What will Great Britain’s life be after Brexit, at least in terms of trade?
The Rules of Origin
The Rules of Origin may sound like a book, movie or a video game, but it actually will play a major factor on how Britain’s life will be after Brexit.
What are the Rules of Origin?
The Rules of Origin are the criteria required to determine where a product comes from. This is important as it will help you understand the duties and restrictions that come with it.
These Rules of Origin are used in several ways:
- To implement measures of commercial policies such as safeguarding measures and anti-dumping duties,
- For trade statistics,
- To determine if a product will receive preferential treatment,
- For marking and labeling requirements, and
- For government procurement.
How then is Britain affected by these Rules of Origin?
There are two ways in which Britain will be affected:
Through the Preferential Rules of Origin
The UK will gain an advantage that’s exclusive to them if the EU and the UK agree to go for a Free Trade Agreement to eliminate tariffs from each other’s goods,
For goods coming from the UK, proof is required to show that the UK is indeed their country of origin through the rules stated in the Free Trade Agreement. By doing so, countries without existing trade deals won’t be able to enter the EU market via the UK, and vice versa.
Through the Non-Preferential Rules of Origin
Outside the boundaries of a customs union, all exporters from the UK will still need to declare their goods’ origin when they trade with the EU. In this way, the importing countries can protect their producers. This is also for other monitoring purposes.
For example, if either the EU or the UK felt that their imports are causing damage to its own producers, then a temporary tariff can be applied to the import. In these cases, the UK or the EU will have to specify the origin of the import that it wants to apply duty to. This is so that other countries’ imports won’t be affected.
Other Trade Flows
Once the UK leaves the EU, other sectors will be hit harder such as those of motor vehicles and parts, processed foods, and electronic equipment. Motor vehicles appear to be the main affected area, as the UK is not only a large producer of parts and vehicles but also a major sales market.
The EU, on the other hand, is the UK’s main export market – its vehicle exports account for around 58% of its total vehicle export amounts.
Another sector to be largely affected is the UK’s services sector; it makes almost 80% of the entire economy of the UK, London being a global financial center and is Europe’s largest. Most financial and insurance services are exported to the EU from the UK.
It doesn’t have to be the end for the UK after Brexit. Businesses can still survive and flourish even with these threatening changes to their economy. Companies that feel insecure and threatened can go for export consultancy services to gain additional assistance and to be guided on how they should go after Brexit.
Don’t be burdened by Brexit worries. Some things will be more difficult from now on, but a Brexit consultancy company can surely help you out and make things easier. Check out their services and feel the difference.