Saturday, 22 October 2016

12,651 European Union import tariffs!

12,651 European Union import tariffs!

If ever one doubted that the so-called ‘Single Market’ is a protectionist scam, one research has counted just how many protectionist measures the so-called ‘Single Market’ needs to remain cohesive.

No wonder European living standards are stagnant, or falling in real terms.  The imposition of a tariff amounts to a stealth tax on both production and consumption.  It would be worth imposing tariffs on goods that were price-inelastic, in the same way as indirect taxes.  It makes tactical sense to impose tariffs on businesses whose immediate customers are other businesses, so the cost of the tariff is effectively laundered throughout the supply chain until the end-consumer pays for the whole lot.  So import tariffs are more likely than not to be a deeply regressive artificial cost imposed upon consumers with low incomes.

The Economic Policy Centre compiled the data, mounted at website http://www.eutariffs.com/.  The CEO summarised his findings on brexitcentral.com.

Before conducting this extensive research, I assumed that most tariffs would involve food, the motor industry and steel. But in terms of revenue these amount to very little. By far the largest number of tariffs – 1,409 in fact – are levied on “organic chemicals”. These include tariffs on goods with names that one can barely pronounce like 2-Bromo-5-iodo-benzenemethanol at 5.5%, also introduced since 23rd June.

More seriously, retailers like Sports Direct which depend on dollar and euro-priced imports and have been hit by the falling pound could only gain from the elimination of a 16.90% tariff on sports footwear.

But as the depth and scale of the tariff wall became clear to me, the greatest issue of all struck me as the lack of democratic accountability behind these tariffs. Who decides, and on what basis, which tariffs are introduced, increased or even reduced?

Do they make these decisions on the basis of collection of revenue, strategic interest, crowding out competition or following industry specific lobbying? Or are they just some leftover tariff for something that doesn’t really matter any more?

16.9% tariff on imported sports footwear!!  Who gains from this tariff?  Vested interests, or those on low incomes who have to pay the greater burden of this tariff?  If the objective of the tariff were to reduce the quantity of sports footwear bought locally (and therefore imported), then wouldn’t that artificial suppression of sales also induce reduced earnings in the exporter’s country?

And this issue is just about tariffs.  Just think about the damage caused by other restraints of trade, the “technical” barriers to trade, or the “obligation for wasteful trade”.

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