B1272 - International Trade (Post EU Withdrawal Bill) 2017

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B1272 - Proposed: Rt Hon. Nigel Farage MEP, Rt Hon. Jammy Duel, Wilhuff Tarkin MP.

International Trade With non-EU countries
After Withdrawal from the European Union Bill 2017

A
BILL
TO

To set out a basis for international trade with countries Britain does not have a deal with after withdrawal from the European Union

BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-

1 Interpretations

(1) The four-digit code before products is the World Trade Organisation’s (WTO) chapter code and heading code. The first two digits are the chapter code with the last two digits the heading code.
(2) A home nation in the context of this bill is the United Kingdom.
(3) Most-favoured-nation treatment is the levy of a tariff on a third party who has been designated most-favoured-nation, the tariff levied will be equal to the lowest tariff negotiated with any foreign country in a bilateral tariff negotiation.
(4) A specific tariff is an import duty that assigns a fixed monetary amount tax per unit of physical product.
(5) An ad valorem tariff is a tax levied as a constant percentage value of the consumer price of one unit of the imported good.
(6) A preferential duty is a tariff levied on imports depending on the import’s geological source.
(7) An offshore assembly tariff if a tariff levied on the price of a good minus the cost of the parts used to make that good sourced from the United Kingdom.
(8) The nominal tariff rate is the rate of tariff applied to a good.
(9) The value added of a good is the price of the good minus the cost of the components used to produce the good. Value added of a good is equal to the marginal gross profit of the good.
(10) The effective rate of protection (ERP) is the value added under protection minus the value added under free trade, divided the value added under free trade. That is, (VP – VFT) / VFT.
(11) An export subsidy is a specific or ad valorem payment attached to a good destined to be exported out of the country.
(12) An import quota is a restriction placed on the amount of physical product that can be imported.
(13) A Voluntary Export Restraint (VER) is the agreement where a foreign producer agrees to restrict exports to the United Kingdom.
(14) A government purchase provision is a restriction on the purchase of product by government agencies to only buy from certain suppliers.
(15) A domestic content provision is the stipulation that a certain amount of a good sold in Britain must be made up of material or components sourced or manufactured in the United Kingdom.
(16) A Trade Related Investment Measure (TRIM) are policy steps associated with foreign investment activity in the home country. These include but are not limited to performance measures.
(17) An advance deposit requirement is where the home government demands a deposit by the investing firm equal to the specified percentage value of the future import.

2 The Department for International Trade

(1) The Department for International Trade will be responsible for the setting of trade barriers.
(2) All trade barriers will be reviewed on a biennial basis.
(3) The Department for International Trade may choose to review a trade barrier at any time outside the scheduled biennial review.
(4) The Department for International Trade can designate any country a most-favoured nation.
(5) All products outside section 3, section 11, and section 14 can have their tariffs changed by statutory instruments (Statement of Intent for MHoC purposes) provided the tariffs do not exceed the maximum and minimum barriers stated in this Act.
(a) If neither a maximum nor minimum tariff is stated the tariff amount may not be changed by an SI (SoI for MHoC purposes.
(6) On all items except where otherwise stated, the Department for International Trade may exempt VAT on imported products through use of a SI (or an SoI for MHoC purposes).
(a) The Department for International Trade may increase or decrease VAT on any imported product if the VAT amount does not exceed 20%.
(7) VERs are free to be negotiated by the Department of International Trade.

