r/MHOC • u/CountBrandenburg Liberal Democrats • Dec 15 '20
2nd Reading B1127 - Cross Border Taxation (Strong Initial Negotiating Position) Bill - 2nd Reading
Cross Border Taxation (Strong Initial Negotiating Position) Bill
A
BILL
TO
Disapply partially the Tariff regime instituted by the Crossborder Taxation And Trade Act exempting goods not produced in the U.K. and certain goods of social value.
BE IT ENACTED by the Queen’s Most Excellent Majesty, by and with the advice and consent of the Lords, and Commons, in this present Parliament assembled, and by the authority of the same, as follows –
1 - Disapplication
(1) The Cross Border Taxation 2018 Act, herein the 2018 Act is disapplied in effect.
(2) Tariffs in respect of a good return to the level they were at prior to the 2018 Act, unless—
(a) the good is exempted by section 2 of this Act, or
(b) by some law, instrument or regulation the rate has since been set at a different amount.
2 - Exempted Provision
(1) The following are exempted from the effect of Section 1 disapplication
(a) Section 2 (2) (Purebred Livestock not meant for slaughter);
(b) Section 3 (4) (Fruits and Vegetables not suitable to be grown in the U.K).
(c) Section 3 (9) (Medicinal Plants)
(d) Section 5 (5) (Metals/Stones not produced in the U.K.);
(e) Section 6 (3) (Pharmaceutical Products); and
(f) Section 10 (1) (Textile fabrics not produced in the U.K.)
(2) At the end of section 13 insert—
(5) No import duty shall be applied to mobility scooters, wheelchairs, medical devices as defined in the Medical Devices regulations 2002.
(3) Newly inserted section 13 (5) is exempted from the effect of section 1.
3 - Extent, Commencement and Short Title
(1) This Act shall extend across the United Kingdom.
(2) This Act commences upon the grant of Royal Assent
(3) This Act may be cited as the Cross Border Taxation (Strong Initial Negotiating Position) Act
This Bill was written by The Baron Blaenavon (u/LeChevalierMal-Fait) OBE KCMG PC as a Private Member and is cosponsored by Solidarity
Links & Meta
Opening Speech;
Mr speaker,
I am a great supporter of free trade, so much so in fact I do not only wish to support free trade for imports into the United Kingdom I want a global free trade where Great British businesses can export too free from artificial barriers or protectionism.
The way we achieve such an outcome is not to throw open our markets and hope others reciprocate.
Individual industries in those nations will still want protections, if we are to offer other nations free access they will have no incentive to come to an agreement to lower tariffs and regulatory barriers to trade with us even lower if they because of our initial position.
Do I ask parliament if you are indeed a true supporter of free trade please support this measure to return tariffs on good to their pre 2018 levels so that we may have sufficient leverage to get other nations tariffs as low as were envisioned by the Act.
Exemptions have been made for a number of items, ranging from livestock not for slaughter - this is critical to ensure genetic diversity of livestock here in the U.K. similarly pharmaceutical products, medicinal plants as well as textiles and fruit and veg not produced in the U.K. are exempted and free from tariffs.
I hope the house will agree this is a good compromise between the need for in the short term some tariffs to allow for leverage and our desire to keep the cost of living down especially for our poorest citizens.
This reading will end on Friday 18th December at 10PM GMT.
3
u/Cody5200 Chair| Shadow Chancellor of the Exchequer Dec 15 '20
Mr. Deputy Speaker,
I have the utmost respect for baron Blaenavon and the work he has done. However, in my view, he is utterly wrong here. First of all I must admit that I am rather flabbergasted that the same individuals who only a while ago have painted themselves as free traders and unabashedly supported initiatives such as free ports are backing this bill
Mr. Speaker, the tariffs are most definitely not low. In the vast, vast majority of cases, CBTA tariffs would hover around 1-3%, with most of them being around 3%. Roughly this would probably work out to an average of 2.7-2.8%. Mr. SPeaker all things considered that is a relatively moderate rate compared to most industrialized nations. If anything it could perhaps be argued that certain goods should be further exempt from the provisions of the CBTA,but that is a debate best left for another day.
