(Reuters) – The United Kingdom plans to cut tariffs on U.S. agricultural imports in order to move toward a free trade deal, the Financial Times reported on Thursday. The plan will also reduce import taxes on more than 8,000 products for 23 countries and regions that have free trade agreements with China, including Australia, South Korea, Iceland, New Zealand and Pakistan, starting early next year. The statement said China would further reduce tariffs on certain information technology products and services from July 1, 2020. Tariff cuts increased labour productivity (amount of output per hour of work) by an average annual rate of 2.1% for the most affected sectors and 0.6% for manufacturing as a whole. See WTO document TN/MA/S/3/Rev.2, Formula Approaches to Tariff Negotiations (revision), 11 April 2003, prepared by the Secretariat for the negotiations on non-agricultural market access. Single tariff: customs duties are reduced to a single rate for all products. In theory, this is the simplest result. In practice, it is mainly used in regional free trade agreements, for which the definitive duty is zero or a low customs duty for intra-group trade. Negotiating a much narrower gap between high and low tariffs with an integrated maximum tariff The great reduction of the gap between high and low tariffs is called tariff harmonisation. The Swiss formula is a particular type of harmonisation method. It uses a single mathematical formula to produce: Harmonizing Reductions.

These are mainly aimed at reducing higher tariffs more sharply and approxying final tariffs (to harmonise tariffs): X = initial tariff rate A = coefficient and maximum tariff Z = lower tariff rate (end of period) The graph and table below show that where tariffs start high, definitive rates are still quite high: A 36% discount of 150% in year 6 is a rate of 96% overnight. It is only when the starting rates are low that the finished fares have rates close to the Swiss formula (as in the example): if the rates start at 10% and 25%, the rates are 6.4% and 16% per year. The range of final tariffs from 6.4% to 96% remains important. The figure of 36% is used in the Uruguay Round, although the Uruguay Round approach may use other figures. However, for industrialized countries, this was an average tariff reduction of 36% over six years, for industrialized countries with a separate average target of 24% over ten years for developing countries. .