EU companies would need to stop using British parts after Brexit to conform to rules of origin for "Made in EU".
UK companies would need to stop using EU parts to conform to "Made in UK" rules of origin.
The EU can source parts throughout the EU27.
Where will UK source its parts?
UK companies would need to stop using EU parts to conform to "Made in UK" rules of origin.
The EU can source parts throughout the EU27.
Where will UK source its parts?
Here is an important analysis of the effects of rules of origin on the UK's manufacturing industry after Brexit. Why is this not being more widely discussed? instituteforgovernment.org.uk/explainers/rul…
The EU has its own seat at the WTO. Products made in the EU can therefore be sourced from anywhere inside the EU and still be classed as EU products. But after Brexit, we will lose that luxury. If we want to avoid higher duties, our products must then be 55% sourced in the UK.
Trade deals are strictly limited to products originating in each signatory's territory. That's why rules of origin are so important. The advantage of trading through the EU is that our parts can be sourced from across the EU28 and still comply with a "Made in EU" origin.
At the moment, if a UK product is 20% Asian, 15% American, 15% German, 10% French and 40% British, we can sell it without higher tariffs because over 55% of it originates in the EU.
After Brexit, the same product must be 55% British for it to avoid higher tariffs.
#StopBrexit
After Brexit, the same product must be 55% British for it to avoid higher tariffs.
#StopBrexit
The more you study rules of origin, the more you realise how being represented by the EU at the WTO and in trade deals makes perfect sense. USA & China can meet the "55% homemade" requirement easier than any single EU member. But together we all comply to the origin "Made in EU".
