The UK’s trade minister Liam Fox is considering a zero-tariff regime as a means to manage a no-deal Brexit crisis.
The measure would decongest trade flows from Dover to Calais but, according to the World Trade Organization’s rules, if this policy was extended to the EU it would have to be extended to all states.
The announcement triggered outrage by the British Ceramics Confederation, a sector that stands to be ruined by international competition, the Financial Times reported. The plan was also condemned by unions as a betrayal of Brexit, as they had been promised national protection in key industrial sectors once the United Kingdom quits the European Union.
The national secretary for manufacturing, Jude Brimble, slammed the zero-tariff policy as nothing less than “industrial sabotage,” calling on parliament to reject the overture.
The Labour Party’s Shadow Trade Secretary, Barry Gardiner, denounced the notion of a unilateral zero-tariff policy as an act of “sheer lunacy” amid trade negotiations, as it would remove any incentive from the EU and the rest of the world to reciprocate.
The Institute for Fiscal Studies says that a zero-tariff policy will not have a significant effect on prices as tariffs are generally low due to the EU’s various trade agreements.