3 Live animals, edible animal products, non-edible animal products, vegetable products, and other food products.

(1) Code 01 Live Animal products will have a 7.5% tariff.
(a) this may be increased to a maximum of 15%.
(2) Codes 02 Meat and edible meat offal: 03 Fish and crustaceans, molluscs and other aquatic invertebrates: 04 Dairy produce; birds' eggs; natural honey; edible products of animal origin, not elsewhere specified or included will have a 0% tariff.
(3) 05 Products of animal origin, not elsewhere specified or included will have a tariff of 7.5%.
(a) the tariff may be increased to 15%.
(4) 06 Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage: 07 Edible vegetables and certain roots and tubers: 08 Edible fruit and nuts; peel of citrus fruit or melons: 09 Coffee, tea, maté and spices: 10 Cereals: 11 Products of the milling industry; malt; starches; inulin; wheat gluten: 12 Oil seeds and oleaginous fruits; miscellaneous grains, seeds and fruit; industrial or medicinal plants; straw and fodder will have a 0% tariff.
(5) Products in 13 Lac; gums, resins and other vegetable saps and extracts: 14 Vegetable plaiting materials; vegetable products not elsewhere specified or included will have a 0% tariff if intended for human consumption.
(6) 15 Animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes: 16 Preparations of meat, of fish or of crustaceans, molluscs or other aquatic invertebrates: 17 Sugars and sugar confectionery: 18 Cocoa and cocoa preparations: 19 Preparations of cereals, flour, starch or milk; pastrycooks' products: 20 Preparations of vegetables, fruit, nuts or other parts of plants: 21 Miscellaneous edible preparations: 22 Beverages, spirits and vinegar: 23 Residues and waste from the food industries; prepared animal fodder will have a 0% tariff.
(7) In all sections, products not intended for human consumption may have a tariff up to 20% levied.
(8) The current classification of what products these sections include remain unchanged.

4 Tobacco and manufactured tobacco substitutes

(1) All products coded 24 will attract a maximum 30% tariff.
(2) The current classification of what products these sections include remain unchanged.

5 Mineral Products

(1) 25 Salt; sulphur; earths and stone; plastering materials, lime and cement: 26 Ores, **** and ash: 27 Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral waxes will attract a 0% tariff.
(2) The Department for International Trade can impose a tariff up to X% to raise the price of imports up to the lowest price of a home product attracting the same four-digit code and subheadings if exported.
(3) The current classification of what products these sections include remain unchanged.

6 Products of the chemical or allied industries, plastics, and rubber.

(1) Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes: 29 Organic chemicals: 30 Pharmaceutical products: 31 Fertilisers: 32 Tanning or dyeing extracts; tannins and their derivatives; dyes, pigments and other colouring matter; paints and varnishes; putty and other mastics; inks: 33 Essential oils and resinoids; perfumery, cosmetic or toilet preparations: 34 Soap, organic surface-active agents, washing preparations, lubricating preparations, artificial waxes, prepared waxes, polishing or scouring preparations, candles and similar articles, modelling pastes, 'dental waxes' and dental preparations with a basis of plaster: 35 Albuminoidal substances; modified starches; glues; enzymes: 36 Explosives; pyrotechnic products; matches; pyrophoric alloys; certain combustible preparations: 37 Photographic or cinematographic goods: 38 Miscellaneous chemical products: 39 Plastics and articles thereof: 40 Rubber and articles thereof will attract a maximum of a 10% tariff.
(2) For all products in section 6(1) whose current tariff is above 10% will see their tariff lowered to 10%.
(a) This maximum ceiling can be lowered by use of a SI (or a SoI for MHoC purposes).
(3) All products in section 6(1) will have their tariffs reduced by 33%.
(4) Goods (other than radioactive ores) answering to a description in heading 2844 or 2845 are to be classified in those headings and in no other heading of the nomenclature.
(5) Subject to paragraph (4) above, goods answering to a description in heading 2843, 2846 or 2852 are to be classified in those headings and in no other heading of this section.
(6) Subject to (5) above, goods classifiable in heading 3004, 3005, 3006, 3212, 3303, 3304, 3305, 3306, 3307, 3506, 3707 or 3808 because of being put up in measured doses or for retail sale are to be classified in those headings and in no other heading of the nomenclature.
(7) Goods put up in sets consisting of two or more separate constituents, some or all of which fall in this section and are intended to be mixed together to obtain a product of Section VI or VII, are to be classified in the heading appropriate to that product, provided that the constituents are:
(a) having regard to the way they are put up, clearly identifiable as being intended to be used together without first being repacked;
(b) presented together; and
(c) identifiable, whether by their nature or by the relative proportions in which they are present, as being complementary one to another.
(8) Except for the goods of heading 3918 or 3919, plastics, rubber, and articles thereof, printed with motifs, characters or pictorial representations, which are not merely incidental to the primary use of the goods, fall in 49.

