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Australia and others ask for Brexit trade compensation

November 15, 2019

 

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 fifteen 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.

 

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.

 

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.

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