Wednesday, 19 October 2016

Brexit and the chocolate war

I've avoided adding to the sheer volume of stuff that's been written about Brexit. However, in this case I'm willing to make an exception. The New Zealand Herald recently ran a story about the reopening of the 'chocolate war':
A 30-year battle between Britain and the European Union over chocolate, which was settled by a court ruling only in 2003, could reopen when the UK quits the bloc, former Deputy Prime Minister Nick Clegg warned Monday.
British chocolate manufacturers fought for the right to sell chocolate containing vegetable fat, which their continental competitors said was not as pure as the products they were marketing and should be branded "vegelate" or "chocolate substitute."
In 2000 a compromise was reached to call it "family chocolate" and the European Court ordered Italy and Spain, the most vociferous opponents, to allow its sale three years later.
"The chocolate purists, I guarantee, will quite quickly start fiddling with the definition of chocolate to make it much more difficult for British exporters to export elsewhere in Europe," Clegg said after a speech in central London...
Arguments over "common definition" will sit alongside tariff barriers and customs controls as obstacles to British food and drink manufacturers if Britain leaves the EU single market, Clegg said as he introduced a report on the UK's 27 billion pound (NZ$46 billion) food and drink sector.
It seems somewhat obvious that Brexit will lead to an increase in trade barriers between Britain and the European Union. However, most people are concentrating on the implications in terms of tariffs (essentially, taxes on imports or exports that make traded goods more expensive).

Fewer people are considering the rise of non-tariff trade barriers. Non-tariff trade barriers exist where the government privileges local firms (or consumers) over the international market, but does so without direct intervention (such as tariffs or quotas). Because they don't involve an explicit tariff or quota, these trade barriers are somewhat hidden from view. However, having rules that prevent UK chocolate from being sold or marketed as chocolate in the European Union would certainly fit the definition, given that it would make it difficult (if not impossible) for British chocolate manufacturers to export to Europe (at least, not without renaming their products 'vegelate' - yuck!).

Other than the rekindling of the 'chocolate war', I wonder how many other non-tariff trade barriers will arise after Brexit is triggered?

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