Soon after the Brexit deal was announced, Prime Minister Boris Johnson was quick to state that he had negotiated a tariff-free trade agreement.
However, the House of Lords European Union (EU) Goods Sub-Committee has been told that there is no such thing as a tariff-free trade agreement.
The international trade policy manager at the Society of Motor Manufacturers and Traders, Alessandro Marongiu told the Committee that “tariffs apply unless you comply, and can demonstrate you comply, with rules of origin requirements. The threat of tariffs is there although agreement allows us to trade tariff-free and quota-free”. He also said the industry faced the risk of duplicated costs from having to comply with both United Kingdom (UK) and EU rules, plus friction at the border. He did however note, that without the Trade and Cooperation Agreement it would have been even more difficult for automotive businesses.
The senior executive at the Food and Drink Federation, Luke Hindlaugh stated that safety and hygiene rules offered significant barriers to trade for UK firms. He said, “to sum it up, the headlines (of the deal) are very good, but you need to look beneath the bonnet on this one. Rules of origin in some cases mean the UK has worse access to the EU than Canada does under its trade deal”.