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The Great Myth of EU Tariffs

When the EEC was formed during the 1960s and 1970s there were serious barriers to trade between the countries of Europe. Tariffs of 10-40% were common on a wide range of goods.  In the past 30 years these tariffs have been progressively reduced as a result of World Trade Organization negotiations and bilateral agreements.  Many non-EU Countries now pay little or no customs duty when exporting to the EU.

The story that the UK would face insurmountable tariff barriers if it left the EU is total fiction. In fact, despite the currently low level of tariffs,  the EU wants to go further and is determined to lower tariffs to nearly zero globally:

The EU has Free Trade Agreements with much of the world:


Although Australia is coloured white on the map it trades with the EU on favourable terms under the EU-Australia Partnership Framework 2008 and a Free Trade Agreement is proposed.

The WTO has negotiated zero tariffs for many products (See for instance WTO Strikes Landmark IT Trade Deal for digital products).  In cases where there are still tariffs these tariffs are low.  The total tariff bill if the UK traded with the EU according to WTO rules would be only about £5bn on £226bn of exports and the UK government could refund any EU tariffs paid by exporters after Brexit from import tariffs.


Here are some examples of EU Trade Deals:

South Korea: "The EU-Korea FTA is the most comprehensive free trade agreement ever negotiated by the EU and the first with a partner country in Asia. Import duties are to be eliminated on nearly all products (98.7% of duties in terms of trade value will be eliminated within five years) and there is far-reaching liberalisation of trade in services (including in telecommunications, environmental services, shipping, financial and legal services) covering all modes of supply." EU-South Korea Free Trade Agreement (FTA).

Canada: "CETA will tackle a whole range of issues to make business with Canada easier. It will remove customs duties, end limitations in access to public contracts, open-up services' market, offer predictable conditions for investors and, last but not least, help prevent illegal copying of EU innovations and traditional products."EU-Canada Comprehensive Economic and Trade Agreement

Canada and the EU also negotiated a separate Agreement between the European Community and Canada on trade in wines and spirit drinks that deals with every aspect of wines and spirits, including Geographical Indications (GI) etc. (Article 14). The Scots Whisky industry can be amply protected by a similar treaty.


Norway and EEA: Has open access to EU but not on as generous terms as South Korea Agreement between the European Economic Community and the Kingdom of Norway.  The European Economic Area is a bit of a "con", other countries get Free Trade without being billed for the privilege.

Singapore: Free Trade Agreement:  "will eliminate virtually all tariffs, in the EU's case over a five-year transition period. Singapore has bound its zero tariffs already applied on EU imports. As a result, tariffs cannot be unilaterally raised again." EU-Singapore Free Trade Agreement

Colombia and Ecuador: "The Parties hereby establish a free trade area, in conformity with Article XXIV of the General Agreement on Tariffs and Trade of 1994 (hereinafter referred to as "GATT 1994") and Article V of the General Agreement on Trade in Services (hereinafter referred to as "GATS")" TRADE AGREEMENT BETWEEN THE EUROPEAN UNION AND ITS MEMBER STATES, OF THE ONE PART, AND COLOMBIA AND PERU, OF THE OTHER PART

Japan: A Free Trade Agreement with Japan is in the process of negotiation that will remove tariff barriers for Japanese car exports.  Being in the EU will be no advantage for UK plants that produce Japanese cars  (If the UK were to obtain an FTA with the EU after Brexit it would be in the same position as remaining in the EU for sales of UK made Japanese cars).

And so on for a large number of countries.  Free Trade will occur with the EU whether the UK is IN or OUT - any EXIT agreement would entail a Free Trade Agreement like that with Canada or South Korea.


It is surprising that even without Free Trade Agreements tariffs are so low that they would now only cost the UK £7.4 bn a year globally on about £500bn of exports  - and the UK pays over £11bn a year membership fee to the EU to avoid tariffs!

The WTO have been reducing tariffs, for instance a trillion dollars of Information Technology trade is now exempt from tariffs globally from 2015.

A group of  MPs from the European Free Trade Association, consisting of Iceland, Norway, Lichtenstein and Switzerland, are inviting the UK to join.  Gudlaugur Thor Thordarson, a former Icelandic government minister issued this invitation on the BBC Radio 4 Today programme (10/7/15). EFTA allows members to have independent Free Trade Agreements with other countries and is a club to resist economic bullies like the EU.

See EU Referendum Key Facts for a close analysis of tariffs.

Update 21/9/16: Passporting for Banks.  There has been a lot of scaremongering about whether or not UK banks could operate reasonably freely in the EU after Brexit.  The in-depth report on this by Moodys concludes that banks will not be seriously affected.



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First published June 27th 2015

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