NEW: Extraordinary examples just published by Govt re what will NOT qualify for tariff free trade under UK-EU FTA from Friday as result of “rules of origin”... specialist considerations as to the 1. Grating of cheese 2. Shelling of nuts 3. Assembly of a table 4. Eyes of a doll
Remember in a tariff and quota free deal, access to both markets is almost entirely determined by these rules of origin, essentially the determination that the products traded count as either British or EU, based on parts and/or processing... massively important for cars AND food
fairly confident I was the first broadcaster to do a report on rules of origin in 2017.. it matters. Retailers and producers will have to account for these rules in their supply chains from Friday. Guidance published today, 50 hrs ahead of time. Some red tape requirements delayed
So, let’s go through Government’s examples of immediate consequences of deal on hitherto free flow of trade between UK & EU... first 🧀
“if the only operation that is performed on (imported EU) cheese is grating in a manner that does not require special skills” - won’t qualify
2. this one is for nuts, frozen 🥜
Nuts from the EU can contribute towards something qualifying as made in Britain, and this for zero tariffs, only if sufficiently processed.
“All shelling of nuts is an insufficient process, even if machinery is used” as this is too “simple”
3. Legs of a wooden table 🪵
A wooden table that was assembled in the UK from non UK desktop and and leg “will not be considered originating in the UK” even if both were sourced from the EU as “bilateral cumulation could not apply”...
4. Eyes of a doll 👀
If eyes of a doll made in Britain did not come from the UK or EU, then doll could not qualify for tariff free trade with EU. But if the eyes and all other non originating material in same tariff category were less than 10% of value, Govt would tolerate it.
Good q - technically these are tariff barriers, as in examples of wider issues where failure to prove eligibility (uk/eu origin) will attract actual tariffs. But red tape that goes with having to prove something thats never previously been necessary could be non tariff barrier
that was reply to question about PM’s ref to no non tariff barriers...
Anyway this is all from Govt new guidance, incl some initial easement on reporting, simplified procedures agreed in FTA, but it all does apply and will have to be tracked from Friday gov.uk/government/pub…
“If the only operation performed on the cheese is grating in a manner that does not require a special skill” or a specialist machine, then EU origin cheese remains that, and not British, under the deal and will attract tariffs...
New UK Govt case studies of new trade processes/ non tariff barriers replacing frictionless trade within single market/customs union from UK in transit via France exports of fish:
Customs EORI.
Export HEalth certificate
Rules of Origin,
Traces,
CHED,
Export safety declaration...
Govt lists 18 key steps required from about 4 hours time, to export fish from GB to EU via transit in France including 6. “Get someone to deal with customs for you”
CM Picardo says under the outline agreement the territory of Gibraltar will be part of the Schengen zone, that there will be Frontex EU border presence at airport/ ports (though not Spanish Guardia Civil) and that Gibraltar will have access to the Schengen Information System
Picardo also thanks PM and FM Raab for recognising that Gibraltar needed a “differentiated” settlement from rest of UK
SJ was well known pro-EU campaigner, even on Cameron’s bus day before EUref.. but the PM’s Dad announcing on French radio he’s going to claim French citizenship/EU passport on day those rights stop for rest UK as result of his son’s deal is a... plot twist rtl.fr/actu/internati…
He says something like “we will always be European” - cant recall hearing that language so much from the Government now, although it was there repeatedly immediately after the referendum... VDL recently pointedly seems to define European as to exclude UK...
couple of years ago, a rather high profile Brexiteer even floated idea, privately, that the UK should carry on flying the blue flag with the yellow stars because it is in fact the Council of Europe flag, appropriated by EU, and we are still and will be a member of the former...
Had a quick look at the 1246 page legal text, obtained by my BBC colleagues... first impressions - goes way beyond Canada-style deal, eg in terms of the “rebalancing clause” on future divergence... this will detain us for days/ weeks... first thoughts:
First it’s impressive long & detailed. But why so long if tariffs/quotas are zero?
length is about complicated institutional architecture whilst not compelling alignment, designed to create disincentives for divergence.
- expect these mechanisms to be used. They will matter
So it’s zero tariff and zero quota *for now*... but there are a number of levers or switches in the agreement to turn off those tariff advantages, should one side be deemed to be acting “unfairly”.
A political win with an upfront economic cost, not now compounded by tariffs... but the PM is about to find out precisely what a “non-tariff barrier” is, both within Europe, and within the UK:
EU to implement six year phase in of requirement for electric cars to have a maximum of 45% content from outside Europe. will go 60%-55%-45%.
UK wanted 70%. EU carmakers backed.
Compromise, but could be tight for some manufacturers..
That is to say, if battery production is not in Europe (rather than Asia) or expensive hybrid systems shipped from Japan... there might be a challenge to qualify for tariff free export... we dont have the numbers on %age local content because never been required before now...