Friday, 18 May 2018

Pesky facts and knowledge!


“It makes no sense for the UK to continue to impose taxes on New World wines, coffee, rice and thousands of other products, and then to send the proceeds to Brussels. The EU masquerades as a free trade organisation, but it is really a protection racket which imposes import taxes on the 93% of the world's population that is not in the EU.”

So says Tim Martin, chair of Wetherspoons. By that measure the USA is a protection racket which imposes import taxes on the 96% of the world's population that are not US residents. Donald Trump appears to be making a similar case in this conversation with the Secretary General of NATO, as discussed by an EU foreign policy specialist:




Read the whole thread, but snippets such as 'EU import duties on passenger cars are 10%; US duties are 2.5%. But the US market is far more reliant on pickups and trucks, and here the US charges 25% duties as opposed to the EU's 10%' and 'those BMWs and Mercedes "pouring into the United States" - BMW's largest car plant IN THE WORLD is in South Carolina, producing 450,000 vehicles a year' might come in useful.


Dan Hannan, hard at work in the EU Parliament
And then, what did Martin say about New World wines? I remember something from a man the media keep calling an "arch-Brexiteer" - Daniel Hannan MEP. He's deleted the tweets in question (wonder why), but the Mirror tells the story. The British Retail Consortium warned international trade minister Laim Fox that "shop prices on a range of goods would go up considerably if Britain was forced to default to World Trade Organisation rules".

Hannan protested: claims that the price of Chilean wine (a New World product he is apparently fond of) would rise by 14% on Brexit were "idiotic" because, after all, it would no longer be subject to a 35% EU-wide import tariff on wines. And he was immediately reminded (by people who haven't deleted their tweets) that the EU has a free trade agreement with Chile, so no tariff on their wine. In fact:

  • The general tariff on wine actually seems to be "about 8p a bottle"
  • We've been paying Hannan to represent some of us in the EU parliament for 19 years now. Has he learned nothing?
  • And another thing - "European Commission deputy Brexit negotiator Sabine Weyand said that London will need permission from all of Europe’s more than 40 trade partners to stay in agreements during the post-Brexit transitional period. She revealed that two countries - South Korea and Chile - had already raised objections", so Mr Hannan can't yet be sure his post-Brexit Chilean wine will still be tariff-free.
Dan Hannan has done this kind of thing several times, objecting to an apparently terrible tariff on a product from a third world country which turns out to be very, very wrong or non-existent (and people have learned to keep images of his tweets as evidence when he inevitably deletes them).

****

David Miliband "intervened" in the ongoing Brexit debate this week and it brought a celebrated image to Hannan's mind (among many others, I'm sure).

But young Daniel couldn't resist one of his forays into tariff-hunting. This time he was taken apart by Essex University's Professor of EU, Human Rights and World Trade Law.




Again, a quick extract: "The link which Hannan himself provides points out that there are no tariffs on bananas from African, Caribbean and Pacific countries". Could those perhaps include a lot of bananas from the Commonwealth?

****

Returning to Tim Martin's list of concerns, let's look at coffee. Nadine Dorries MP puts her head up every now and then - in February it was to claim that "Roasted coffee beans have duty applied to prevent poorer countries from creating an industry of processing. British pay, German and Italian roasters benefit - the countries that produce the beans, remain poor".

Here, Jim Cornelius takes us through step by step for the top ten coffee producing nations in Africa, concluding with "Eight of them are on zero tariff. One is on a reduced tariff and only one, Gabon, is on the full tariff for roasted coffee. An EPA [Economic Partnership Agreement] is in the pipeline that will reduce this to zero".




In general, therefore, products from the poorest countries normally attract no tariffs on imports under the EU's Everything But Arms scheme, reduced or zero tariffs under the EU's Generalised System of Preferences, or zero tariffs under an actual free trade agreement.

Here's a list of people who get things wrong:
  • Tim Martin
  • Dan Hannan
  • Nadine Dorries
And here's a list of people who put them right, by actually knowing things and doing research:
  • Chris Kendall
  • Steve Peers
  • Jim Cornelius

Guess who gets paid to get things wrong (all of them) and to get things right (Chris Kendall and Steve Peers). Now guess who you're more likely to see or hear on the news (the wrong group).

And in case you were wondering about that point at the top, the US being just like the EU as a "tariff-charging protection racket", here's a chart showing the average tariffs charged (weighted by actual trade) by the EU (including the UK), the US and Australia. Tariffs will be higher and lower on some products than others, in one country compared with another, but the overall effect isn't all that different.




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