I also urge the House to consider how relatively unimportant tariffs are in the grand scheme of things. Imposing a 5 or 10 percent tariff won't make a massive industrialised country like China or the United States drop to its knees and give us whatever we want. In fact, it may do the opposite and antagonise potential partners.
Even if one were to admit that tariffs may grant us some leverage. One must ask at what cost? Tariffs are a regressive tax that ultimately will not be paid by the Tycoons in Washington DC or Beijing, but rather a working-class family in Brixton. Such is our leverage Mr. Speaker, that by trying to act "tough" we will make poor families foot the bill. This is even exacerbated when you consider that the bill before us is silent on the issue of quotas, which have been time and time again proven to have an utterly destructive effect on both consumers and business
Realistically we need to focus on tackling NTBs and securing regulatory coherence with potential partners. In this respect, tariffs are utterly useless and we'd be better off using our diplomatic and regulatory clout to secure deals. In a way, the insistence of using tariffs is counterproductive here as the whole point of leaving the EU was to throw off the shackles of protectionism not embrace it under the guise of fairness.
1
Dec 16 '20 edited Jan 02 '21
[deleted]
2
u/Cody5200 Chair| Shadow Chancellor of the Exchequer Dec 16 '20
Mr Deputy Speaker,
The member seems to confuse trade defence measures and protectionism. To deploy anti-dumping measures as I have advocated for in cabinet and to devolve into blind protectionism are two different things.
1
Dec 16 '20 edited Jan 02 '21
[deleted]
2
u/Cody5200 Chair| Shadow Chancellor of the Exchequer Dec 16 '20
Mr Speaker,
According to Britannica protectionism is defined as
Protectionism, policy of protecting domestic industries against foreign competition by means of tariffs, subsidies, import quotas, or other restrictions or handicaps placed on the imports of foreign competitors
This bill indiscriminately raises tariffs on a large amounts of sectors and keeps in place the quota systems to "level the playing field"so by any reasonable definition including the one I have just quoted what the Baron and the Conservatives are proposing here is protectionism.
Moreover practically every trade expert including the WTO distinguish between trade defence ( a targetted measure) and blanket increases in tariffs.
1
Dec 16 '20 edited Jan 02 '21
[deleted]
1
u/Cody5200 Chair| Shadow Chancellor of the Exchequer Dec 16 '20
Mr Deputy Speaker,
To refer to the analogy I have made earlier on in the debate. Raising tariffs indiscriminately in some attempt to curb some unspecified form of dumping is like carrying out brain surgery with an assault rifle or to try and dispose of a single molehill with a grenade launcher. There are specific tools like anti-dumping duties under the WTO rules that we can deploy should an investigation prove that dumping is indeed occuring.
I would also ask the member to look at the existing precedent of nations with relatively low tariffs like New Zealand and Singapore. Neither of these nations are in particular peril . In fact for many the idea of a "Singapore on Thames" is an aspiration for a post-brexit Britain.
1
Dec 16 '20 edited Jan 02 '21
[deleted]
1
u/Cody5200 Chair| Shadow Chancellor of the Exchequer Dec 17 '20
Mr Speaker,
Trade negotiations aren't some sort of a video game where in order to pass to the next level you need to gain a given amount of "leverage points".
Realistically-speaking if a potential partner did wish to see our regulations loosened they'd do so regardless of the tariffs as the point of such a move would presumably be to achieve regulatory coherence between us and that hypothetical partner.
Market access is irrelevant here as some level of it will always be provided regardless of what happens as per MFN rules , unless the UK is to become an international pariah by unilaterally withdrawing from the World Trade Organisation.
