Connect with us

Hi, what are you looking for?

Investing

Post-Brexit red tape on services ‘could be like imposing tariffs of 26%’

Tarrifs

The mountain of post-Brexit bureaucracy facing Britain’s services sector could be equivalent to imposing a tariff of as much as 26 per cent, a leading investment bank said today.

The additional red tape blocking trade with European Union countries could create “non-tariff barriers” equivalent to imposing levies of between 6 and 26 per cent, UBS said.

The services industry is the engine of the British economy. It accounted for 80 per cent of economic output in 2019 and about the same proportion of jobs.

Boris Johnson’s last-minute Brexit agreement provided for zero-tariff trade with the European Union but did not exempt British companies from customs controls, paperwork and other red tape.

Services companies face new restrictions depending on the type of service they provide and the EU country they are dealing with. Further, the UK and the EU have yet to agree on new “equivalence” rules for Britain’s financial services sector, which is worth £132 billion a year, or 6.5 per cent of GDP.

Anna Titareva, an economist at UBS, said: “The new agreement has avoided a damaging imposition of tariffs. However, the increased administrative burden, to some extent softened by a number of provisions, poses risks to companies’ long-term investment and employment plans.

“Disruption to services trade stemming from non-tariff barriers could be equivalent to a tariff of anywhere between 6 per cent and 26 per cent depending on the sector. The financial services sector in particular . . . is likely to face significant changes, with the European Commission yet to make any decision on equivalence.”

UBS estimated that in time, the hit to the services trade from non-tariff barriers could knock 106 basis points from Britain’s GDP growth. Further, the impact of non-tariff barriers on the goods trade could knock an additional 54 basis point from GDP growth, the investment bank said.

“Among goods producers, we think adjustments in the automotive and food sectors, which account for close to 12 per cent of GDP and 17 per cent of employment, will be of particular importance,” UBS said.

Customs checks, the transition to the new bureaucracy and the drag from the third UK lockdown will push first-quarter GDP down by 1.5 per cent compared with the final quarter of 2020, UBS predicted. GDP is thought to have fallen by 2 per cent quarter-on-quarter in the final quarter of last year.

Read more:
Post-Brexit red tape on services ‘could be like imposing tariffs of 26%’

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

PHILIPPINE shares ended higher on Tuesday on data showing higher remittances from overseas Filipino workers (OFW) in March and continued bargain hunting. The benchmark...

Economy

THE PESO strengthened versus the greenback on Tuesday following strong remittance data. The local unit closed at P52.425 on Tuesday, appreciating by 6.8 centavos...

Economy

By John Victor D. Ordoñez A GROUP of taxpayers has asked the Supreme Court (SC) to stop the proclamation of Ferdinand R. Marcos, Jr.,...

Economy

SYDNEY — Philippine president-elect Ferdinand “Bongbong” R. Marcos, Jr. has made a low-key trip to Australia, the Age newspaper reported, bringing some protesters onto...

Economy

Philippine health authorities on Tuesday confirmed the local transmission of a more contagious Omicron subvariant that has become dominant in the US. “There’s local...

Economy

THE DEPARTMENT of Justice (DoJ) has dropped 29 cases from its list of extralegal killings and torture cases for lack of evidence, according to...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.