Trading under WTO rules...what it means if no deal.

[PeridotCricket]

Link to an excellent explanation as to what no deal Brexit means.

drive.google.com/file/d/1qOyv69Cn-5-OoQldwely301TWyj5heTZ/view

Or on twitter but less east to read twitter.com/uk_domain_names/status/1073221524545363973?s=21

Not pretty, is it?
3BlokesInAPub on YouTube is eye opening too.

People should think about food security and how this squares with No Deal. The UK operates in a just in time system for ambient food products.

However, you still get people who would would vote for a No Deal based on ideologies.

Food insecurity just reminds me of the Russian Revolution.

WTO has 164 member countries and we are already a member. It is nothing scary at all and we already trade with many countries on WTO terms including USA. Some companies who trade with both EU and non EU traders and say it takes about 15 seconds to complete an electronic form if non EU.

Some of the countries we trade with via EU have already offered us the same terms when we leave EU. Canada is on record as stating they can offer us a better deal than they give to EU.

We can still trade with EU just do so on WTO tarriff rates. At the moment we pay a high tarriff on clothing from EU and WTO rates is lower for clothing so clothing would become cheaper.

Does it really matter if we can't get non priority goods for a couple of months eg. exotic fruits as long as we can get everything we need. Medicines will be flown in if ports clogged up.

In the long run we should be able to join the Trans-Pacific Partnership Agreement to trade with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. This is a loose trade agreement which will not prevent us trading freely with other countries. Also trad with EU through WYO.

Scaremonger do not tell you the truth.

1. How can we fly medicines in if the planes are not able to enter U.K. airspace because the eu flight arrangement thing (forget what it’s called, sorry!!) no longer applies?

1. What about medicines that are extremely volatile, perishable or in need of refrigeration?

1. Trade deals take years to achieve. And also, I thought all our trade deals exist on the basis of us being an EU member state?

Please can you explain? Sorry for lack of technical terms!

You do know that WTO doesn't include lots of things? Such as services...
It's much more complicated than it's been presented.

Why on earth should we want to join a trans pacific partnership at the expense of belonging to the organisation with our near neighbours?

We can still trade with EU just do so on WTO tarriff rates. At the moment we pay a high tarriff on clothing from EU and WTO rates is lower for clothing so clothing would become cheaper

Rubbish, exporting to the EU will be harder and take more time, not my opinion but that of a CEO of a local SME exporting to the EU, they tried the USA market and found it very protectionist... now setting up a manufacturing facility in Holland....we lose jobs, they gain them great!

Prices are set on what the market can stand, if we are prepared to pay £25 for a shirt, then if tariffs drop, the price will still be £25... why would the importer/manufacturer pass on any saving to us? is there a law that says they should? lol!

I really don't get it. Leavers want us to leave the EU because of a lot of ifs and buts and maybes like Turkey joining the EU, or because there might one day be an EU army or ever closer union. None of which are on the cards. They the try to sell us a trans pacific partnership on a load of ifs buts and maybes - we might trade with Australia, we might trade with Chile, some of whom we trade with already.

Why do we want to trade with Canada and trans Pacific rather than eu...?

@caringcarer

Does any country in the world successfully trade on WTO terms with an economy of our size?

Are you trying to suggest it would be no hardship?

@caringcarer , your ignorance about WTO is terrifying.

Caring, two questions.

Do you understand what a customs union is?

What tariffs does the U.K. pay on clothes from the EU?

Any one of those 164 member countries can choose to block our tariff schedules. Several have already expressed concerns.

WTO doesn't cover services, on which the UK economy is built.

Clothing - as in your example - is already cheap. And even if what you said was true, what benefits will accrue to the nation of being able to buy crap trainers at say, £4 rather than £5?

Why would we trade with Peru (6500 miles away) when we can trade with France or Germany (Calais 20 miles from Dover)

You don't know what the hell you're talking about and people like you are going to ruin this country with your ignorant bluster. Idiot.