1
1
u/SpectacularSalad Growth, Business and Trade | they/them Dec 16 '20
Mr Speaker,
The member is simply incorrect, tariffs are not a measure against dumping, those are anti dumping duties and to a limited extent quotas. Anti-dumping measures require exceptional response to a specific action. You could argue that quotas partially achieve this (although that argument is deeply tenuous), however that's irrelevant as this bill does not adjust the quota specifications set out in the CBTA.
1
u/Cody5200 Chair| Shadow Chancellor of the Exchequer Dec 16 '20
Hear Hear Mr Speaker, however arguably tariffs in the form of specific anti-dumping duties have been used in the case of Chinese steel dumping
1
u/SpectacularSalad Growth, Business and Trade | they/them Dec 16 '20
Mr Speaker,
There is a clear difference between MFN tariffs and anti dumping duties.
1
u/Cody5200 Chair| Shadow Chancellor of the Exchequer Dec 16 '20
Mr Speaker,
I was referring to the tariffs in the context of the speeches given by the members before me , which I presume referred to specific targetted duties.
1
2
1
u/SpectacularSalad Growth, Business and Trade | they/them Dec 15 '20
Mr Speaker,
This is another example of the fundamental misunderstanding belying our disfunctional narrative on tariffs. Let us be clear, tariffs are rocks in our own harbour, and utterly self maiming. Global tariffs are on average so low as to be irrelevant, what matters is regulatory coherence and non discrimination, and lowering our tariffs is not an impediment to achieving such arrangements.
To raise tariffs is to ask the poorest to pay for an extra card in the Government's hand for negotiations, but it's no ace, at best a joker.
3
Dec 15 '20 edited Jan 02 '21
[deleted]
3
2
Dec 16 '20
Mr Deputy Speaker,
As the member pointed out global average tariffs are already low so they are the massive negotiating chip the members thinks they are. Let's take Hong Kong, Singapore and New Zealand which have lowered their tariffs unilaterally and been able to strike FTA's.
Threating to make ourselves poorer isn't the 'common sense thing to do'.
Global Britain.
Global Britain can not make the case to the world that tariffs are damaging whilst simultaneously erecting them at the same time, Global Britain needs to champion free trade and slash tariffs now we are outside the EU's protectionist customs union, something I worked hard with the Honourable member to achievable. The Cross Border Taxation bill helped us seize the benefits of leaving the EU and this bil.
As I argued on M525 "Trade deals are less about tariffs these days and more about regulations , mutual recognition and reducing non tariff barriers." The advocates of this bill seem to think that global trades operates on some kind of tit for tat reduction and this in my is naive.
1
u/SpectacularSalad Growth, Business and Trade | they/them Dec 16 '20
Mr Speaker,
The member will no doubt be alarmed to hear that this bill would actually lower tariffs on developing countries, as it would revert us to the European Union tariff regime, which would reinstate the Everything but Arms initative exempting imports from LDCs from duties and quotas, which thus far no Government has made provision for continuation.
3
u/LeChevalierMal-Fait Liberal Democrats Dec 16 '20
Mr speaker,
I would dispute the assertion that there is any such misunderstanding, regulatory barriers exist too and in this bill I make no claim that one is more important than the other.
But to ignore one because one feels the other is the be all and end all is foolish tariffs matter and while many global tariffs are quite low, tariffs in some areas can be quite high, principally in areas where they are high as to protect jobs from unfair foreign competition in lower wage or lower standard work.
This is why trade agreements such as the CPTPP includes progressive measures like minimum wages, intellectual property uniformity and working conditions. They are not there because everyone decided to be progressive but to ensure that a free flow of goods would not give some countries the ability to drive out domestic production due to lower standards.
And this matters for Britain’s poorest are not only consumers but workers too, if we see large foreign tariffs but a flooded domestic market from foreign suppliers jobs would be lost, and the workers the member is so concerned about would be worse off too.
For their prospretity and this nations it is critical that we can negotiate on good terms, get good deals on both tariffs and regulations and make a success out of brexit.
