Trade tariffs explained by a nice guy on twitter but ought to have a blog instead

Excellent. Though not for the first or last time will I shout to people who want to give explanations longer than a few tweets that they should START A BLOODY BLOG ALREADY ! but apparently I'm the only one who thinks that.

Heck, for the sake of it, here's the whole thing in a sensible bloomin' format.



Morning my fine followers, fancy a 'Trade tariffs in laymans terms' thread for breakfast? alright then, here ya go...

“But Germany, France and Italy won’t stop buying things from the UK if we leave” say the Brexiteers, they NEED us, and they won’t put us into a tariff regime"... so says the Leave EU camp. It won’t be a choice, it’s not a case of the EU damaging their imports to be spiteful to a UK that just voted to leave the EU.

The fact is that there exists a document called the Treaty of the European Union and it sets out the very foundation of how the 28 member states work and cooperate together. It was part written by the UK and part drafted by UK lawyers. It was agreed by all Member States that the EU would create a ‘thing’ called the “EU Common External Tariff Regime” for countries outside the EU that wanted to to trade with EU businesses. Different tariffs are in place for different product types. Higher for products the EU doesn’t desperately need and lower for the things it does need desperately like energy for example – which explains why Norway get such a good deal as around half of Norway's exports to the EU are oil and gas.

When we tear up our membership card, Article 50 of the Treaty comes into force. It says that a country that notifies the EU we are leaving the club all our agreements terminate 24 months after notification. On 29/3/19 we are automatically under the external tariff regime that the UK helped to draft and fully signed up to. The ONLY way this could be changed is if the Treaty is changed. This requires the agreement of all remaining 27 countries. Many of whom have a referendum lock if there are any changes to the Treaty.

It just isn't feasibly possible to have all the necessary referendums and treaty change agreed by heads of state of 27 nations across Europe in the 2 year time limit.

Meanwhile we could continue to renegotiate the 4,500 plus different product groups that we trade with the EU to try and get lower tariffs on the things we buy and sell. This could take as much as a decade (or longer if other trade negotiations are any guide). The point is that the UK becoming a part of the EU Tariff Regime (which meets WTO terms) is automatic if we elect to Leave and there is nothing that Germany, France or Spain or even the UK can do about it.

Currently we enjoy unlimited trade with the largest trading bloc on the planet free from duties, tariffs or quota and preferential terms with a further 60 countries around the world outside the EU under our EU membership benefits. It’s also worth noting that of all the top ten economies in the world every single one of them with a population of less than one billion people is a member of a continental trade bloc like the EU. UK has just 0.065% of 1bn. Do we really think we are powerful enough to buck the trend of global trade and international economics? I think not. We are pretty good, but not that good.

https://twitter.com/JasonJHunter/status/1034344938593562624