While it is true the UK is a member of the WTO in it's own right, it handed the current negotiation power to the EU so that rather than being a country of 60 Million it has a massively greater power of a bloc with 500 Million. The EU has established deals with many countries, particular other countries who have stuff the EU wants to buy and who have money for stuff the EU wants to sell. This is quite important as the other countries have very little we actually want and have no money to buy things we want to sell.
No deal sees the UK going onto the baseline WTO rates which are crippling to the UK economy in the short term (think 9 years or so as an average) and of course the basic rules mean that if we buy something at one tariff, we have to sell it at the same tariff until trade deals are rewritten. It is not a straight deal where the UK can talk to say New Zealand to buy lamb. Everyone else who buys or sells lamb to either the UK or New Zealand is involved in the discussions. This is why it can take many years to organise. New Zealand has a quota of Lamb it sells to the EU. Say 200 tons. In the current situation say 50 tons is allocated to the UK but that the UK will now want more, it will have to renegotiate with both the EU and NZ and any others that buy NZ lamb.
While caringcarer might have a few points the concept of 'just using WTO rules is infinitely more complicated and several of the countries the UK wants to trade with have already raised objections which can jam up negotiations for many years because the marketplace is such a tangled web and so many countries can block negotiations. Don't forger it is a separate negotiation for each category of goods, so a car with petrol engine of 1 Litre capacity is different to a 2 litre.

WTO has 164 member countries and we are already a member. It is nothing scary at all and we already trade with many countries on WTO terms including USA.

The EU (and by default the UK) has over 100 bilateral and multilateral agreements with the US.

We do not trade with the US on basic WTO terms only.

the basic rules mean that if we buy something at one tariff, we have to sell it at the same tariff until trade deals are rewritten.

This isn't true. If we import goods the importer pays import duty at the UK's published WTO rates for those goods. If someone based in an EU country buys our goods they pay import duty at the EU's published WTO rates.

It's intended that initially our WTO tariffs will mirror the EU's - so cars we import from the EU will have 10% charges imposed on them by HMRC. Cars which we export to the EU will have 10% charges imposed on them by the EU country's HMRC equivalent.

Theoretically we could drop our tariff on cars as low as we want but that doesn't affect what other countries will charge their importers on goods we export. Even if we dropped our tariff for cars to 0% importers from the EU would still have to pay the EU's 10% duty rate.

Since HMRCs computer system is only capable of processing around a third of what it will need to do, and although is being replaced by a new larger system it is not due to be in action for many months, and government and computers have a track record.....
Customs checking areas are not built yet, and there are insufficient inspectors available, all will need building/training.
Of course things will be worked out eventually, it is just the gap of a year or two to get the basics working and then another 7 or more years to get it working properly which is the problem.

We might have zero tariffs on everything (can't pick and choose under WTO) but other countries buy from us at at least WTO rates. Just have a little think about what cheap imports but no exports means to our economy.

We might have zero tariffs on everything (can't pick and choose under WTO)

What makes you think we can't pick and choose at what level we set tariffs for individual items? We can do exactly that - drop the tariff on cars from 10% to 0%, increase the tariff on diggers from 0% to 40%, anything we want really.

It's not consistent tariffs between different goods that we're bound to, it's charging the same amount for the same goods wherever they're imported from - unless there's a trade agreement in place.

The problem with mirroring the EU cars traiff is it isn't just cars, its all auto parts.

As a great many of the parts for UK manufactured cars come from the EU that means the tariff is applied when they cross the border. Increasing costs for UK based manufacturers, along side the increased admin costs and costs of delays.

Mass car manufacturing will not exist in the UK by 2025 if we leave on WTO terms.

What I meant was, if we let in , say, German car parts at zero tariffs we will have to let the same parts in from say, China at zero tariffs.

I see CaringShill has been sent in to try and convince the terminally stupid BeLeavers to keep shouting for No Deal...

Worth bearing in mind that WTO tariffs are ceiling levels, and that the UK/EU already trades tariff and quota free with the least developed countries around the world on EBA.

If you actually KNOW the situation with what trading with WTO rules really means you are either a complete nerd or are a lawyer working in that 'industry' in which case you probably wouldn't be on MN.
Suffice to say, NONE of it looks good from the UK point of view and whether the hit is 2% or 20% overall as an average, the UK is in deep poo.

Let's take that articale and put the opposite case..

For a start BMW will be paying your taxes for you. We import about 1 million cars per year from Germany ($23Bn 2016) and all of these will command 10% tariffs.... Which go straight to the treasury. So a cool couple of bn just from German cars.

And the BMWs made here will also command 10% tariffs, but this money goes to the EU rather than Germany.

In fact we already operate tariffs on behalf of the EU, £12 billion a year which doesn't show up in our contribution as the EU considers it their 'own resources'.

After brexit all tariffs from imports will go to the treasury, currently they fund the EU.

Frankly I'm a free trade advocate myself, and am suspicious of any Brit who claims to fear free trade, but that how it does and will work.