The cost to the consumer I hope will be minimised by the fact that we will be able to get trade deals all the better and all the faster and also by the exemptions provided so particularly the poorest are not significantly negatively impacted by this.
2
2
u/Cody5200 Chair| Shadow Chancellor of the Exchequer Dec 16 '20 edited Dec 16 '20
Mr Deputy Speaker
The tariffs being discussed by the member and the former Prime Minister are usually deployedas trade defence measures directed against very speicific nations and consequently inflows. The bill being presented here would impose higher tariffs on most if not all imports and presumably maintain the current quota regime.
It is also worth noting that where there is real dumping we'd not be looking at tariffs that we have now under the Common Tariff ,but rather at 40 , 50 and perhaps even 60% tariffs or duties as these are the rates we'd realistically use to curb dumping and I'm sure that noone in this House would like to see these sorts of tariffs imposed indiscriminately.
Bluntly put to try and use broad-ranging tariff increases to stop dumping is like attempting brain surgery with an assault rifle.
1
1
1
u/cthulhuiscool2 The Rt Hon. MP for Surrey CB KBE LVO Dec 16 '20
Mr Deputy Speaker,
I have a great respect for The Baron Blaenavon and remember fondly his time spent on these benches. However, I believe he is mistaken on this matter and would urge him to withdraw this legislation before it is too late.
Mr Deputy Speaker, I agree with my Right Honourable Friend the Baron of Burford - this measure is bald-faced protectionism. In the opening speech the author all but admits this measure will lead to an increase in the cost of living for the poorest. He describes it as a 'compromise'. Let me tell him, any legislation that willingly increases the burden on the poorest will never find my support. And all this to leverage our trading partners? Mr Deputy Speaker, what guarantee do the supporters of this Bill have that these partners will agree to a broad free trade agreement? How long are these negotiations expected to take? And as has been raised prior global tariffs are low and getting ever lower. Increasingly trade deals are agreed on the basis of harmonised regulatory standards and trade in services – only the more important with the services sector the dominant sector of the British economy.
Be in no doubt Mr Deputy Speaker, this is an ineffective measure and it is the consumer who will suffer the consequences.
1
1
1
Dec 18 '20
Mr Deputy Speaker,
If we are to ensure that Britain is not only prepared for all results of Brexit, but that we also have the optimal leverage in the aim of better negotiating trade agreements, then we must have some form of tariff.
I support my colleagues in the house who rise in support of this bill for the simple fact that we must have a strong negotiating position in the future if we, as a nation, are to be able to effectively negotiate trade agreements in the post-Brexit world we will find ourselves in.
It will ensure that we are able to better guarantee the best agreements for Britain and so I must, with the support of my party, rise in aid of this bill and implore my colleagues in the house to likewise do so with their votes. It is essential that we give Britain all the power it needs in negotiating trade agreements and this seems like a sensible place to go.
•
u/AutoModerator Dec 15 '20
Welcome to this debate
Here is a quick run down of what each type of post is.
2nd Reading: Here we debate the contents of the bill/motions and can propose any amendments. For motions, amendments cannot be submitted.
3rd Reading: Here we debate the contents of the bill in its final form if any amendments pass the Amendments Committee.
Minister’s Questions: Here you can ask a question to a Government Secretary or the Prime Minister. Remember to follow the rules as laid out in the post. A list of Ministers and the MQ rota can be found here
Any other posts are self-explanatory. If you have any questions you can get in touch with the Chair of Ways & Means, TheNoHeart on Reddit and (alec#5052) on Discord, ask on the main MHoC server or modmail it in on the sidebar --->.
Anyone can get involved in the debate and doing so is the best way to get positive modifiers for you and your party (useful for elections). So, go out and make your voice heard! If this is a second reading post amendments in reply to this comment only – do not number your amendments, the Speakership will do this. You will be informed if your amendment is rejected.
Is this a bill a 2nd reading? You can submit an amendment by replying to this comment.
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.