New evidence from the British Retail Consortium (BRC) has shown the importance to UK consumers of maintaining the benefits of trade deals the EU has negotiated with other countries.
As a member of the EU, the UK currently benefits from zero to low rate tariffs on various imports from trade deals that the EU has negotiated with third countries. On 30 March 2019, the UK will leave the EU and from that moment on, will no longer be covered by these international agreements – meaning imported goods will be subject to higher tariffs and potential customs barriers. For the end consumer, this equals a higher overall price.
Using import data from UK retailers, the BRC identified the countries where negotiating replica agreements will make the most difference to ensure prices don’t rise immediately on exit. Said deals are particularly important for the price of food and clothing for shoppers in the UK.
For instance, in the event of a no deal, the tariff on clothing from Turkey – a major supplier to the UK – could rise from zero to 12 per cent.
“While securing a deal with the EU to enable tariff-free trade to continue remains the priority, the deals the EU has negotiated with countries around the world also contribute to the choice and affordability of goods UK shoppers purchase every day,” says Andrew Opie, director of Food & Sustainability, BRC. “People need reassurance from Government that these deals will be transferred in time to ensure that UK consumers don’t lose out.
“New higher tariffs inevitability mean that consumers would face higher prices in their everyday shop, as staple products such as fruit, vegetables and clothing would be hardest hit. Price increases of any scale would add to the burden of hard-pressed consumers whose finances are already being squeezed for inflationary prices.
“Now that an agreement has been reached to move the negotiations on to trade, the focus must be on securing the continuity of free trade with Europe, alongside replicating these existing agreements with countries outside the EU. These are crucial next steps that Government need to take to avoid a cliff-edge situation on Brexit day and deliver a fair Brexit for consumers,” he concludes.