7 Raw hides and skins, leather, furskins and articles thereof; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut)

(1) 41 Raw hides and skins (other than furskins) and leather: 42 Articles of leather; saddlery and harness; travel goods, handbags and similar containers; articles of animal gut (other than silkworm gut): 43 Furskins and artificial fur; manufactures thereof will have a 0% tariff.
(2) The current classification of what products these sections include remain unchanged.

8 Wooded products

(1) 44 Wood and articles of wood; wood charcoal: 45 Cork and articles of cork: 46 Manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork: 47 Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or paperboard: 48 Paper and paperboard; articles of paper pulp, of paper or of paperboard: 49 Printed books, newspapers, pictures and other products of the printing industry; manuscripts, typescripts and plans will have a 0% tariff.
(2) On products 44 to 48 that are not produced in Britain the Department for International Trade may impose a maximum tariff of 20%.
(3) The current classification of what products these sections include remain unchanged.

9 Textiles and textile articles

(1) 50 Silk: 51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric: 52 Cotton: 53 Other vegetable textile fibres; paper yarn and woven fabrics of paper yarn: 54 Man-made filaments; strip and the like of man-made textile materials: 55 Man-made staple fibres: 56 Wadding, felt and nonwovens; special yarns; twine, cordage, ropes and cables and articles thereof: 57 Carpets and other textile floor coverings: 58 Special woven fabrics; tufted textile fabrics; lace; tapestries; trimmings; embroidery: 59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use: 60 Knitted or crocheted fabrics will attract a tariff of 0%.
(2) 61 Articles of apparel and clothing accessories, knitted or crocheted: 62Articles of apparel and clothing accessories, not knitted or crocheted: 63 Other made-up textile articles; sets; worn clothing and worn textile articles; rags will attract a maximum offshore assembly tariff of 10%.
(a) Children’s clothing will have a 0% tariff under all circumstances.
(3) The current classification of what products these sections include remain unchanged.

10 Other clothing

(1) 64 Footwear, gaiters and the like; parts of such articles: 65 Headgear and parts thereof: 66 Umbrellas, sun umbrellas, walking sticks, seat-sticks, whips, riding-crops and parts thereof: 67 Prepared feathers and down and articles made of feathers or of down; artificial flowers; articles of human hair will attract a maximum offshore assembly tariff of 3% provided the items are hand-made.
(a) If the product is not handmade a maximum tariff of 5% may be levied.
(2) The current classification of what products these sections include remain unchanged.

11 Raw materials

(1) 68 Articles of stone, plaster, cement, asbestos, mica or similar materials: 69 Ceramic products: 70 Glass and glassware: Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with precious metal, and articles thereof; imitation jewellery; coin will attract a maximum tariff of 10%.
(2) 72 Iron and steel: 73 Articles of iron or steel: 74 Copper and articles thereof: 75 Nickel and articles thereof: 76 Aluminium and articles thereof: 78 Lead and articles thereof: 79 Zinc and articles thereof: 80 Tin and articles thereof: 81 Other base metals; cermet; articles thereof will attract an unlimited tariff and a minimum tariff of 10%.
(a) The Department for International Trade may impose an import quota no greater than 50% demand in the United Kingdom for the previous year.
(b) The Department for International Trade may impose a nominal tariff no greater than £100 per metric tonne.
(c) In the section 11(2) and section 11(2)(2) a tariff imposed must not have an effective rate of protection greater than 50%.
(3) 82 Tools, implements, cutlery, spoons and forks, of base metal; parts thereof of base metal: 83 Miscellaneous articles of base metal will have a maximum tariff of 10%.
(4) The current classification of what products these sections include remain unchanged.

