More than 70% of non-food retail imports originate beyond the EU. Consequently, when the UK leaves the EU, it will need its own rules to regulate this trade.
These rules need to be in place by March 29, 2019 – and they need to be created regardless of any Brexit deal that materialises from the political ether.
UK Trade and Customs Bills are the legislative vehicles that provide the necessary policy framework to govern non-EU trade.
These bills haven’t received anywhere near the same level of attention as the main Brexit negotiations. Why? In all probability, it’s because, in many areas, they’re designed simply to replicate existing trade regulations that Britain already applies as a member of the EU.
Ultimately, standard customs duty rates will stay the same, while the terms of existing EU trade deals will be replicated (subject to the agreement of those other countries).
However, there’s one important area where the UK might deviate from existing EU policy practice – ‘anti-dumping’.
Crucially, the Trade Bill proposes the establishment of a Trade Remedies Authority to replace the EU’s anti-dumping system.
“The EU has around 100 anti-dumping measures, including on bicycles, ceramics tiles and tableware, some DIY products (all from China) and, bizarrely, ironing boards from Ukraine”
Anti-dumping allows an importing country to levy extra customs duties on imports that are judged to have been ‘dumped’ on its market.
These duties are in addition to any standard duty rates that may apply.
Anti-dumping rates tend to be high – 30% to 40% is typical for EU measures, which are narrowly targeted on closely defined products from individual countries, and in some cases individual companies.
Currently, the EU has around 100 anti-dumping measures in place, including on bicycles, ceramics tiles and tableware, some DIY products (all from China) and, bizarrely, ironing boards from Ukraine.
Time for change
For the past 20 years or so, UK governments have been relatively sceptical about EU anti-dumping practices and have frequently opposed EU Commission proposals in individual cases – usually to little or no avail.
It argues that the additional anti-dumping levy is not in the wider economic interest, especially to UK consumers who end up paying higher prices; essentially, it protects inefficient EU producers.
Consequently, the creation of a national Trade Remedies Authority presents a unique opportunity for the Government to transcend traditional deficiencies embedded within the EU and thereby create a new framework that better accounts for the interests of retailers and consumers in anti-dumping cases.
Presumably, once it is established, the very first task of the new Trade Remedies Authority will be to assess which, if any, of the EU’s existing 100-plus anti-dumping measures it wishes the UK to adopt upon Brexit.
“The key question is this: can UK retailers rely on the Government to secure the best outcome for them?”
Theoretically, we should expect that some of them will be scrapped, given the Government’s resistance to past measures proposed by the EU Commission.
The key question is this: can UK retailers rely on the Government to secure the best outcome for them?
Considering that some UK manufacturers have already picked up their hatchets and are furiously lobbying Government for a trade remedies system that efficiently kicks in to deliver high levels of additional duties, it may well be prudent for retailers to join the fight.
This would help work towards securing a less draconian system that rids the UK of parasitic EU measures that would otherwise bridle their hopes.