Post-Brexit trade tariffs

Published: 17th Mar 2017

In brief

Claim

If we left the EU without an alternative trade deal in place then we’d still have a choice about whether to put tariffs on imports.

Conclusion

That’s correct. In general we’d have to apply the same tariffs to all our trading partners and keep them within limits agreed at the World Trade Organisation. It would be up to other countries, not us, to choose whether to charge tariffs on our exports.

“Would we need to apply tariffs on goods coming into this country if we were out of the [EU] customs union? No we would not – that would be a voluntary choice for us, there is no need for tariffs.”

Jacob Rees-Mogg MP, 16 March 2017

It’s correct that the UK would be able to choose what tariffs it put on imports from other countries, after it left the EU customs union.

The UK wouldn’t have a completely free hand to do this. It would have to apply the same rates to all other WTO members, except where it has a free trade agreement or is giving preferences to developing countries.

It would also have to keep those tariffs within limits agreed in the World Trade Organisation (WTO).

And we wouldn’t have a choice about what tariffs were put on our exports.

World Trade Organisation membership

Mr Rees-Mogg went some way to making the same point about exports when he added:

“We would be in a very strong position to retaliate if vicious tariffs were imposed on us.”

Whether or not we’d be in a “strong position” to respond is a more complicated and speculative question than we can confirm or deny in a factcheck.

We can say that any tariffs would have to conform with limits agreed in the World Trade Organisation, and also that other countries wouldn’t be able to pick on the UK and impose specific tariffs on UK-made goods or services (or vice versa).

The UK will still be a member of the WTO after it leaves the EU (there will be negotiations about the details of the UK’s membership status outside the EU, although there’s some debate about how difficult these will be). Members of the WTO have to put the same tariffs on every trading partner worldwide, unless they are part of a customs union or have some kind of free trade agreement.

The EU customs union is one such agreement. That’s why there’s often disagreement about whether to think of the EU as essentially pro-free trade or protectionist. It removes tariff barriers between its members, negotiates Free Trade deals on behalf of all of them, and imposes a Common External Tariff on anyone it doesn't have a trade deal with.

The EU also tries to eliminate other barriers to free trade among its members, like non-tariff barriers, and there’s a question about whether the UK will have the same influence over these things once it leaves the customs union.

Non-tariff barriers include things like common safety standards and professional regulations. Businesses find it harder to sell goods and services in other countries if they aren’t the same.

Correction 28 March 2017

The factcheck now refers to the debate about the UK’s WTO commitments outside of the EU, and puts more emphasis on how they will act as a constraint on what tariffs it could set.

This factcheck is part of a roundup of BBC Question Time. Read the roundup.


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