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Publication of the United Kingdom's temporary tariff regime, applicable in the event of a no-deal Brexit scenario

15 March 2019
On 12 March, the House of Commons rejected Theresa May's Withdrawal Agreement and, subsequently voted against a no-deal Brexit and in favour of seeking for an extension of Article 50 of the Treaty on European Union ("TEU"). Although Members of Parliament ("MP"s) expressed a clear preference for excluding a no-deal scenario, for the moment it is still uncertain whether any deal between the United Kingdom (the "UK") and the European Union (the "EU") will be reached before exit date.

Pending the outcome, the UK's Government proceeded to the publication of its tariff regime applicable in the event of a no-deal scenario, which would remain in force for a temporary period of 12 months. It is important to highlight that the temporary package proposes a tariff free access for most of the products imported to the UK (reportedly 87% of total imports to the UK by value). 

In addition to the published tariff schedule, anti-dumping and countervailing duties will remain in place for 43 products selected, following the call for evidence, among the 109 EU trade defence measures currently in place. It is likely that a most-favoured-nation rate will apply to all other products for which the current EU trade defence measures are not extended; in the absence of hearing anything to the contrary this must be the expectation. 

The UK submitted last summer to the World Trade Organisation (the "WTO"), on a confidential basis, draft new national schedules of tariffs and equivalent charges on UK imports of goods. Today's publication of its tariff regime is a first preview of the UK's post-Brexit tariff regime. 

It is important for UK importers and UK producers to consult the temporary publicly available tariff policy (which can be consulted here) and to engage in exchanges with the UK Government as soon as possible should the temporary tariff rates be disadvantageous to them so that they influence decision-¬making before formal adoption. The UK Government will launch a formal consultation on a long-term tariff policy in the interim to get representation from impacted parties. There will also be a review mechanism built-in for businesses to offer their views on the impact of the policy.

Regarding the maintenance of existing trade defence measures, the UK Government announced that measures which will be maintained (a list of which may be found here) will be renewed for the UK on the basis of expedient "transition reviews".  

It remains unclear at this stage how these reviews will unfold and whether they will be similar to interim reviews under EU and WTO law, under which the authority may re-assess the injury factors of the UK industry post-Brexit, based on UK-specific market data, and/or the dumping practiced by foreign exporting producers.  We have a meeting with the UK's Trade Remedies Authority on 25 March, during which we will seek clarifications.  The TRA has declared its adherence to multilateralism under the WTO rules so one expects WTO-compatible actions.  Having said that, there is no precedent of a country leaving a customs union and transitioning existing trade defence measures, so it will be interesting to see how the TRA will design such reviews.

We have selected to display here the disclosed UK tariff policy for a few industries, which may be of interest to DWF LLP's clients. 

Please do not hesitate to contact us should you need more information or assistance in order to understand the impact of this temporary policy on businesses.

Should you require further information or assistance in order to understand the impact of this temporary policy on your clients' business, please reach out to our expert team. 

Further Reading