12 Machinery

(1) 84 Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof will have a maximum tariff of 5%.
(2) 85 Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles will have a maximum tariff of 7.5%.
(3) The current classification of what products these sections include remain unchanged.

13 Vehicles, aircraft, vessels and associated transport equipment

(1) 86 Railway or tramway locomotives, rolling stock and parts thereof; railway or tramway track fixtures and fittings and parts thereof; mechanical (including electromechanical) traffic signalling equipment of all kinds: 87 Vehicles other than railway or tramway rolling stock, and parts and accessories thereof: 88 Aircraft, spacecraft, and parts thereof: 89 Ships, boats and floating structures will attract a 0% tariff.
(a) Value Added Tax on these good will be 0% if more than 10% of the product is built or sourced from the United Kingdom.
(2) The current classification of what products these sections include remain unchanged.

14 Music, cinema, and photography

(1) 90 Optical, photographic, cinematographic, measuring, checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof: 91 Clocks and watches and parts thereof: 92 Musical instruments; parts and accessories of such articles will attract a maximum tariff of 0%.
(2) The current classification of what products these sections include remain unchanged.

15 Military arms

(1) 9301 Military weapons, other than revolvers, pistols and the arms of heading 9307: 9302 Revolvers and pistols, other than those of heading 9303 or 9304: 9303 Other firearms and similar devices which operate by the firing of an explosive charge (for example, sporting shotguns and rifles, muzzle-loading firearms, pistols and other devices designed to project only signal flares, pistols and revolvers for firing blank ammunition, captive-bolt humane killers, line-throwing guns) will have a 0% tariff.
(2) 9304 Other arms (for example, spring, air or gas guns and pistols, truncheons), excluding those of heading 9307: 9305 Parts and accessories of articles of headings 9301 to 9304 will have a maximum tariff of 7.5%.
(3) 9306 Bombs, grenades, torpedoes, mines, missiles and similar munitions of war and parts thereof; cartridges and other ammunition and projectiles and parts thereof, including shot and cartridge wads will have a 0% tariff.
(4) 9307 Swords, cutlasses, bayonets, lances and similar arms and parts thereof and scabbards and sheaths therefor will have a maximum tariff of 10%.
(5) The current classification of what products these sections include remain unchanged.

16 Miscellaneous goods

(1) 94 Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like; prefabricated buildings: 95 Toys, games and sports requisites; parts and accessories thereof: 96 Miscellaneous manufactured articles will have a maximum tariff of 5%.
(2) 97 Works of art, collectors' pieces and antiques will have a tariff of 0%.
(3) 98 Complete industrial plant will attract a 0% tariff.
(a) Exporting complete industrial plants abroad will have 20% export subsidy.
(b) VAT on importing complete industrial plants will be 0%.
(c) TRIMs set out by the Department of International Trade must be met to receive the 0% VAT.
i. If the TRIM is not met the importer will have to pay 20% VAT backdated on the import price of the foreign plan after the time period for the TRIM has expired.

17 Trade sanctions

The Department of International Trade may impose an unlimited quota or tariff on goods from any country with approval from a Parliamentary vote.

18 Commonwealth and most-favoured nations

(1) Countries in the Commonwealth of nations will receive a preferential duty of 0% on all items, unless:
(2) There is a Parliamentary vote to levy maximum trade barriers on goods from the Commonwealth of nations.
(a) Maximum trade barriers will be 50% of the tariffs or quotas given in this Act.
(3) The Department of International may deem any nation a most-favoured nation in an SI (SoI for MHoC purposes).
(a) A most-favoured nation will receive the same tariff and quotas rates as Commonwealth nations.

