much as possible for any scenario.
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These texts were prepared in good faith, but should be verified prior to use, as circumstances can differ.