Australia and others ask for Brexit trade compensation

Ships at FelixstoweImage copyright Getty Images

Countries including Australia have asked for trade compensation from the UK and the EU over Brexit disruption.

Fifteen countries, including the US, India and New Zealand, have been setting out Brexit concerns at a World Trade Organization (WTO) meeting in Geneva.

Australian officials said their beef and lamb exporters had already been hit after several Brexit delays.

Brazil said Brexit plans for Northern Ireland could breach WTO rules.

The main issue for the 15 countries is a system which allows them easier access to the EU’s large market for limited quantities of some of their goods, mainly farm produce.

It’s a system known as “tariff rate quotas”.

World Trade Organization members generally apply tariffs – taxes on imports – to many of the goods they buy from abroad.

For some products they have made commitments to allow specified amounts to be imported with tariffs that are lower than what they usually apply. In some cases the reduced tariff is zero.

It makes it more profitable for Australian farmers to sell beef to Europe, for example.

Brexit complicates this.

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Image caption Australia said beef and lamb exporters had been hit by Brexit delays

The current quotas are for the whole of the EU, the UK included.

Brexit means the UK and the EU have to decide how to divide them up.

Some countries say that could lead to them having less of the favourable access than they currently have to what is a large and wealthy market.

A Department for International Trade spokesperson said: “We have set out our Goods Schedule at the WTO to maintain the existing balance of rights and obligations between the UK and our trading partners.

“The UK has entered into negotiations with affected countries under the GATT (General Agreement on Tariffs and Trade) Article XXVIII process to maintain the current balance of rights and obligations.”

Australia said that the UK and EU had proposed different ways of allocating the quotas that would add up to less access than Australian exporters currently have.

The US argued that it could end up with no access at reduced tariffs for pizza cheese to the UK or grape juice to the EU.

Another concern is that the UK and EU might themselves end up using part or even all of the other’s quota.

The US argued that could severely hit its sales of pork and wine.

Some countries are demanding compensation from the UK and EU. In the WTO that would usually mean reducing tariffs on other goods.

Brexit delays

Australia also argued that it has already been affected by Brexit.

A paper prepared for the meeting said that when Brexit was still scheduled for 31 October, many Australian businesses ceased exports of valuable beef and sheep meat ahead of Christmas because of uncertainty about whether they would be able to make use of these quotas.

The document said similar decisions were taken ahead of a previous possible Brexit dates and will have to be taken again before 31 January.

Image copyright Getty Images
Image caption Demonstrators dressed as customs officials have been protesting against potential Northern Ireland border checks.

Ireland question

Brazil has raised another concern about the plans for customs procedures between Northern Ireland and Great Britain.

Brazilian officials said it could violate the WTO’s rules against discrimination.

The documents the BBC has seen don’t spell out the reason for this, but it is probably based on the plans to have an open border between Northern Ireland in the UK and the Republic of Ireland in the EU.

Combined with the plans for limited checks on goods between Northern Ireland and the rest of the UK, it might provide an opportunity for goods to travel between the UK and EU without restrictions or possibly tariffs that would apply to similar goods from the rest of the world.

Brazilian officials said it was paramount that the WTO’s non-discrimination principle is preserved.

It was not clear, they argued, that the proposed arrangements for Northern Ireland would guarantee that would happen.


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