19 Government purchases

(1) In this Act a government purchase is a one-off purchase of a good to be used by the a government department or to be given to a private organisation by the government for use.
(2) In this Act a government department is a public service, including but not limited to the NHS and police forces, local authorities, the devolved administrations in the United Kingdom, and Parliament.
(3) All government purchases shall be required to be purchased from a British firm if the cost of the purchase from a British firm does not exceed the stated limit of the cost of the purchase from a foreign firm.
(4) A government contract will have to be signed with a British firm if the cost of the contract averages out as less than 6% per year as the average cost of a contract with a foreign firm.
(5) In this bill a British firm is a company registered at Companies House with the tax domicile in the United Kingdom, a subsidiary of a company with their tax domicile in the United Kingdom, or a company with the controlling majority of shareholders being British citizens residing in the United Kingdom.
(6) For all imported products coded 01XX-92XX and 94XX-99XX the stated limit price will be 5%.
(7) For all imported products coded 93XX the stated limit price will be 10%.

20 Application

(1) This Act shall not apply to EU countries unless no deal on the withdrawal from the European Union is reached.
(2) If a deal on anything covered in this Act is not reached with the European Union, this Act shall extend to cover countries of the European Union.

21 Short Title, commencement, and extent.

(1) This Act may be cited as the Trade Act 2017.
(2) This bill shall come into force on the nearest 1st April after the United Kingdom withdraws from the European Union.
(3) This Act shall extend to the United Kingdom.

Notes

What this bill does do:

- Allow governments to change tariff rates to below the maximum WTO tariffs on imported products using an SI, or a Statement of Intent for MHoC Purposes.
- Imposes maximum tariffs on items.
- Imposes minimum tariffs on raw materials like steel and iron where dumping is a problem.
- Allows the Department for International Trade to set quotas on some items.
- Introduces a 0% tariff on all food that can only be changed by a Parliamentary vote.
- Introduces 0% tariffs on goods from the Commonwealth of nations.
- Introduces a government purchase provision.

What this bill does not do:

- Introduce set tariffs on products, excluding food which is 0%.
- Prevent governments from increasing or decreasing tariffs to suit conditions of the time.
- Control what can be imported.

The categories for number are the WTO standard which can be found on the government's trade-tariff website. https://www.gov.uk/trade-tariff

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Rakas21

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Speakers Note: Had to shorten the main thread title. For the purposes of HANSARD it will retain its full name.

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Saunders16

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A strong Aye from me; I do not believe there is an adequate reason to oppose it.

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Jammy Duel

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(Original post by Saunders16)
A strong Aye from me; I do not believe there is an adequate reason to oppose it.

What, the government's belief this is impossible is insufficient?

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TheDefiniteArticle

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(Original post by Jammy Duel)
What, the government's belief this is impossible is insufficient?

Aside from the fact that this does something totally different to the petition?

--------------

Nay. The good parts of this (allowing tariffs to be amended by SI) are fine, but this is done in far too complex a way and I don't trust the House to legislate in a way which is more sensible than canon for the rest.

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username1524603

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(Original post by TheDefiniteArticle)
Aside from the fact that this does something totally different to the petition?

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Nay. The good parts of this (allowing tariffs to be amended by SI) are fine, but this is done in far too complex a way and I don't trust the House to legislate in a way which is more sensible than canon for the rest.

It needs to be complex, there should not be a situation where importers argue about the classification of goods, maximum tariffs on one good impact the maximum tariff value of another good, the government is prevented from changing tariffs on one category of goods when another category should not have its tariffs changed, or needing to pass more legislation because the government did not include the full range of goods when setting the tariffs. If you can think of a less complex way to control tariff levels that does not use the international categorisation of imports while keeping the benefits of using the international categorisation of imports system please let me know.

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Saracen's Fez

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I oppose removing import tariffs on food to nought, in particular when British farmers will still face tariffs when exporting their products.

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barnetlad

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What about all these wonderful trade deals we are supposed to be able to do with the rest of the world post Brexit?

