EU EU or EFTA - the options

[rolygate]

There is a lot of discussion in the UK about leaving the EU. It doesn't look likely in the near future since both Cameron and Miliband support UK membership of the EU. Cameron is a big fan even though he tries to look open-minded about it; he will do everything possible to stay in. UKIP probably have many years to go before they will be able to exert enough pressure to make a difference.

However, leaving completely in order to avoid the murderous corruption that kills so many UK citizens may not be the only option - four European countries are EFTA members, meaning (as far as I can work out) they are trade members but not political members. See for example:

https://en.wikipedia.org/wiki/European_Free_Trade_Association

Does anyone know what the implications are for trade, if the UK left the EU but joined EFTA (assuming this is possible)? Is EFTA a direct entry to free inter-EU trade, as exists at present for the UK, or are there restrictions?

 

[Hattivatti]

Only import and customs taxes will apply. Currently Norway, Switzerland, Iceland and Liechtenstein are members of EFTA but not EU.

EDIT: Actually importing from EU country to non-EU EFTA country the seller does not pay VAT (=tax free sales) but the EFTA country will collect it's own VAT and possible customs taxes as well. Usually customs taxes have ~150€ threshold

 

[rolygate]

I am especially interested in the precise details of import tax, in practice.

The reason is simple: why cannot the UK leave the EU and join EFTA, maintaining trade arrangements as they are now?

Political membership of the EU is a disaster, since it is a device specifically tailored to remove democracy and allow a new form of government to prevail without opposition: a form of left-wing totalitarianism that eliminates opposition, by virtue of political structures that are immune to interference by democratic action, and maximises revenues by control of trade and regulation. I call it neo-communism; but neo-Stalinism may be better, as any group can be marginalised then exploited and killed for profit (e.g. smokers). It's a new form of federalism that combines the 'best' features of communism and capitalism: maximum control and maximum revenue for the state. It kills around 10,000 UK citizens a year by blocking smokers' access to Snus, for profit. It is set to do the same with ecigs.

The EU is a corrupt and incompetent nightmare, but has trade benefits. That's all it has. Maybe there is an alternative.

 

[Hattivatti]

I am not commenting about political issues but the taxing works as the following when importing from EFTA to EU of EU to EFTA.

When buying goods, lets say of value 100€ with posting fee 3€, from EU the EU to EU price is 103€ (local 24% VAT). But when buying from EU to EFTA the retail price is 86€. When the goods arrives to EFTA country, local custom will check the parcel price and adds local VAT % (let's say 20%) on top of the goods price including shipping fees (assume 5€). The combined value hits the customs tax threshold import tax will be added on to of that. Usually it is ~1,5-2%. The final price will be then 111,02 (91*1,20*1,02). Customer pays 91€ to seller and 20,02€ to the state.

Free movement of goods is the same between EFTA and EU as inside EU.