World

UK to cut tariffs, have no checks on Irish border in no-deal Brexit

British government will scrap tariffs on 87% of imports to try and soften immediate impact no-deal exit

LONDON Britain said it would eliminate import tariffs on a wide range of goods and keep the border between Ireland and Northern Ireland free of customs checks if it leaves the European Union without a transition deal.

The government announced the temporary measures, which it hopes would soften the immediate impact of a no-deal Brexit, as lawmakers prepared to vote yesterday (3am today, Singapore time) on whether Britain should leave the EU without any transition agreement.

British lawmakers on Tuesday handed Prime Minister Theresa May a second humiliating defeat on the Brexit plan she had agreed with the EU, plunging the country deeper into political crisis.

That prospect of a no-deal exit is alarming many employers as the March 29 departure date looms large.

The government's no-deal tariff plan, which would last for up to 12 months, would seek to keep prices down for consumers while also minimising job losses among manufacturers in the world's fifth-biggest economy.

Eighty-seven per cent of total imports to the United Kingdom by value would be eligible for tariff-free access, up from 80 per cent now.

Some protections for British producers would remain in place, including for carmakers - who are major employers in Britain - and beef, lamb, pork, poultry and dairy farmers.

Aluminium, steel, machinery, arms and ammunition, footwear, paper and wood products would be exempt from tariffs.

The plan would expose many manufacturers to cheaper competition from abroad.

A group representing farmers said it was concerned that eggs, cereals, fruit and vegetables would also not be protected by tariffs.

If maintained, the plan could make it harder for Britain to extract concessions from other countries in future trade talks.

Cutting tariffs on imported goods would ease the hit to British consumers from an expected jump in inflation in the event of a no-deal Brexit, which would probably cause sterling to tumble and make imports more expensive.

But the price of cars and food imported from the EU could rise because the new plan would introduce tariffs.

The head of a British carmakers industry group said the protections offered - which included no tariffs on parts imported from the EU - would not resolve the "devastating effect" of a no-deal Brexit.

"No policy on tariffs can come close to compensating for the disruption, cost and job losses that would result," said Mr Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders.

"It's staggering that we are in this position with only days until we are due to leave."

The new system would mean 82 per cent of imports from the EU would be tariff-free, down from all of them now, while 92 per cent of imports from the rest of the world would pay no duties at the border, up from 56 per cent now. - REUTERS

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