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TheDefiniteArticle

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(Original post by Nigel Farage MEP)
It needs to be complex, there should not be a situation where importers argue about the classification of goods, maximum tariffs on one good impact the maximum tariff value of another good, the government is prevented from changing tariffs on one category of goods when another category should not have its tariffs changed, or needing to pass more legislation because the government did not include the full range of goods when setting the tariffs. If you can think of a less complex way to control tariff levels that does not use the international categorisation of imports while keeping the benefits of using the international categorisation of imports system please let me know.

What exactly do you think the benefits of adopting our own system are exactly?

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Jammy Duel

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(Original post by Saracen's Fez)
I oppose removing import tariffs on food to nought, in particular when British farmers will still face tariffs when exporting their products.

Those tariffs on domestic food remain either way, and the removal of tariffs on imports would save households hundreds of pounds a year, about £300 for removal of the CET alone, even more if the remaining tariffs are removed. Then again, who wants to make the poor man richer?

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Jammy Duel

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(Original post by barnetlad)
What about all these wonderful trade deals we are supposed to be able to do with the rest of the world post Brexit?

The two aren't mutually exclusive

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username1524603

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(Original post by TheDefiniteArticle)
What exactly do you think the benefits of adopting our own system are exactly?

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This bill does not have Britain adopt its own system, this bill uses the existing system and recommended tariffs from the WTO to set out maximum tariffs on goods controlled by SoIs. It was you who called the bill complex which made me think you had a simpler system in mind that would be better to use than the WTO system.

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TheDefiniteArticle

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(Original post by Nigel Farage MEP)
This bill does not have Britain adopt its own system, this bill uses the existing system and recommended tariffs from the WTO to set out maximum tariffs on goods controlled by SoIs. It was you who called the bill complex which made me think you had a simpler system in mind that would be better to use than the WTO system.

I don't. I simply fail to see any improvements on canon.

Also, let's be real, barely anyone is going to read this ****.

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username2585877

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(Original post by TheDefiniteArticle)
I don't. I simply fail to see any improvements on canon.

Also, let's be real, barely anyone is going to read this ****.

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any reduction in tariffs is a good thing. countries trading according to their comparative advantages on the productive possibilities frontier is what creates wealth. an aye from me.

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username1524603

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(Original post by TheDefiniteArticle)
I don't. I simply fail to see any improvements on canon.

Also, let's be real, barely anyone is going to read this ****.

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The improvement is allowing the government to easily set tariffs that differ from real life after Brexit if the government wishes to do that. And MPs should read all bills, if MPs do not bother to read bills those MPs should not be MPs.

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ns_2

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Am I right in saying that this bill imposes slightly amended WTO guided tariffs, allowing the Department for International Trade to effectively 'rule by decree' and amend at a later date through Statements of Intent?

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username1524603

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(Original post by ns_2)
Am I right in saying that this bill imposes slightly amended WTO guided tariffs, allowing the Department for International Trade to effectively 'rule by decree' and amend at a later date through Statements of Intent?

Yes, but the later changes will be capped at a maximum tariff.

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ns_2

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(Original post by Nigel Farage MEP)
Yes, but the later changes will be capped at a maximum tariff.

I may be in favour for this as long as it is an interim 'transitional' short-term fix.

I would fully support this bill if the bill contained a clause that simply stated that

'On reaching a deal with a foreign country, this bill no longer applies to this country on the date of ratification by both countries'.

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username1524603

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(Original post by ns_2)
I may be in favour for this as long as it is an interim 'transitional' short-term fix.

I would fully support this bill if the bill contained a clause that simply stated that

'On reaching a deal with a foreign country, this bill no longer applies to this country on the date of ratification by both countries'.

Treaties would always be dominant to a bill passed year ago, however, that clause will be added.

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ns_2

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(Original post by Nigel Farage MEP)
Treaties would always be dominant to a bill passed year ago, however, that clause will be added.

Thank you - unless anyone can raise legitimate objections, I will support this bill for it provides the economy with a specified degree of certainty - avoiding a 'cliff-edge' Brexit whereby we revert to WTO without prior planning, implementation and debate.

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