UK goods and services tariff schedules at the WTO

This week the Government announced the UK’s new Most Favoured Nation (MFN) tariff regime, the UK Global Tariff (UKGT). This will replace the EU’s Common External Tariff on 1 January 2021 at the end of the Transition Period.

ADS responded to the consultation which ran in February 2020 for 4 weeks, with views on simplifying and tailoring the UK Global Tariff policy. Removing tariffs on goods imported by UK businesses to manufacture other goods should support the UK economy by making it cheaper and easier to import required products.

ADS responded broadly in favour of removing nuisance tariffs on aerospace products both civil and military and reducing tariffs to zero where possible, with many ADS members responding individually with regards to specific tariff lines.

Outcomes of the consultation response suggest that there was largely agreement in support of the proposal of removing tariffs on key inputs to production and manufacturing. Companies believe there will be a positive impact in the productivity of UK industry with the removal of tariffs on some input goods which will support UK business competitiveness as the UK leaves the EU.

The outcome of the new tariff schedule is a simplification across nearly 6,000 tariff lines which will help lower costs for businesses by reducing administrative burdens. The changes include scrapping unnecessary tariff variations, rounding tariffs down to standardised percentages, and getting rid of all “nuisance tariffs” (those below 2%).

In addition to liberalising some tariffs there has been an effort to make the tariff schedule simpler and easier to use. The new plan comes with six months to go under the current transition arrangements, and under the new plan 60% of goods will be tariff-free.  This is a somewhat more considered approach compared to the temporary tariff schedule the UK Government proposed in the event of a no-deal Brexit last year, which would have seen 87% of U.K. imports made tariff-free. The new regime will maintain tariffs on imported products competing with UK industries such as agriculture, automotive and ceramics.

For interest to ADS members there has been significant liberalisation of tariffs related to parts of aerospace engines, aircraft, and other associated parts. Members with specific interest in tariff lines should use the Check UK trade tariffs from 1 January 2021 tool.