EEC and EFTA : Tariffs on Manufactures and Our Trade Balance

Extract

Britain's protective tariff on manufactured goods is, on balance, rather higher than the average level of tariffs imposed against non-members by our partners in EFTA, and than the average level of tariffs against non-members in the EEC countries. In this note, estimates are made of the direct effects on our exports and imports of manufactures of the tariff changes resulting from continued membership of EFTA and exclusion from EEC. The estimates, which relate wholly to the assumed effects of tariff changes on relative prices, are based on the trade flows in 1960 and on the general tariff position in that year. The calculation shows the effect on the 1960 volume of our trade in manufactures of all the tariff changes planned for the period up to 1970. Admittedly, these may not be the major factors determining the future development of trade patterns. In particular, the calculation excludes the further effects which would arise from differences in the rates of economic growth in EEC and EFTA during the rest of the decade, as well as from changes in our competitiveness apart from tariffs.